In response to an increasing trend among global corporations to standardise and centralise a number of functions across their global operations, a recent report from global real estate consulting firm CBRE Ltd says real estate management structures within global companies are increasingly being centralised in order to support business on a global scale.
This concept, which CBRE refers to as ‘going glocal’, means that within multinational firms, structures for managing infrastructure are evolving and that this evolution is likely to change the way in which corporate real estate is managed going forward.
The report says global oversight over real estate management has a number of advantages. For starters, it allows corporate decision makers to more effectively incorporate increasingly globalised strategies with physical locations. Consistency across global infrastructure also facilities the implementation of organisation-wide standards and practices in various business functions. Technology, too, is a big factor: with an increasingly mobile workforce, companies are finding that mobile technology and communication work most effectively when the organisation’s physical buildings and infrastructure function effectively and congruently across geographical boundaries.
That isn’t to say the ‘glocalisation’ comes without its challenges. As with any other area of centralised management across global lines, barriers in terms of culture (e.g. a silo mentality) or language can hinder effective global CRE management outcomes. Challenges associated with acquiring or developing human resources (managers) with the necessary mix of technical and personal skills to effectively implement globally-centralised infrastructure and real estate management, too, can be difficult and can require a significant level of financial and human resource investment.
How to do it
In its discussions with corporate real estate managers, CBRE says six key themes emerged with regard to how centralised CRE management can be effectively implemented.
1) Have a plan
Global real estate management strategy, participants say, must be consistent with the overall corporate business strategy. Systems must also be put in place to ensure effective data and information management across the portfolio with regard to knowledge around things such as critical dates, budgets and space standards.
Once these requirements are in place, an overall plan for real estate management can be devised and put into place.
2) Get the right team
As with any other function in business, the right team is essential if globally centralised real estate management throughout an organisation is to succeed.
The team must have a strong focus on aspects such as general management (planning, finance, supply chain, risk management) and customer relations management, as well as the communication and leadership skills to drive necessary change and performance across the organisation.
3) Partner with suppliers
CBRE says glocalisation relies on the concept of leveraging the supply chain to create ‘high value partnerships’, an increasingly key requirement of CRE teams.
In this context, suppliers are increasingly being driven to improve their capabilities in terms of global coverage and management capability, collaboration and cooperation, ability to provide solutions to the organisation and its business clients, and centralisation of senior leadership team to provide ‘one report in one place.’
4) Process flexibility and accountability
While centralised processes across the entire organisation in real estate management are ideal, it is important to maintain a degree of flexibility within this consistency. Standards which work well for leasing space in America or Europe, for example, may or may not be appropriate in Asia or the Middle East.
Across the team, there must be clear communication as to the reasons behind different leasing processes as well as clear lines of accountability.
5) Systems and technology that works
If all of this is to work, the right IT systems and technology must be in place.
These must not only be globally integrated, they must provide the team’s decision makers with easy access to data and information which is clear, reliable, timely and relevant to enable informed decision making.
6) Performance management
As with other areas of the business, effective performance management of centralised real estate management is necessary in order for CRE to succeed.
Performance should be measured and managed in a way that is clear, reflective of key strategic goals and provides incentives for employees and suppliers to deliver according to strategic objectives.
A Global Trend
As markets mature and technology continues to increase its capacity to enable the supporting of global structures, the CBRE report says management of corporate real estate assets and infrastructure will increasingly be managed globally.
Those who are able to implement global CRE effectively, the report says, will benefit from better coordination between global strategy and physical assets, smoother implementation of organisation-wide business practices across global operations and a better-facilitated ability to enable increasingly mobile communication within the context of the global team.