Who Should Read This: Anyone who has been asked, or anticipates being asked, to find creative ways to increase profit margins—whether by cutting costs, increasing utilization of assets, or finding opportunities to raise prices without losing customers.
Our Client: Vice President responsible for a global team dedicated to optimizing the use of real estate assets including offices, plants, warehouses, service centers, and remote dynamic locations, while also maintaining a positive, service-oriented relationship with demanding internal customer executives and their employees.
Whether you have 80 or 80,000 people in your company, today’s systems make it pretty easy to know which assets are assigned to each employee. What is much harder to discern is the “Red Riding Hood Effect”: is the assigned asset the appropriate one, sized and scaled properly for the employee or business unit? Is the employee or team making good use of the asset? If not, why not? Is it a problem with the asset—or are the needs different than you previously knew? And, of course, the bottom line: is the company paying more than necessary to use and maintain that company asset?
In our story, the client is responsible for real estate assets all around the globe, housing more than 80,000 people in jobs that involve desks, laboratories, locations for vehicle and equipment storage and movement, manufacturing sites, customer service hubs, remote dynamic “pop up” facilities, and more. With many large business units, all run by seasoned executives, demand is constantly high for the company to provide the best buildings and offices in the most convenient locations, with rapid response times. In short, every leader in the company likes to think that their line of business requires special attention. Over the course of prior decades, the impact of this expectation on the company’s balance sheet was stark, and the conclusion was clear: if the global real estate team continued to give the business units everything they asked for, in the manner desired, then the balance sheet would bloat. Sustaining that much real estate would increase expenses unnecessarily, and negatively impact profit.
Our client needed to make a fast and big change in how the company makes decisions about real estate investment, renovation, and build-out. The problem? No single system, process, data set, or report could provide all the information needed to understand the scope of the problem, or the scale of the risk to the company. The story they needed to present had to incorporate information about (a) what assets are currently being used; (b) what forecasts say what will be needed; (c) how the forecast use differs from the current state (e.g., square meters might stay the same, but change in space type could create a build out requirement); (d) What business value (revenues/profits) is anticipated for each scenario being considered; and (e) how to facilitate and steward each decision toward the desired results.
Our client engaged Abundiant to study the effectiveness of the global real estate team’s partially automated process, including the logic and data sets underlying their solution, the systems feeding the data, the breaks and manual overrides they had found necessary to impose, how data and recommendations were presented, and the impact of their approach on their stakeholders. Their request for us at the time was, “Can Abundiant streamline these interrelated processes for us?”
We quickly discovered ways to improve things. First, we created a new architecture for the team’s data model. We redeveloped the tools they used to capture user input, as well as the logic underlying their calculations. We made numerous improvements in their methods for pulling, querying, and connecting data and data types from various software platforms. We also provided new, dynamic views of their data, suggesting and creating new visualizations, and united them in an interactive dashboard. Abundiant helped the client think of new and different questions to ask, and new ways to solve for the answers. We helped them engage their stakeholders and cultivate a team of internal experts.
This effort was just a small part of the total scope of work Abundiant performed for the client, but the results are compelling. Team members around the world are now equipped to engage regional and business unit executives in strategic conversations about the use of company assets. Global real estate partners have become advisors to executives, routinely showing them fact-based inputs and outputs, walking them through various decision scenarios, and facilitating decisions that benefit the business units, the regions, the customers, and the company’s bottom line. They have become evangelists of their new solution, and even more importantly, this happened: their internal customers—the business unit and region executives—now ask for the global real estate solution as part of their routine business planning. The days of scrambling to react to orders from business units are over. The days of improving company profits, while maintaining customer service all around the globe, have arrived.