Unlocking the Value of Capital Assets, Real Estate, and Facilities Operations

Posted on 19 June 2009
Tags: Capital Assets, Decision-Making, Facilities Operations, George Bouris, Real Estate, Whitepapers

This week we will publish some very interesting white papers which I received from George Bouris SLCR, MCR who is a Principal with Deloitte Consulting.

While real estate and facilities typically represent a company’s second or third largest spend, they’re rarely taken into consideration as key components of strategic decision-making. The challenge is to gain a full understanding of the extent and cost of all owned and leased properties and incorporate this information into business strategy and planning.

At Deloitte, we have service offerings designed to help companies in their efforts to understand and improve all aspects of their physical infrastructure—Real Estate, Facilities Operations, Workplace Strategy, and Capital Asset Strategy—under our Capital & Real Estate Transformation services umbrella. We are convinced that a full appreciation of the direct impact of real estate holdings and facilities on expenses, investments, operating margins, productivity, and go-forward strategies can have a dramatic and positive effect on a company’s performance.

Our experience has shown that managing real estate and related physical assets are perceived as an administrative function rather than a strategic priority
that affects shareholder value. We believe these assets should be given consideration in decisions related to business restructuring, mergers and acquisition activity, off shoring, talent policies, and tax obligations, just to name a few.

Many companies struggle to consolidate the diverse functions, responsibilities, processes, and systems that constitute the physical asset life cycle. As a result, they have limited ability to realize potential cost savings and efficiencies. Nor do they have the ability to pro actively plan real estate strategy and align it with overall corporate strategy. Real estate assets need to be managed as effectively as any other part of a company, including: operations; recruitment and retention; out tasking and out-sourcing of non-core activities; tools and systems to manage the entire corporate real estate life cycle; key performance indicators; and performance management.

How to Drive More Value Through Capital & Real Estate Transformation

Deloitte has helped some of the world’s pre-eminent companies in their efforts to develop and implement a strategic roadmap for their real estate function and create additional value through their physical assets. Here are some of the key lessons we’ve learned along the way:

Create a coherent real estate strategy

Devote the time, effort, and rigor needed to create an enterprise real estate strategy. Examine your real estate and facilities investments and align them tightly with corporate strategies. Look for ways to simultaneously improve ROI and reduce risk. Identify the services and capabilities required to meet the company’s current and future needs.