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Vested, outsourcing & property management


The largest facilities outsourcing deal in history

Working with property management organisations, we can appreciate the potential of this example for outsourcing core operations. The focus on what is described as  “win-win” relationships enables companies to drive innovation and increase their competitive edge.

Smaller property management companies being more flexible and quick witted – with closer relationships & smaller spans of control –  can adapt to this partnership approach.

Many companies have outsourced non-core operations, but few have managed the real estate outsourced relationship as effectively – and unconventionally – as Procter & Gamble (P&G), according to Kate Vitasek, author of the recently published Vested: How P&G, McDonald’s and Microsoft are Redefining Winning in Business Relationships.

In the book, Vitasek,  tells the story of how the multinational consumer product manufacturer’s relationship with Jones Salle Lang (JLL), a global financial and professional services firm specialising in commercial real estate services, transformed the contracting approach to corporate real estate in what was the largest facilities outsourcing deal in history.

In today’s rapidly evolving world, business relationships based on an outdated, “win-lose” mentality will not withstand a market that demands constant change and adaptation. Only by focusing on “win-win” relationships can companies drive innovation and increase their competitive edge, the book suggests. Vitasek illustrates this through an in-depth look at how JLL and P&G have worked together in a win-win fashion. In P&G and JLL’s agreement, both companies shared in the risk and the reward of the business with an approach that focused on mutual success. Their contract covered 40 separate areas of shared responsibility, including facilities management, project management and strategic occupancy services in 60 countries, an uncharted scope that neither company had achieved prior to this, the author explains.

Through transformative contract parameters originally established in 2003, JLL was empowered to deliver on P&G’s goals of achieving cost efficiency while exceeding customer satisfaction targets for six consecutive years. During that time, P&G’s Global Business Services (GBS) division reduced cost as a percentage of sales by 33 percent for its outsourced operations, including the work with JLL, says P&G in Vested.

Vested further illustrates, through the P&G and JLL story, five rules of successful vested relationships:

Article from the FM Link Newsletter, http://goo.gl/TQPnC

Vested: How P&G, McDonald’s and Microsoft are Redefining Winning in Business Relationships, by Kate Vitasek, published by Palgrave Macmillan

For your property requirements check out the website of the Society of Chartered Surveyors in Ireland  www.scsi.ie

Celtar, business advice from Dublin

Business mentor and adviser to owners of SMEs, mostly. Contributor to Irish Tech News. Searching for truth in the news.

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