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Publications: |
Feature Articles |
The Current Trend In Corporate OutsourcingJune 25, 2001Why the growing popularity of outsourcing from corporate and institutional owners to third party service providers? On February 21, 2001 members of ULI Los Angeles District Council and the Los Angeles chapter of N.A.C.O.R.E. gathered at the Century Plaza Towers to take a close look at outsourcing of real estate management in a panel discussion moderated by KPMG Consulting Managing Director Paul Garity. Panelists who represented end users and providers of outsourcing services, were CB Richard Ellis Executive Managing Director John W. Davis; Computer Sciences Corp. Director of Corporate Property Management Roger W. Kelley; Jones Lang LaSalle Senior Director Eugene F. Page, III; Peregrine Systems Director of Strategic Initiatives Nancy Sanquist; and United Systems Integrator National Managing Director Nick Westley.John Davis explained that outsourcing the function of real estate management is beneficial to companies not only on the real estate side, where "the internal real estate fee can be taken off the books", but also on the project management side, where firms often capitalize the fee against the project. Davis summed up the needs of today's large firms: "Companies today are asking for integrated outsourcing. The challenge we face is how do you integrate outsourcing across functional and geographic lines. Today's corporations are looking for a full service provider." With companies more familiar with outsourcing and proactive in managing their real estate portfolios to manage their bottom line, outsourcing providers are continually trying to stay ahead of the curve. Complicating matters is the global reach of corporations. Eugene Page reflected that when dealing with global markets, "many products cannot be exported around the world. Processes can be exported, so you use the same processes to create different products." More than ever, with the emergence of outsourcing as a familiar and workable option, the purchasers of these services are focusing on the question of value and where it lies in this new paradigm. As John Davis explains, "Now we are seeing larger owners of real estate portfolios across geographics looking for the same services that corporations are getting in managing their real estate portfolios." And always, according to John, the most frequent question is, "Where's the value?" Mike Dixon is Coordinator for ULI Los Angeles. | |
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