The Leader - November/December 2007 - (Page 22)

110 to oNe: Global coN sol IDatI o N of foo D aND soft s erv I ces services contract for 32 locations worldwide was a high-profile opportunity large enough to warrant attention from the premiere food service providers and ensure best value to P&G. In addition, the food services industry is a mature, sophisticated market with several international providers, some of which were already providing service at P&G sites. A rigorous analysis of food services providers resulted in the selection of the Compass Group in 2005 as the best fit for P&G’s needs. Although P&G is the end user, Jones Lang LaSalle is principal to the global agreement with Compass and acts as Compass’ client and maintains responsibility for their performance. The global food services agreement has produced strong benefits, including significant cost savings, supplier investments, consistent service quality, global reporting and accountability, and a single point of contact. In addition, the selection of Compass to manage food services proved to be the initial step in establishing a platform for P&G, in collaboration with Jones Lang LaSalle, to “outsource” additional soft services. theN: buNDlING other soft servIces Based on the market intelligence attained and supplier capability assessments garnered from the global food service RFP, Jones Lang LaSalle began working on a strategy to collapse other services subcontracted by Jones Lang LaSalle (or in some cases directly with P&G) into one large global contract. The proposal called for Jones Lang LaSalle to “bundle” a series of “soft services,” including: janitorial, grounds maintenance, mailroom services, non-hazardous shipping & receiving, meeting administration, small office moves and reception. At the time, these services were provided by more than 110 local and regional vendors. This labyrinth of relationships offered limited, tactical capacity for reduced costs through local RFP processes. Moreover, it complicated the tasks of consistent service delivery, integrated reporting and risk management, and precluded opportunities to leverage economies of scale. Problem was, unlike in the food service industry, no one company was equipped to provide – or bundle – all these soft services for P&G on a global scale. But, one company did quickly rise to the top for consideration. Compass had built soft services capability in many of P&G’s key markets, and had a presence through the food service agreement in at least 32 major P&G locations. And, about 85 percent of the annual spend on the proposed bundle of services was attributable to 20 sites in the US and Western Europe. Expanding P&G’s relationship with Compass seemed promising. As a first step, Jones Lang LaSalle provided contract scope documents to Compass leaders, who in turn visited P&G’s top 20 sites. They then returned with an initial proposal. Jones Lang LaSalle negotiated pricing and contract terms, and a new relationship was created with a 12-month phased transition beginning in March 2006. An innovative aspect of the contract is that it is a pass-thru, performance-based contract. Both P&G and Jones Lang LaSalle believe it makes good business sense to align the financial risks and rewards with strategic suppliers to foster innovation and strategic growth. hoW to traNsItIoN The Jones Lang LaSalle team developed a plan to maximize first-year cost savings that included specific success criteria and performance metrics to ensure an effective transition. For each site, a 12-week transition plan outlined activities for Compass due diligence, site budget development, hiring, and ordering of equipment and uniforms. To expedite self-performance capacity and minimize service disruption during transition, Compass hired many of the incumbent supplier key employees. Believed to be the first-of-its-kind global bundled soft services outsourcing, the relationship resulted in several key benefits to P&G: Cost Savings – Staffing synergies from bundling services and elimination of redundant management and overhead fees in the supply chain yielded substantial savings during the first year and will yield significant savings over the length of the contract. Service Consistency and Scalability – Creation of a central platform established a nimble, global structure that enables rapid deployment of best practices, global standards, service level adjustments, and cost reduction programs. Customer Satisfaction – Feedback from P&G building occupants, site managers and business unit leaders confirmed that the transition was conducted with minimal disruption to operations. Cost Analytics – Integrated financial reporting enabled greater control over information and insight into such metrics as cost breakdowns by service globally, regionally and locally; benchmark comparisons to market; and cost modeling through service level calibrations. Service Innovation – The centralized platform enhanced the team’s capabilities for efficient reporting, developing quality tools, and implementing best practices. This stands in contrast to the previous model, when only the largest sites with the largest suppliers were able to approach this level of innovation in the soft services areas. Risk Management – Mitigated P&G and Jones Lang LaSalle global financial risk by collapsing the supply chain to fewer entities with the financial strength to accommodate indemnification and insurance requirements and thresholds. C M Y CM MY CY CMY K 2 0 0 7 the le aDe r 22 November / December

Table of Contents Feed for the Digital Edition of The Leader - November/December 2007

The Leader - November/December 2007 Leadership Contents Message from the CEO Real Estate in the News Investing in India 110 to One Smaller Workspaces, Better Workspaces Innovating the Workplace Through Design Sustainability and Energy Efficiency Getting It Right Using Location Intelligence to Reinvent Franchises Philips International’s Ron Blanken CB Richard Ellis’ Karen Ellzey The State of Louisiana’s Mike Olivier Industry Tracker Economic Developer Directory Discovery Forum Findings Career Development Emerging Leader Economic Development in the News A Look Ahead Executive Development Spotlight

The Leader - November/December 2007

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