Outsourcing outsourcing – a case study in consolidating service providers

Despite all of the bad press that outsourcing has received over the last few years, it seems to only be an issue in the technology sector and telecommunications, primarily when we are trying to get the tech support that we so desperately need.  Elsewhere, outsourcing is the latest tool for maintaining a slim, agile workforce and focusing exclusively on addressing profitable (hopefully) business opportunities.

When I began to read the article entitled 110 to One: Global Consolidation of Food and Soft Services (The Leader, p. 20-24), I was surprised to find out that “consolidation and preferred partnerships” are a relatively new phenomenon in the world of corporate real estate.  Although I am a relative youth in the industry, I always got the impression from colleagues that this was the status quo and had been taking place for decades.  Although this article reads like a tale of two giants – showcasing the partnership between Procter & Gamble’s facilities group and Jones Lang LaSalle’s global outsourcing engine – there is still a lot of insight to be gleaned from this case study.

There is definitely a trend in the corporate real estate & facilities community of increasing the service demands upon the global or preferred provider.  Instead of simply offering brokerage services and portfolio management, which may have been acceptable in the past, commercial real estate firms are now being asked to provide additional services ranging from facility management and lease administration through to project services and procurement.  There is even a rumor that some real estate firms are expanding into technology consulting, going beyond datacenter advising to also address IT concerns like software tools for a mobile workforce.

On page 22, the authors place in bold several “key benefits” that they have identified through their outsourcing relationship, including cost savings, risk management, scalability and “service innovation”.  Since I moved into real estate from the world of software, I was delighted to see the term “innovation” emerge several times in the article.  It appears that innovation, along with the other technology buzzword outsourcing, have finally migrated into a slower-to-adapt industry like real estate.  I find it telling that the trickle-down approach to improvement may have some merit; perhaps a more thorough evaluation of the trends of the last 3-5 years within the technology sector will yield predictions of where real estate will be in the next 3-5.

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