State of the Industry Report 2007-2008

Chapter Ten But this group of top practitioners – encompassing both corporate and service provider executives – supplemented that view with their first-hand perspective of the related driver: Solutions Delivery. Their views are mixed. There are pro’s and con’s about the benefits of service provider consolidation, for example. But there’s agreement that the likelihood of more supply-side M&A’s will continue, mainly due to the need for service providers to keep pace with the growing global scale of their corporate client base defining the industry’s demand side leading inevitably to fewer but larger global provider firms. QuestIon What are the pro’s and con’s of the consolidation taking place in the service provider industry worldwide from the end user perspective? result • Pros – less hassle, centralized interface, fewer people calling on the client, better coverage and service delivery in general, higher-level support on KPI’s, M&A’s, portfolio optimization, flexible leasing and other forms of asset management • Cons – reduced competition; two people with equally strong talents used to compete for same work, now both work for same firm so only one team comes to the table - Smaller universe responding to RFPs to allow qualification of bidders - Conversely, still enough solutions to get price components solved - Some organically growing, some growing by acquisition, some trying to ‘figure it out’ • To strive for strategic partnership, corporate clients must know the outsourcer down to the organic level – culture, quality standards, talent standards, maturity of organization in their growth - Some consolidation created different quality across service offerings as takes time to integrate organizations - Internationally, project management and facilities management support is lacking QuestIon How much more service provider consolidation will there be? result • It will continue – service provider leaders will be further ahead than today; newer comers will lag behind but if fundamentally they are good organizations, they also will catch up • One or two more acquisitions in generalist firms is likely in 2008 - See only four large generalist firms globally. But is a ‘Big 4 of CRE’ enough? - Not as good as five or more, but still provides some competition - Issue is whether service providers can be truly global – can a firm deliver full service in every location? Generally not. Gives end user the opportunity to partner with providers and with their other clients to share knowledge, drive innovation, grown particular market, etc. - End users can drive this type of partnership - Diversity is an area of opportunities in developed markets, such as U.S., to mentor minority firms, bring them to the table with the large global services firms to fill the service and talent gaps QuestIon What will happen to CRE outsourcing over two years? result • Increased pushing of functions to outsourcers • Firms will continue to push other functions to outside • Important to have criteria to guide what you insource, just as what you outsource chapter ten State of the Industry 2007-2008 43 http://www2.corenetglobal.org/home/index.vsp

Table of Contents Feed for the Digital Edition of State of the Industry Report 2007-2008

State of the Industry Report 2007-2008 Contents Chapter 1: Introduction : CoRE 2010 Framework and Report Structure Chapter 2: The Changing Business Environment Chapter 3: Executive Summary of Key Findings and Conclusions Chapter 4: CoRE 2010 Adoption Rate Chapter 5: Sustainability/Corporate Social Responsibility Chapter 6: Global Sustainability Survey and Roundtable Findings Chapter 7: Workplace Practices/Work Environments Chapter 8: Workplace Related Issue: The War for Talent Chapter 9: Asset Management/Portfolio Optimization Chapter 10: Solutions Delivery Chapter 11: Location Strategies/The Strategic Role of Place Chapter 12: Location Related Issue: Site Selection Morphs to Portfolio Alignment Chapter 13: Strategic Competencies/Enterprise Leadership Skills Chapter 14: Competencies Related Issue: The War for Talent in Corporate Real Estate (CRE) Chapter 15: Integrated Resources Infrastructure Solutions – IRIS Chapter 16: Technology and the Web Chapter 17: Technology Related Issue: Removing the Obstacles to Industry Data Standards Acknowledgements and Sources

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