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With the recent economic downturn, many companies are increasing their focus on cost improvement to increase shareholder returns. Corporate real estate can play a major role in cost management initiatives as it is typically the 2nd or 3rd largest operating cost in many organizations. Strategic real estate cost optimization opportunities can be identified and achieved quickly through a combination of:
• Spend analysis
• Portfolio optimization
• Organizational structure redesign
• Process improvement
Most organizations have explored the “low hanging fruit”, or those activities that require minimal effort and provide low impact and benefit. However real estate and facilities operations can partner more closely with internal customers and other enabling functions to tackle more challenging initiatives, resulting in more significant cost savings opportunities.
This issue of Deloitte\'s Capital and Real Estate Transformation (CRET) Quarterly provides insight into the real estate considerations that should be an integral part of any Enterprise Cost Management program. We discuss an approach to real estate and facilities cost optimization activities, identify some common real estate cost reduction initiatives and outline some symptoms that may indicate an organization should explore a more comprehensive real estate cost management program.