The Leader Magazine

SEP 2017

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emerging future productivity? The point, from an analytics perspective, is whether metrics can be generated (not educated guesses), showing whether a new workplace's cost has had a positive impact on what matters (e.g., revenue, employee retention, innovation). From an operations perspective, are today's buildings operated more effectively because less money is wasted on unnecessary work and equipment and fewer breakdowns because buildings are smarter with predictive analytics? The interface between smarter building-management systems tied to the Internet of Things (IoT) allows better management of energy and space, such as monitoring shared spaces, e.g., conference rooms to determine if correctly utilized. Therefore, the management perspective becomes not whether the organization has the technology to do a particular job but whether it is the right job-enabling technology. Future-directed 'Company A' Having the right information is creating radical changes in CRE, as illustrated by two high tech companies. When a joint-venture partnership was announced, Company A had access to all relevant data to move forward; Company B did not. Within only two hours after calls were made to the CRE head at Company A, he could tell his new management group every employee in the affected group, where they were located and how many square feet they occupied. This knowledge allowed them to optimally shift people and building space. Additionally, an analysis could quickly be done to determine how space could be shifted to provide the necessary separation between the mother company and the new JV. Company B had to do all that manually by pulling out all these systems and putting it in spreadsheets which, in one participant's words, was "just a mess." Instead, Company A's actions exemplify what CRE is heading toward: the ability to be fl uid and transformative in managing traditionally rigid, fi xed assets. In this revolution, CRE groups are becoming more a part of business-transformation decisions than ever. Advancing from being a back-offi ce service hearing about decisions after the fact, CRE organizations are increasingly coming to the table during M&A discussions to enhance the conversation: "What would the bottom- line impact be on our real estate portfolio if we took action X?" Then, instead of receding into the background, CRE managers fi nd themselves running those scenarios and saying, "If we did Y instead of X, here's the bottom- line benefi t we would show," as an integral part of the business discussion. Technology as core business enabler Analytics is the differentiator. When management has access to a true repository of critical information with a good analytics tool effectively atop it, predictive impacts can be developed while simultaneously doing necessary back-offi ce tasks. By enabling CRE groups to maintain strategic and practical control of the real estate decision-making, they can outsource the tactical services more easily and with more control. In turn, with the combination of corporately controlled data and analytics, outsourcing gives management even more fl exibility within daily operations. If this burgeoning CRE environment of technology enablement and management-role enhancement seem more akin to tuning an instrument than buying a new one, that may be partially right. A better future is emerging through not just doing work more systematically but gaining a unique visibility – with new access to data – to say, "Wait, what if we did this instead?" That contrasts with the awkward scenarios of repeating the same mistakes operationally every year and/or producing wrong estimates that percolate through decision-making all the way to construction. The future may or may not be CRE's new Star Wars technologically, but expect a world of change in corporate decision-making. Phil Wales is CEO of Houston-based eBusiness Strategies, a CRE and workplace management consultancy. ThE lEadER SEPTEMBER 2017 65

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