In today’s fast-paced business environment, maintaining a competitive edge requires a laser focus on core activities. For most companies, managing office spaces and industrial facilities is not part of their core competencies. Yet, property management remains a significant aspect of operational expenses. This is where corporate property strategic outsourcing comes into play. By entrusting property-related functions to specialised experts, companies can streamline operations, reduce costs, and stay ahead of the curve.
Ray Sharp, Cushman & Wakefield’s Account Director explores the benefits and imperative of property outsourcing, examining how it aligns with modern business priorities and the evolving landscape shaped by climate change, cost pressures, and technological advancements.
Are You a Property Company?
How many CEOs start their day thinking their office or industrial facility should be their main priority? For most, that would be strategic self-destruction. It’s time to consider putting something safe between your business direction and that detonate button.
Who Manages the Property Supporting Successful Businesses?
Ever heard of McDonalds Property Management, KFC Leasing, or Subway Facilities? Neither have we, though Domino’s Pizza Inspections sounds like a dream job. The truth is successful businesses focus on their core activities and outsource non-core functions like property management to experts.
The Financial Impact of Property
According to the International Facilities Management Association, property costs can account for up to 30% of a business’s total operating expenses. In a rapidly changing world, medium to large businesses need to focus on their priorities to stay competitive. Large internal property teams are a relic of the past, with the risk of valuable knowledge walking out the door with departing employees. A select few companies are creating global platforms to outsource property functions effectively.
Core vs. Non-Core Activities
Core business activities provide competitive advantage, while non-core activities, like property management, are necessary to operate the business. None of the potential property food empires mentioned above owe their success to property management. Outsourcing these functions allows companies to focus on what they do best.
The Rise of Property Outsourcing
Outsourcing is no longer limited to call centres, drop shipping, and virtual assistants. Property, often the second biggest cost centre in a business, is the next growth market in this space. A study by Deloitte showed that up to 59% of companies are now outsourcing to reduce costs, and property is poised to follow suit. Employee and customer user experience within physical property is important for retaining talent and creating an inviting environment. Leverage the benefit of what others have created with one easy digital interaction point for your company, known increasingly as a single front door.
The Australian Context
In Australia, a country obsessed with property, employees managing these functions are often distracted from focusing on customers and business growth. Issues like air conditioning failures, power outages, and facility damage are unwelcome distractions that can be handled more efficiently through outsourcing.
Inefficiency of Internal Property Management
Directly managing property issues can be inefficient and costly. For example, calling multiple contractors for an air conditioning repair can result in lost customer leads and reduced productivity. Outsourcing these tasks ensures swift resolution and business continuity.
Why Now?
The convergence of climate change, cost pressures, and technological advancements makes now the perfect time to consider property outsourcing.
Climate Change
The world needs to change, and sustainability in property management is becoming increasingly important. Companies must be ready to measure and manage their environmental impact, using big data and insights to make sustainable decisions.
Cost
Global cost pressures are real. With inflation affecting various costs, controlling your property expenses through outsourcing can be a smart business move.
Technology
Technology and AI are transforming property management, simplifying complex issues and reducing costs. While there is no perfect technology system for overall property delivery, a few companies have developed integrated solutions that offer comprehensive property management.
Protect Your Company with Outsourced Expertise
Legislation, regulations, and business controls create a risk-averse operating framework. Embracing and continuously improving these frameworks through outsourcing ensures compliance and efficiency.
Setting up an outsourced property function provides a dedicated team supported by a robust platform, offering insights, compliance guidance, professional development, and more. This allows you to focus on strategic decisions while relying on experts for day-to-day property management.
Educate Yourself: A Small Investment Today Could Pay Off Tomorrow
Property is expensive. Whether it’s rent, building, or buying, the costs are significant. By leveraging technology and expertise from global property providers, businesses can avoid reinventing the wheel and stay ahead in a fast-changing world.
What gets measured gets managed. The few players that have benefited from decades of experience can offer valuable insights and efficiencies. Given the cost of property, it may be time to tap into this opportunity.
The Future of Property Outsourcing
Until someone cracks the one-system technology solution, property will remain a people business. Outsourcing is driving best practice, with major players like Cushman & Wakefield, JLL, and CBRE leading the way. Protect your company by getting the expertise you need from those who know property best.
