I was leafing through the latest copy of Harvard Business Review, when a two page IBM ad caught my eye.  It was entitled ‘2.2224 trillion dollars.  The Combined Revenue of the 1,130 CEOs surveyed in the 2008 Global CEO Study.’ It included the url for downloading (IBM.COM/DOING/CEOSTUDY and I found it fascinating and worth reviewing for all of us involved in looking into the future of the enterprise and what may be the most critical components of a successful business.

The Survey Pool

This study is the third edition of IBM’s  biennial Global CEO Study series. This year’s research is based on surveys of 1,130 CEO s, general managers and senior public sector and business leaders from around the world.1 IBM leaders conducted more than 95 percent of these interviews face to face.  The Economist Intelligence Unit administered the remainder by telephone.
 

Executive Summary

What will the Enterprise of the Future look like? To answer that question, IBM  spoke with more than 1,000 CEO s from around the world. These conversations, together with the statistical and financial analyses, provide a unique perspective on the future of the enterprise.  CEO s are rapidly positioning their businesses to capture the growth opportunities they see. The discussions about their plans and challenges revealed several striking findings:

Organizations are bombarded by change, and many are struggling to keep up. Eight out of ten CEO s see significant change ahead, and yet the gap between expected change and the ability to manage it has almost tripled since IBM’s  last Global CEO Study in 2006. CEO s view more demanding customers not as a threat, but as an opportunity to differentiate. CEO s are spending more to attract and retain increasingly prosperous, informed and socially aware customers. Nearly all CEO s are adapting their business  models — two-thirds are implementing extensive innovations. More than 40 percent are changing their enterprise models to be more collaborative.

CEO s are moving aggressively toward global business designs, deeply changing capabilities and partnering more extensively. CEO s have moved beyond the cliché of globalization, and organizations of all sizes are reconfiguring to take advantage of global integration opportunities. Financial ‘outperformers’ are making bolder plays. These companies anticipate more change, and manage it better. They are also more global in their business designs, partner more extensively and choose more disruptive forms of business model innovation.

Relevance to CRE and FM

What does this mean to corporate real estate and facility management professionals you might ask?  I think that it means the following:

• Since change is going to accelerate, now more than ever, we need a thorough accurate snapshot of what we have in our real estate portfolios, where it is, what it consists of and how is it utilized today.  Only with this accurate baseline information, can we begin to play the kind of ‘what if’ scenarios we will need to model when those changes become clearer. 

• We need to make sure that we have a flexible way of organizing the structure of the business in our real estate databases since it is more than likely that the enterprise models will be changing, which means so will the organizational structures.  We must have the ability to make whatever changes are needed quickly.

• We may only have real estate domestically today, but we need to make sure that the information we need to store in our databases can be easily adapted to any location in the world when our organization begins “to take advantage of global integration opportunities”.

These are just a few concepts I thought of as I read the report, but I would love to hear of your ideas after you have read it.
 

‘Increasing shareholder value through integrated workplace management system solutions’ by authors Hoefsmit and Yoa of Bearingpoint is a straight forward look at how one of  the major consulting companies regard this software solution. They have described the complexity of corporate real estate environments and how IWMS can simplify the problems and save money in the process.  The paper also describes a fundamental problem when CREs and FMs go to create a business case for IWMS and they are used to speaking in a spatial language (sf, meters) while the CFO talks in financial terms. This is where the value proposition needs to be defined in different terms than it is often done.

Bearingpoint has defined that a good return on investment (ROI) analysis can be the basis for the IWMS implementation.  The main thing is to start with the mission, vision, strategies and objectives of the business and then understand the strategies of each of the organizational units.  Then they can map what is required to the applications on the market (they advise against ‘niche’ solutions).  Also important in the design is the choice of value-based performance measures and tracking the key performance indicators (KPIs).

Hoefsmit and Yoa also site examples of Bearingpoint projects and research where they have seen IWMS improve the performance of real estate assets, including:

•    Creating visibility of leases which can reduce escalation costs by c. 6%
•    More efficient management of space costs and utilization saving c. 8%
•    More effective automation of operational processes saving c. 5%
•    True valuation and costs of real assets rolled up to enterprise financial systems for accurate depreciation and cash flow numbers saving c. 5%

These savings numbers are excellent and are in line with those presented in a work by Mike Bell on IWMS for Gartner a few years ago.  

Click on this link to read the entire whitepaper.  Let me know if you have any questions of the authors and we can contact them for answers.  This is a great addition to the IWMS knowledge base.

Trend Watch from CoreNet Global News Alert
Financial Week (02/18/08) ; Byrt, Frank

Soaring real estate prices, coupled with the prospect of weaker earnings, have prompted an increasing number of companies to intensify their efforts to rethink office-space costs. Corporate real estate cost controls can range from closing underused facilities and moving workers to cheaper locations to demanding more services or flexibility in office leases. One particular option is having a clause placed in lease accords that allows a tenant to buy its way out of the lease in the event of a substantial downsizing. Eric Bowles, CoreNet's director of global research, singled out Bank of America and Rockwell Automation. Both had the foresight to do sale-leasebacks of office properties a few years ago, which now potentially gives them substantially more leverage in managing leased space in the event of layoffs. Hewlett-Packard is another firm taking action in this regard, having recently stated its goal of lowering its per-employee real estate costs 33 percent by the end of the decade. The company's cost-reduction efforts are viewed as some of the most advanced, since the company tracks space costs per employee on a yearly basis, reports Bowles. Sprint Nextel, meanwhile, has had success with its "office hoteling" software program, which manages employee shared office space so that those who work at home or on the road have dedicated space when they come into regional headquarters.

Read the full article