Global Corporate Real Estate & Project Management – Expediting Partner Selection for Step Change Post-Divestiture
Company Profile – Global Mid-Cap Pharmaceutical Company
- Divestiture from major global pharmaceutical company
- US Headquartered
- NYSE listed $10 Billion market capitalization
- Over 100 sites in 40 countries
- Offices, labs, manufacturing centers and warehouses
OVERVIEW & CHALLENGE:
Forming a new mid-cap company from a global pharmaceutical major divestiture required rapidly implementing new internal support structures, governance and delivery platforms. Limited operational support from the former parent corporate real estate (CRE) team and lack of interest from the inherited, long established global incumbent CRE and global project management (PM) provider only exacerbated the situation.
The newly appointed CRE (Real Estate (RE)/Project Management (PM)/Facilities Management (FM)/Security) global lead wanted to understand the opportunities that the current market practice offered and needed help to address immediate transfer projects and “business as usual” CRE activity, such as contract expirations, rent assessments, lease notices and third-party liaisons.
In addition, the new pharmaceutical company recognized its culture was and needed to be different from the parent it had just disconnected from, not only as a result of its mid-cap scale, but also because of its structure and leadership approach to the business. This meant less central control, more local engagement in CRE decisions and policies, plus greater flexibility in the application of space and furniture standards.
In order to rapidly build a global corporate real estate organization that would be aligned with the new company’s structure, culture and strategy, the firm needed a consulting firm with the global breadth and depth of experience and knowledge of best practices in how to design an effective CRE organization, process and capability. Trascent ran a series of market briefing workshops and business stakeholder interviews to clarify the “voice of the business”. Then it supported the CRE lead to create a business case for action.
Trascent helped to devise a new operating model for global CRE – both for in-house and external delivery of services. For third-party vendors, service silos were consolidated into one global service contract to increase commercial leverage while having a less structured approach for some elements like furniture procurement.
The structure of the proposed model was:
- Small central team with mandate to support business units in delivery of CRE services
- Governance role for global standards, technical expertise and management of external partners
- One global integrated lead outsourced partner
- Centrally managed but locally delivered
- CRE to provide support and consistency between regional groups
- Interaction with all CRE and business groups at regional/local levels
- Best in class broker or project manager in all deals, managed centrally for consistency and quality
- Steering committee representing key stakeholder groups to guide overall approach
Outsourced CRE Services
- One CRE Transaction (acquire/dispose/renew)
- Lease data administration (including rent pay US)
- Strategic portfolio planning
- Project management (fit-out, new build)
- Workplace design & space planning
- Furniture (local procure to global standard)
- Facilities Management (separate from CRE)
Trascent worked with the CRE lead to develop the business case and financial model including joining in to support the steering committee meetings and preparing all necessary materials for executive approval.
In parallel, the CRE lead brought on board a program manager to address the ongoing projects while the strategy was devised, and then new frameworks were put in place. This kept day-to-day operations moving and avoided distraction for the strategic project.
The executive committee approved the new global corporate real estate strategy, structure and business case. Based on this approval, the go-to-market strategy was implemented in a focused four-month RFS solutioning process. The tight timeline was driven by a client business imperative, and Trascent drove the process through bids, yellow pads, negotiations and onto transition.
Outcome benefits in cost, risk and efficiency to the in-house team and better engagement with the global business
- New for the business:
- Engagement – direct input to all projects
- Reduced project cycle times and better cost control – no surprises
- Central support
- Direct access to CRE supplier partner team
- Less imposition of global standards and policies – but better governance
- Dynamic data – real time analytics providing multi-lens view of activity and added value
- Extracting value – proactive portfolio management to create opportunities to optimize costs and more closely align real estate to the business plan
- Performance metrics – visibility on real estate performance and supplier service
- New CRE partner provided:
- 20% savings on former fee costs
- New technology tools
- Workplace support services
- Portfolio strategy and analysis
- Consolidation of suppliers to one global lead
``After our divestiture and as a new entity, we had no in-house real estate operational capabilities. We were facing multiple real estate projects around the world, and we needed to quickly develop a future state global real estate program.
We turned to Trascent for their unbiased market intelligence to help us with establishing a right sized program and manage an RFP process to select a global real estate provider.
I was highly impressed with their industry knowledge, process discipline and negotiating skills, which resulted in a favorable contract with a partner that was the best fit for our company and a very smooth transition process`` - Global CRE Director, Global Pharmaceutical Company