How to align the organization of the CREM- department to strategy during a recession Thijs Ploumen Rianne Appel-Meulenbroek ( [email protected]) Jos.

How to align the organization of the CREM-department to strategy during a recession

Thijs Ploumen

Rianne Appel-Meulenbroek ([email protected])

Jos Smeets

Introduction

• Recession: reduce CRE costs instead of use value strategies

• New Ways of working to ↓m²

• Postponing maintenance / cheaper materials

• Align CREM organization to CRE strategy (like in business studies)

• Aim: provide CRE-managers with tool for evaluating organization CREM-department when applying CRE-strategy of cost reduction

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Research approach

• Explorative study 1. literature research for relevant components

organization CREM-department + CRE-strategy

2. interviews 8 CREM-departments (NL) + 4 large CRE advisors (JLL, C&W, CBRE, Redept) links CRE strategies + organization CREM department

3. construct model to evaluate alignment; focus on cost reduction strategy

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1. Literature

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CREM Organization

Process-management

SourcingCentralizationOrganizational

structureCompany-

culture

Kämpf-Dern & Pfnür, 2014

- Evolution of CREM- Focus on activities- Important tasks- Org. structure

- Position in macro structure- Central independent CREM

- Reasons- Activities- Mg’t levels- Use strategic partners

- Report performance- MIS- Insight corporate strategy- Network- Advisory function CREM- Specialised knowledge

- Change needed- Impact on personnel- Future vision

2. Interviews

• Large org’s• CREM dep’t present• Macro structure = division

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Organization KPN Philips Comp. 1 Shell Schiphol ABN Comp. 2 RGD

CREM dep’t since 2013 2007 2004 2009 2010 2002 N.a. 2014

#FTE 23.451 116.681 2.300 92.000 2.093 23.000 56.870 851

Sector Telecom Consumer goods Techn. Oil & Gas Transport

& RetailFinancial services

Financial services

Gov’t agency

Position CEO asset mg’

Cluster mg’r

operations

Property manager

Building service

manager

Manager corporate

fac. & RE 

Head of portfolio

mg’t CEO CRE CEO RE

M² BVO 650.000 X 120.000 500.000 37.000 750.000 430.000 6.900.000

2. Interviews

• CRE strategies

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3. Model for cost reduction

• Organizational structure (difference in opinions)

• Centralization

• Sourcing

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- Evolution of CREM: controllercontroller- Focus on operationaloperational activities- Important tasks: portfolio mg’t, rent/lease, maintenanceportfolio mg’t, rent/lease, maintenance- Org. Structure: functional (pro region)functional (pro region)

- Position in macro structure: above other comp divisionsabove other comp divisions- Central independent CREM: importantimportant

- Reasons: cost reduction + efficiencycost reduction + efficiency- Activities: rent/lease, aquis/disp., maintenance, FM, dev’trent/lease, aquis/disp., maintenance, FM, dev’t- Mg’t levels: tactical + operationaltactical + operational- Use strategic partners: yesyes

3. Model for cost reduction

• Process management

• Company culture

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- Change needed: importantimportant- Impact on personnel: highhigh- Future vision: joint supporting dep’tjoint supporting dep’t

- Report performance: importantimportant- MIS: importantimportant- Insight corporate strategy: importantimportant- Network: importantimportant- Advisory function CREM: importantimportant- Specialised knowledge: averageaverage importanceimportance

Conclusions and recommendations

• Not perfectly similar alignment, but many similarities• Model makes CREM executives aware of things to

consider when implementing a CRE-strategy• Strategic plan for decision making process• Pro-active attitude• Further studies

• KS between support departments + its added value

• More cases + all strategies

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Discussion

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