History of Outsourcing What are the Keys to Success Current Trends & Models How does fit in with your future???
CoreNet Leader (Sept 2012) --- CRE role in 2020 Move from a Subj. Matter Expert to Strategic Partner with BROAD KNOWLEDGE of Biz Strategies that adds value to the enterprise
Executive Summary – 5 key steps to achieving this.. 1. Reducing Costs / Driving Productivity thru Workspace 2. Align workplace design with Company strategy 3. Partner w/ key support functions (HR/IT/Sourcing) 4. Two of four key steps involves OUTSOURCING Outsourcing/Service delivery models/playbooks engrained in CRE Essential to internal resources being refocused on strategic roles for company
CRE PRESSURES Improve service delivery Standardize Processes Add Services Cut Cycle Time Add Value Better reporting Tighter Controls Increase Customer SAT Ensure Flexibility Reduce Costs/Headcount Better technology/metrics
History of Outsourcing over Past 30 years Self Performance (1980 – 1989) Out Tasking (1990 – 1995) Outsource (manage out task vendors) (1995 – 2000) Integrate (2001 – 2006) Service Providers work across silos w/ biz units & shared services Biz Process Outsourcing (2006 – 2010) – new cross functional solution 3rd Generation – All services directly managed by Service Prov. – CRE strategic
Models – A Range of Options Spectrum - shows a range of needs and contractual exclusivity/advantages No one best model – each fits different needs and circumstance Range is from more basic needs to more complex requirements
Clients Want: Streamline mgmt of vendors Benchmark !!! Results – documented/validated Risk – identify potential/create mitigation plans Global & integrated Thought leadership
REASONS OUTSOURCING CAN FAIL: Unclear Expectations Interests of Parties Misaligned over Time Poor Governance Poor Communications between both Parties Not as much: Poor performance Not beneficial
New Models/Trends Vested Outsourcing (win-win approach) Low cost not always best solution Who’s the Expert?? Turf Wars – Dealt with Upfront Consistency – Keep Perf Mgmt/Transition teams thru contract Incentive outcome-based pricing at start Keep SLA’s to a minimum – 5 to 10 Metrics – adjustments for improvement or they go. Collaboration Model – Cisco –best tech/process used by all Integrator Model – Management by one Service Provider (Microsoft)
****************************** Addresses - WHY CHANGE NOW ****************************** Microsoft Real Estate and Facilities has been in a thoughtful evolution of our business since becoming a global organization five years ago. Focusing on our regional and local operating group partnerships, we clarified and streamlined interactions with MSIT, Security and CPG. We implemented the Microsoft International (MSI) finance partnership model to bring consistency to processes and engagements with finance and business partners. Since the stabilization of the economy, we have been able to turn our attention and bandwidth to plan and execute the next step in our continued evolution as a global RE&F organization. We’ve implemented first Client End User and Business Client Satisfaction Survey, Improved our Global Business Model (which I will speak to further) by Strengthened the Global Center of Excellence governance Platform and Implementing the “B3” Supplier Delivery model And we are in the process of further enabling the a global business through defining Global Metrics and Benchmarking and implementing an Enterprise Technology Platform. Through out goals have been to maintain regional accountability and increase our capabilities to do things faster and more consistently with global predictability. This latest phase in our organizational development will bring us closer to the globally aligned business our teams, partners and clients have asked for.
And ultimately providing trusted leadership- being relied upon by our partners and clients for business & subject matter insight and leadership to deliver successful outcomes for the company
******************************* Slide has animation ******************************* Animation 1: B3 is a global initiative to evolve our vendor model. The New Global Delivery Supplier model is a part of an our RE&F ecosystem to deliver on client satisfaction The goal is an RE&F function that is more effective in service delivery and strategic in supporting our client’s business goals and provides greater value both globally and locally to the company and clients. It is a direct outcome of feedback from our RE&F clients and employees to provide more consistent and improved delivery, deliver improved communications, and spend more time on strategy and planning. Animation 2: (COE) Our new vendor model is supported by Centers of Excellence Global Platform providing governance, guidelines, standards and subject-matter experts covering the spectrum of RE functional services, workplace strategies and procurement practices. Animation 3: (Delivery) The new model will implement a global program management vendor which will be responsible for coordination and integration of underlying service providers. This Integrator Model provides the advantages of a single platform for RE&F to manage globally consistent processes and outcomes, while bringing best in class delivery to our clients on a local basis. Animation 4: (Regional and Local Teams) Our regional and local RE&F professional will remain the primary point of contact for the business…providing greater focus on CRM…..<Walk through the points and highlight or call out additional areas that my resonate with the specific client> Ultimately, the result will be a more strategic alignment of the portfolio with the needs of the business and improved delivery performance and costs.
Corporate Real Estate Trends and Keys to Successful Outsourcing
Founder/President - Corporate Planning Consultants, Inc.
Dick brings 30+ years experience & thought leadership to CRE clients in
the areas of: strategy development, operational assessments, sourcing,
RFP development, process improvement and organizational redesign.
CPC founded in 1984 has serviced more than 60 international
corporations including: Google, Oracle, JDSU, Microsoft, PG&E, URS,
Charles Schwab and Juniper Networks.
CORPORATE EXPERIENCE: Formerly VP/Director of CRE with Levi
Strauss & Co., Informix Software, Sybase & COLO.COM.
Co-founded a full-service, turn-key international real estate services
company, AsiaPac International, in 2001.
EDUCATION: BA and MEd from U Mass at Amherst and Ed D work at
University of San Francisco.
Dick is an active member of Nor Cal IDRC/CoreNet since 1990.
Served as leader of Programs Committee - 2011 to 2012.
Program Take Aways for Professional Growth
Leave Today Understanding:
Evolution of Outsourcing
Keys to a Successful Relationship
What Role will it Play in your Career in
the Future? ? ?
The Future of Corporate Real Estate in 2020
“By 2020, the corporate real estate (CRE) leader
will evolve from a subject matter specialist to a
strategic partner with a broad knowledge of
business strategies. He or she will display a
mastery of the core functions of the CRE role while
demonstrating an ability to add value to the
enterprise by identifying potential synergies and
efficiencies across the organization.
Excerpt from “The Leader” magazine – CoreNet Global publication, September 2012.
(Recognized as the leading source of research and thought leadership by CRE
Core Components of Corporate Real Estate in
1. Optimizing costs while driving employee productivity - design collaborative,
flexible workspaces that are adapted to the specific needs of the work force and
reinforce the organization’s culture and values.
2. Measure impact of enhancements on workplace productivity
initiatives with overall corporate strategies.
3. Outsourcing and Service delivery models engrained in CRE repertoire - to
leverage increasingly strategic and collaborative relationships with supply-side
service providers to champion initiatives.
4. External service provider alignment and integration becomes more
important and necessary - internal resources are increasingly refocused on
5. Partnering with key support functions (IT/HR/Sourcing) is central - for adoption
of emerging technologies and for work enablement.
CRE Organizational Pressures of Today
C R E
Industry Trends: Emergence of Outsourcing
All day-to-day operations directly
2009 - present
managed by one Service Provider
and RE & Facilities role is strategic .
New cross functional solutions provided by
1990 - 1995
major players aligned with real estate
Within Service Providers across silo functions,
with business units, with shared services
Emergence of firms that manage out tasked
vendors or provide related services within a
Individual services like cleaning, security
One-off transactions or design work
Facility operations, cleaning, security,
food services, mail, project management,
brokerage done in-house
Outsourcing Models – A Range of Options
Collaborative Alliance – Multiple Providers ensure business continuity/mitigated
risk; all use consistent processes, tools, performance measures & technology.
Strategic Alliance - Provider & Client change business paradigm to create a mutual
and competitive advantage, sharing risks and rewards.
Outsourced Partner - Performs all services for a function to the exclusions
of other providers with shared goals & Rewards.
Exclusive Provider - Performs one or more repetitive
functions under favorable terms on exclusive basis.
Preferred Provider - Provides repetitive service(s)
with favorable terms. May be one of many providers.
Service Provider - Provides discrete
contract-based service when and as needed.
Industry Trends: What Companies Want
Streamline management of vendors: less = more
Benchmark data – thirst for more info/knowledge
Results – clearly documented, validated
Identify and develop potential risks/mitigation plans
Broad geographic and/or functional integration capabilities (fully
Strategic Value - Thought Leadership to CRE
Latest Trends in Outsourcing
New Models for Success
Vested Outsourcing – (“win-win” approach for both parties)
Low cost not always best
Who’s the Expert Here?
Transaction vs. Managed Services Contract
In-house turf wars need to be dealt with upfront
Consistency – keep Performance Mgmt. and Transition teams throughout contract
Proper incentive-outcome-based pricing model at start
SLA’s - Measurement minutiae – reduce to 5-10 key performance indicators
Metrics are meant for adjustments/improvements or get rid of them
Cisco’s Global Delivery Collaboration Model
Have best Playbooks/Technology used by all Service Providers
The “Integrator Model” – at Microsoft
One Service Provider manages all Tier One Providers for a Fee
RE&F – Role becomes Strategic/Planner/CRM to Internal Customers
Presenting Our Distinguished Panelists
Mr. Chris Henderson, Sr. Director
Global Delivery – Cisco Systems
Mr. Brian Collins, Director
Global Workplace Strategies – Microsoft
Mr. Matt Werner , Sr. Managing Director
Global Corporate Services – C B Richard Ellis
CHRIS HENDERSON – Senior Director
WPR Global Delivery – Cisco Systems Corporate Real Estate
Chris joined Cisco in 1996 and his responsibilities included:
Research Triangle Park, NC – Program Management
San Jose, Cal - Theater Director of Services
London, UK – Director - European / Emerging Markets
San Jose, Cal. – Advance Strategies
San Jose, Cal. – Global Delivery - Leading Facilities Management, Real Estate
Transactions and Capital Projects for Global Portfolio of 22M sq. ft.
International Experience – Team Transformation; Multi Cultural Teams
Chris was born in Nuremberg, Germany and has traveled to 35 countries.
Hobbies include: Cycling (century rides); Winemaking.
BRIAN COLLINS - Director of Global Workplace Strategies –
Brian’s primary role is to define, communicate and implement
next generation of the Global Workplace Services Model in
Microsoft. Brian manages a set of services and resources to
support the global RE&F organization in managing its
workplace strategy and assets.
He is responsible for Microsoft’s ‘Workplace Advantage’
program; defining and driving Global Workplace programs,
including Research, Guidelines, Knowledge Management,
Project Consulting, Lab Strategies and Operations.
Brian has 18 years experience at Microsoft as FM Director for
Ireland, EMEA and Portfolio Manager for Central & Eastern
Brian graduated from the Dublin Institute of Technology.
MATT WERNER , Sr. Managing Director
Global Corporate Services – CB Richard Ellis
» Matt Werner brings 18 years of experience in transforming
organizations, optimizing real estate portfolios, and reducing
occupancy operating costs.
» Since 2000, Matt Werner has been responsible for CBRE Global
Corporate Services (“GCS”) business development in the
Western United States.
» He has worked to develop long-term, integrated service solutions
for several organizations, including Cisco, Microsoft, HewlettPackard, Chevron, Union Bank, and McKesson.
» Matt is a member of CORENET, and he resides in Berkeley, CA.
In 2012, he was awarded by CBRE the Trammell Crow
Master Builder Award and the LMA Partnership Award.
Change how we manage our business
• Enhance relevance to individual businesses while maintaining Cisco
• Develop and build organizational competencies
• Improve productivity and employee engagement
• Create an agile & globally scalable organization
• Define role clarity and efficient alignment of resources to business
needs and performance measures
• Assign ownership and accountability for process performance
Cisco Global Resource Optimization
•• Reduce variability and
Reduce variability and
•• Maintain or improve
Maintain or improve
quality of delivery
quality of delivery
•• Consolidate and
•• Maximize portfolio
•• Shift “context” tasks to
Shift “context” tasks to
•• Resolve project delivery
Resolve project delivery
•• Consolidate partners/
•• Reduce partner spend to
Reduce partner spend to
achieve cost savings
achieve cost savings
•• Procure the A-Team
Procure the A-Team
•• Seamless global
•• Maximize sourcing process
Maximize sourcing process
•Inconsistent workflow processes
• E2E process mapping and
• Inconsistent job descriptions
• Increase span of control
• Significant job and role overlaps
• Define key inter-relationships
among job roles
• Bloated organization size
• Limited performance measures
• Lack of effective governance
•Gaps between organizational
needs and workforce capabilities
• Right-size org based on strategy
• Create process owners and
• Aligned roles – removed the
• Gain global consistency and
GLOBAL ORGANIZATION 2007
Centers of Excellence (COE) Workplace Strategies
Global RE&F Centers of Excellence
Guidelines, standards and Functional Subject
Matter Experts (SMEs). Provides consultation
and development global best practices for
local adaptation and vendor governance.
•Global Resources Team
• FM, D&D, RE, ES & Technology
• SRM & Global Programs
•Global Workplace Strategies
• Workplace Research
• Design Guidelines
• Change Management
•Global Procurement Group
• Regional and Global Sourcing
Global Supplier Integrator
• Provide global accountability
of Service Delivery
• Industry leading processes, tools and
standard metrics reporting and KPIs
Regional and Local RE&F Professionals
• Client Point of contact
• CRM and business strategy
• Partner (MSIT, HR, FIN, CPG)
• Understand Business Needs
• Accountability for local
plans, solutions and services
• Inform, adopt, and adapt
global COE platforms to
• Innovate new best practices
• By Geography and Function
• Project Management, Brokerage,
Integrated Facilities Management
Partnering with HR, IT, Fin, LCA, GPG
Strategic Supplier Management
RE, PM, IFM, AWS - Platform Ownership in COE
Insight & Strategic Planning
Tier 1 Contract Management
RE, PM, TM Service Oversight
Infrastructure Management, Benchmarking
Design and Construction
Other user services