Week of October 29, 2001
The Time is Now for Corporate Real Estate
By RON STARNER Site Selection Magazine
DALLAS -- When's the last time you took a hard look at the performance of your corporate real estate (CRE) department? Are you getting the results you expect? And if not, are you prepared to change your organization?
Those were the questions posed to some 1,500 attendees last week at the Texas World Congress of the International Development Research Council (IDRC). The title of the conference - "Enhancing Corporate Real Estate's Value Proposition in Times of Economic Change" - hinted at the larger issue now facing CRE today: delivering better results with fewer resources.
Massive job cuts, spending reductions, outsourcing and downsizing seem to be the theme of the day in corporate real estate circles, but a number of speakers at IDRC encouraged attendees to find growth opportunities in troubled times.
"The six critical industries of the future will be technology, transportation, telecommunications, financial services, entertainment and bio-medicine," said Jeff Thredgold, president of Salt Lake City-based Thredgold Economic Associates. "When you realize that only 1 percent of the 39 million miles (62.4 million km.) of cable in the United States is being used for telecommunications, you begin to realize that amazing things are coming."
Those amazing things are coming, the economist said, especially for those corporate real estate executives who master the change management strategies needed for the 21st century. Those strategies include:
Survival Keys: Innovation,
Dr. John Seely Brown, chief scientist of Xerox and co-founder of the Institute for Research on Learning, told IDRC attendees at the Oct. 24 FutureWatch Breakfast that the two keys to surviving in this rapidly changing business environment are: 1) to innovate faster than your competitors in terms of product, process, infrastructure and the organization's culture; and 2) to learn from the periphery.
In other words, he said, seek out knowledge from non-traditional sources in your organization. Don't just learn from your research department. Learn from your call centers, your sales force, your truck drivers - everyone in your company who serves on the front lines, interacting the most directly with your customers.
"The challenge is to move past the focus on information and the individual to participation and interaction," Brown said. "In this sense, the context of information is key, as is communication and the role of communities. The design of information space, social spaces and physical spaces is critical."
Streamlining Processes via the NetSo, too, is the use of the Internet to streamline business processes. In short, companies that harness the power of the Internet to gain market share and move goods and services quicker to their customer base will win the day.
Examples of this new strategy abounded at IDRC. FacilityPro in Atlanta is using the Web to deliver e-procurement platforms for Equity Office, Service Resources, Cushman & Wakefield and Haverty's Furniture. Mike Gunter, vice president of the Customer Solutions Group for FacilityPro, said that his company's customer contracts now represent more than 450 million sq. ft. (40.5 million sq. m.) of space in more than 4,000 locations.
The FacilityPro supply network streamlines supply chains, Gunter said, by rationalizing a company's base of suppliers, providing a single source point for nationwide distribution, and centralizing the management of all procurement.
The net effect? "Streamlined back-office processes result in reduced overall operating costs," said Gunter.
Another Web-based service provider, Virtual Premise in Atlanta, used its presence at IDRC to announce its new partnership with Ford Motor Land. Virtual Premise is now supplying a comprehensive project management system on-line for Ford.
"Ford Land has more than 2,000 team members who will have access to the Virtual Premise system," said Andy Thomas, one of the founders of Virtual Premise. "This systems gives them the ability to manage all of their physical space, including access to all critical dates on lease options and expirations. Our goal is for Virtual Premise to become the one, standardized platform for CRE [departments] to have all of their information in one place."
For more information on new service-provider initiatives in the technology arena, see the January issue of Site Selection magazine. Also, other technology service providers will be profiled in future articles on SiteNet (www.sitenet.com), the official Web site of Site Selection.
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