Is your real estate sourcing approach strategic?

A strategic sourcing approach can accelerate enterprise growth. Deeply knowledgeable on IT issues, procurement leaders offer a sophisticated understanding of how to make IT purchases impactful to the corporate bottom and top lines. The next hill to climb in delivering increasing value to the C-suite may lie in another significant expense category: corporate real estate. Companies outsource facilities management and related services to reduce expenses, and those expectations are met, but they soon learn that real estate strategies can provide even greater value in areas such as employee engagement, worker productivity and risk management. The right real estate partner with the right strategy in place can also help companies optimize balance-sheet and P&L impact, enhance employee attraction and retention, and meet strategic goals in areas ranging from M&A to sustainability. These goals are often the responsibility of internal departments other than real estate, so gaining the benefit requires strong collaboration among internal teams. If this collaborative spirit doesn’t already exist at your company, bringing in a third-party real estate partner can help bridge communication gaps and align the goals of different departments to gain mutually beneficial results. Some areas where collaborative initiatives pay the biggest dividends include:

  • Human Resources — Everything from the location of offices to the appeal of the work environment can affect the recruitment and retention of knowledgeable workers. Employee productivity is also greatly affected by workplace factors such as office layout, comfort and the flexibility of the space to serve a range of needs.
  • Information Technology — Mobile and in-office technology enables more work to be done outside the office, making professionals more efficient while requiring less space per employee. Increased mobility also means facilities and IT must work together in maintaining a fully wired workplace.
  • Logistics — Location, design and management of facilities affect every link of the supply chain, from distribution centers to retail outlets and bank branches. Real estate also manages hundreds or thousands of vendor relationships, which often means aligning with Procurement or other teams that focus on supply-chain efficiency and risk.

Even C-suite executives take notice when real estate strategies further corporate financial goals. A financially savvy partner that understands your firm’s specific goals and challenges can help determine whether it’s best to lease or own a facility, how to get the most out of surplus properties, and which facilities are most in need of capital expenditures. Every industry sector has a particular set of needs: Banks are highly focused on third-party risk management, life sciences companies have regulated space in lab facilities, Internet firms have a high need for data center integrity, and many other firms have unique needs for R&D or showroom facilities. An outsourcing partner has to know not just how to run facilities, but how to run your facilities. The benefits of getting it right are huge — much greater than the millions in cost savings you can rack up— for organizations that are ready to change the way their internal departments interrelate. In all likelihood, some of your competitors are primed to make these changes. Are you? JLL’s short eBook titled Corporate Real Estate Outsourcing: Seven Things You Need to Know, outlines the biggest opportunities and most dangerous pitfalls companies face in making real estate sourcing decisions; strategic sourcing is only one of them. Take a few minutes to learn the rest.