LEADER                                   SEPTEMBER 2005

The BBC’s Chris Kane
Charting a New Course
for Real Estate
     Toward an Integrated Technology Solution for Real Estate

     The HP Journey Continues
Real Estate Management

sponsors and the project team, we developed a project plan    Results to Date
that achieved a bal...
Real Estate Management

     architecture that is flexible and agile. It really helped     additional opportunities to con...
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CoreNet Global CRE Leader Article


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A CoreNet Global CRE Leader article by Bob Sawhill, which features HP\'s 2005 RE information systems consolidation and integration "Toward an Integrated Technology Solution for Real Estate, The HP Journey Continues". An article based on 2005 CoreNet Global Summit presentation in Toronto.

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CoreNet Global CRE Leader Article

  1. 1. LEADER SEPTEMBER 2005 The BBC’s Chris Kane Charting a New Course for Real Estate Alternative Workplaces at BellSouth Lowering Costs, Increasing Efficiencies HP’s Integrated Management System Decision Support for Real Estate Outsourcing at Microsoft Partner Performance Management
  2. 2. LEADER Toward an Integrated Technology Solution for Real Estate The HP Journey Continues Real Estate Management By Bob Sawhill A bout two years ago, Hewlett-Packard (HP) would pick the best practice from either HP or Compaq began a journey toward creating an integrated and go with it. We had to balance doing what was right management system for our corporate real from a strategic and tactical level with executing quickly. estate portfolio. Today we are still on that journey, but we have accomplished a great deal since our first steps. Not only were we trying to deliver on economies of scale Our key accomplishments include significant cost savings in the merger, we were also trying to be our own best and effective information management as a result of customer of our own services. So rather than having our consolidating global systems, implementing an integrated real estate organization worry about all the headaches of system architecture, and capitalizing on HP’s own products managing the IT infrastructure for real estate and having and services. In addition, we now have the potential to the skill sets and abilities to do it, we outsourced servers, leverage the system in other workplace services processes. data center and database administration and support to our own HP Managed Services group. This allowed our It all began with the HP-Compaq merger. The merger real estate staff to focus on running the portfolio. imperatives were to deliver on economies of scale across the corporation, obviously in our products and services Overcoming Challenges and additionally in the technology tools that we use internally. Creating an integrated technology system to manage the consolidated portfolio was a large undertaking, to say At that time, we had decentralized systems, disparate data the least (see Figure 1). Good project management and and a lack of a complete, consistent and integrated system communications were essential. By working with executive for corporate real estate. As a result, the quality of the output wasn’t as good as we would have liked, and the cost to operate the systems was much higher than it needed to be. These were some of the underlying pain points we were trying to resolve. However, we knew that we could not get into a full reinvention effort. It would take too much time. Speedy and efficient execution was key. Thus we followed the same guiding principles that applied to all of the merger integration, such as “Adopt and Go” and “Perfect Enough.” This meant that we Figure 1 30 LEADER September 2005
  3. 3. Real Estate Management sponsors and the project team, we developed a project plan Results to Date that achieved a balance between priorities, resources, and time to execute. In addition, our solution needed to be Our real estate portfolio information aided the decision- truly global, covering our entire portfolio of more than 50 making process around consolidating our real estate million sq. ft. (4.6 million sq. m.) worldwide. Therefore, portfolio following the merger. We reduced our portfolio good communications and management of change by 17 million sq. ft. (1.6 million sq. m.) globally, which principles were important to our roll-out success. equated to approximately $200 million a year in annual savings. As we continue to seek further efficiencies, we Another challenge we ran into as we got into the project may find that we are beyond the obvious low hanging fruit. was that the software application we had standardized for Thus, we will need to rely more on this information to lead space management, or Computer Automated Facilities us to further optimization opportunities (see Figure 2). Management (CAFM), did not perform well in a global environment over a Wide Area Network. As with many other similar CAFM applications, it just really was not designed to work in that environment. We needed to have a centralized system and infrastructure, but we had a dispersed user organization across the world. If we had been forced to go with a very decentralized system to gain adequate performance, it would have been difficult to manage, costly to implement, and inefficient to support. Figure 2 Fortunately, our own HP Consolidated Client One of the key innovations that contributed to the success Infrastructure group provided a solution that shifted of the project is that we truly consolidated our entire the PC computing and network traffic to HP Blade system: the software, the hardware and the support itself. PCs within the data center. This enabled us to have both We moved technology and process management to global the economical centralized system and the application programs rather than individual site programs or business performance we needed. divisions. This had significant results as far as reducing Another challenge we ran into was data standardization, our overall infrastructure and applications, and therefore, a typical industry problem. It took a lot of work to considerable cost reductions. standardize our process and then to integrate all the systems we had within the two corporations. We were also In fact, with this project and other projects in the Real working with external service providers that were doing Estate and Workplace Services organization, we reduced lease management for us, and they would track information our applications and our cost by 70 percent. Because we differently. So getting all these databases linked up and shut down the servers and their support, we no longer had consolidated was a key challenge to overcome. It does maintenance contracts or require staff to add to support not need to be that difficult. As an industry, it serves all the applications. of us to get behind data standardization and the Open Standards Consortium for Real Estate (OSCRE), which The other aspect that was innovative and led to success was spawned out of CoreNet Global. was the fact that we put into play an integrated solution September 2005 LEADER 31
  4. 4. Real Estate Management architecture that is flexible and agile. It really helped additional opportunities to consolidate infrastructure, enable the integration between applications, and we programs, and information systems. We’ll be working now have a good foundation to further leverage for with finance, procurement, and human resources IT other functions beyond real estate. groups who have similar Business Intelligence systems to determine IT consolidation opportunities across corporate As well, our system is agile and adaptable beyond our infrastructure silos. internal applications. For instance, we pull data from our outsourced lease management provider into our system Finally, there is always continuous improvement in instead of maintaining a duplicate system internally. terms of how the systems are managed. We will further It’s more important to utilize the information than to institutionalize programs and mature processes and do the day-to-day management of the data. For lease technologies to assure data quality, simplify use, and management, we no longer have any internal systems. broaden usability to all audiences. We will also strive to enable operational excellence with effective information. In our space management applications, we went LEADER from over six worldwide applications to one standard application. The databases and servers went from About the Author dozens of servers across the world down to three. The integration points went from these many dozens of Bob Sawhill, CFM, is Program Manager with HP’s Real servers down to a few. There was a lot of manual data Estate and Workplace Services’ Information Technology entry that was done previously because we did not have Department. A key part of Bob’s role is to bring business integration in some places, and we’ve eliminated all that. process and information technology — which often speak At the same time, our user base is growing. Now that it different languages — together. is a global tool, real estate and other staff can adopt it very easily. We’re seeing a big usage increase in Europe, Latin America and the Asia-Pacific region. Next Steps We have put a good foundation in place that we can further leverage and use in other workplace services functions. For example, I am now beginning a project in facilities operations for our data centers. Our mission critical data centers require good information around how we’re tracking on performance indicators, reliability, building systems maintenance service levels, capacity analysis (space/cooling/electrical), and so forth. Our facilities operations group and our information technology group partner in managing the data centers that we operate for HP’s customers and our internal business systems. They have some good processes in place now, but they are highly manual in data collecting and reporting. So, we are looking at leveraging the new real estate portfolio system architecture and our central information reporting system to further automate data and information, and provide dashboard metrics and data center management. To further the IT consolidation effort, we will be investigating other internal corporate systems for 32 LEADER September 2005