CPN - January 2009 - (Page 15) CPN-CoreNet Global Roundtable Seismic Shift? Real Estate’s Role Continues to Change, but Just How Much? C oreNet Global and CPN joined once again during the CoreNet Global Summit in November to moderate a discussion among corporate real estate executives and service providers about strategies for a difficult market. Excerpts from the discussion follow. Visit www.cpnonline.com and click on “Netcasts” for an additional audiocast portion of the conversation. that person be more productive you can start getting big dividend benefits back for the organization. … We’re back into the art … as opposed to it being a science,but certainly there are quite a few corporates and service providers who are working hard to explore this, and it won’t be long before it does become more scientific.And then you’re talking about big productivity improvements for organizations that will mean a lot of money to them. Mark Gorman: Inside corporate real estate, we actually have two courses that we have been following consistently. The first one I just describe as “block and tackle.” And that’s: How do you look at your service levels, how do you look at your portfolio,where do you consolidate, what markets should you be in and how do you leverage? Some of the core things that we all know how to do. The other side, though, is, from my perspective, where we get to drive positive change. It’s the more artistic, but now with science backing it up. … How do we influence the workplace, how do we influence the environment, how do we drive change and how Suzann Silverman: In general, has the real estate department proven to be a benefit in the current economy—contributing to the overall performance of the company—or just another department cutting costs? Ed Noha: Senior executives are looking to real estate to drive some of the change that they may have looked for their businesses to drive in the past. You can effect some tremendous change through real estate, so recognition is coming through. Bruce Ficke: The exciting thing is (that) you’re seeing a workforce of the Gen Ys and to a great extent the Gen Xs, who are driving up the importance of real estate, and corporate clients are now realizing that they can use real estate to attract and retain talent, and that’s important. Silverman: Does that remain the case in this kind of an economy, in which corporations are laying people off? Ficke: It does. There are layoffs, but there also continues to be hiring, and you continue to need to be able to attract and retain talent for your business. Barry Varcoe: What we haven’t yet cracked is looking at the physical workplace and the digital workplace as the same coin. We still look at it as two sides of the same coin, but we’re not really bringing them together fully. Now, when you start worrying about that in the context of alternative officing if what you’re doing is actually helping nies are trying to figure out how do they do it next,this is the opportunity for us to present those solutions that fundamentally change the game. yyy Prentice Knight: We’ve talked about the fact that there have been dramatic changes in the science of corporate real estate management since the downturn of the early ’90s.There have also been dramatic changes in the service provider industry. Much of the work that used to take place inside the corporation was outsourced; we now have some huge companies on the service provider side that didn’t (previously) exist. Is that making any difference in terms of how the corporates respond to this kind of downturn? Gorman: We’ve been in what we call a “supplier-dependent” model for 10, 12 years now, and our reliance on our providers is intuitive now.The industry itself has become more sophisticated, and it’s not the same kind of taskoriented activity anymore.It’s not me asking my provider to go find something. It’s a much more collaborative environment now. Data and resources that are available to my providers the team’s just bringing that in. Varcoe: There are big differences (since the early ’90s). It comes back to this art-and-science thing.In the early ’90s,there was a lot of low-hanging fruit and (corporate executives would) outsource to a service provider who could strip the costs out much more quickly. The outlook has changed.All of that low-hanging fruit is more or less gone. That sort of offering is now much more of a commodity—lower margin, plenty of people can do it.There’s also the increased complexity of the fact that you’ve now got all sizes and shapes and shades of organization out there offering you those services. From a corporate point of view, it is much more complicated to work out how you are going to get the best out of the market. The other thing (is) the whole way we’re looking at this recession. How long ’til we get back to broadly what we understand and what was there before? The other thing that can happen from those situations is that you actually get a structural change.What I’m wondering is, is this the meteor that’s hitting the planet and all the 15 do we leverage connectivity, how do we leverage mobility, how do we leverage networking? And understanding that there are now a variety of solutions that we can put into play.And when compa- www.cpnonline.com • January 2009 • COMMERCIAL PROPERTY NEWS http://www.cpnonline.com http://www.cpnonline.com
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