The Leader Magazine

MAR 2019

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F E A T U R E A R T I C L E 40 March 2019 the leader Using digital analytics to optimize efficiency in corporate real estate by Paul J. Luciani C orporate real estate (CRE) is not what it used to be. Gone are the days when it was only about physical real estate. Today, especially with the advent of the digital age, CRE is much broader. It has been dragged into the very fabric of the organisation. CRE is fast becoming a talent agenda, a core business enabler, a flexibility strategy, a wellness solution, an incubator, and the list goes on! Let's face it: CRE is now THE operating environment for the organisation. How then, can this complex operating environment be truly managed, given the multitude of dimensions it now encompasses – especially considering that each company has a slightly unique operating environment from another? To answer this, one must go back in time and learn from the past. At the turn of the 20th century everything was about vertical integration: a one- stop shop, a single instance of delivering an organisation's operating environment. Companies managed and sourced just about everything themselves, from real estate, facility management, education, and even childcare; these were large in-house teams servicing the needs of the core business under one roof. In the '70s and '80s, mainly stemming from the revolution of automation in manufacturing, things started to swing toward outsourcing: collectively purchasing goods and services into the organisation from specialised firms and freeing up valuable time and resources to focus on core activities via horizontal integration. Initially, it was thought that insourcing was the "only true way" of managing the operating environment for companies, until outsourcing came along. Then, outsourcing was the preferred way for many organisations to manage their CRE and other support functions. For at least 40 years, organisations cycled between the two main ways of managing these functions, and even had both frameworks at once. But then something happened that started to disrupt the cycle, stemming from a generation beyond X and Y, and into the M Generation. That is, Millennials began to focus on the individual and started to teach us that what really drives efficiency is not the framework (in- or outsourced) but the individuals within those frameworks. Then came along freelancing, gig workers, and contract workers, each having a unique workstyle skill and preference (see Figure 1). What has all this taught us? Simply put, job compatibility matters! We still have vertical integration and we still have horizontal integration, and now we have workstyle preference. This new focus on understanding the individual workstyle preference as a driver for efficiency has led to greater flexibility both for individuals and for organizations. The "one size (or contract) fits all" is no longer a mantra in today's digital age. With the emergence of big data, artificial intelligence, and sophisticated database technologies, information is allowing organizations to more quickly change out their resource strategy to suit their operating needs – especially down to the individual level. Relatively new is the approach of aligning workstyles to an organisation's functional operating environment. Many of the cost drivers associated with delivering functional operations (indirect) can be attributed to a misalignment of frameworks. Delivering with insourced workstyles to a function that, at that particular time, suits a more outsourced approach will drive up costs. The reverse is also true, and true for all frameworks. So, having the right framework with the right people at the right time matters! Figure 1

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