The Leader - May/June 2008 - (Page 28)

B ui l D in G FlexiB ilitY in to B u sin es s s trate G Y: trans Fo rMati o nal p artne ri nG anD o uts o urc inG sourcing world. There is a continuum from first generation outsourcing through to TP&O, and it is being positioned as a way to build flexibility and adaptability into the business strategy, therefore improving operational efficiency whilst still reducing the costs. The in house CRE team moves from being an in-house supplier with a supply chain to becoming a partner to the business. The model has been developed in response to the need to ‘transform’ business into the flexible environment. This approach to outsourcing takes advantage of four key factors, which need to be in place to ensure success. These are the key principles of TP&O that can be applied in CRE. The first of these is Operational Efficiency and Optimization, which involves an emphasis on straight-through production processes that are less labor intensive, and therefore deliver the promise of cost reduction made by traditional outsourcing for 5-20 percent of both capex (capital expenditure) and opex (operational expenditure). It also makes extensive use of pre-assembled supply chains, category management and offshore sourcing and where scale is available, shared services. This is largely held within the TP&O partner and is their delivery platform. This also provides the ideal basis for cross geographic management and optimization. The second factor is Business and Operational Change, which involves installing new processes, skills and capabilities within the client organization and workplace in order to help the business move forward towards having a high performance team. Business change will include behavioral change, environmental change; new working practices and will be supported and driven by the CRE environment. This process requires the rapid creation and dissolution of alliances, and provides a credible, busi- ness focused value proposition for the CRE team back to the business. It equips the client and TP&O team with a common goal and set of values and a clear set of skills to deliver the agreed outcome. These may include technical skills but will also certainly include change skills and business skills (e.g., Customer Relationship Management). The third factor is Technology Leverage, which involves ensuring that a technology platform is in place that enables rapid communication, decision making and efficient operation. The purpose of this approach is three-fold, to support workflow and operational processes, and also as a vehicle for capturing all knowledge. Finally and perhaps most importantly it is the platform for management information which enables not only decisions to be made but also influence on the business by CRE teams and their TP&O partner. The fourth factor which needs to be in place is a Creative Commercial Model, which uses savings and capital receipts to fund business change as well as bottom line impact. This encourages a drive in profitability for all the team. This is a dramatic step change both for CRE end users and also for the traditional supply chain. Effectively, the approach is focused on business performance and driving change through CRE. Consequently, the mix of the traditional skills of Property Management, Transactional Management, Capital Works and FM are all services which one has to obtain at best practice level and ensure that they themselves are operating at an optimal level at any one time. However, the core of TP&O is not the traditional services; it is the integration of these services and the business change that can be driven tH e le aDe r 28 MaY / j u n e 2008

Table of Contents Feed for the Digital Edition of The Leader - May/June 2008

The Leader - May/June 2008 Leadership Contents Message from the CEO Real Estate in the News Green Real Estate Work Without Boundries Building Flexibility Into the Business Strategy Multi-Generational Work-Force Design Work Force Longevity Analysis Wells Fargo's David Nelson Pennsylvania's Michael Rossman Globalization 2.0 Site Selection Consultant Directory The New York Report: A Core of Traditional and State-of-the-Art Opportunities Discovery Forum Findings Industry Tracker Young Leader Career Development Effective Leadership Economic Development in the News A Look Ahead In Our Next Issue Calendar of Seminars Index of Advertisers Executive Development Spotlight

The Leader - May/June 2008

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