LEADERSEPTEMBER 2005

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LEADERReal Estate Management

bout two years ago, Hewlett-Packard (HP) began a journey toward creating an integrated management system for our corporate real

estate portfolio. Today we are still on that journey, but we have accomplished a great deal since our fi rst steps. Our key accomplishments include signifi cant cost savings and eff ective information management as a result of consolidating global systems, implementing an integrated system architecture, and capitalizing on HP’s own products and services. In addition, we now have the potential to leverage the system in other workplace services processes.

It all began with the HP-Compaq merger. Th e merger imperatives were to deliver on economies of scale across the corporation, obviously in our products and services and additionally in the technology tools that we use internally.

At that time, we had decentralized systems, disparate data and a lack of a complete, consistent and integrated system for corporate real estate. As a result, the quality of the output wasn’t as good as we would have liked, and the cost to operate the systems was much higher than it needed to be. Th ese were some of the underlying pain points we were trying to resolve.

However, we knew that we could not get into a full reinvention eff ort. It would take too much time. Speedy and effi cient execution was key. Th us we followed the same guiding principles that applied to all of the merger integration, such as “Adopt and Go” and “Perfect Enough.” Th is meant that we

would pick the best practice from either HP or Compaq and go with it. We had to balance doing what was right from a strategic and tactical level with executing quickly.

Not only were we trying to deliver on economies of scale in the merger, we were also trying to be our own best customer of our own services. So rather than having our real estate organization worry about all the headaches of managing the IT infrastructure for real estate and having the skill sets and abilities to do it, we outsourced servers, data center and database administration and support to our own HP Managed Services group. Th is allowed our real estate staff to focus on running the portfolio.

Overcoming Challenges

Creating an integrated technology system to manage the consolidated portfolio was a large undertaking, to say the least (see Figure 1). Good project management and communications were essential. By working with executive

Toward an Integrated Technology Solution for Real Estate The HP Journey Continues

By Bob Sawhill

A

30 LEADER September 2005

Figure 1

sponsors and the project team, we developed a project plan that achieved a balance between priorities, resources, and time to execute. In addition, our solution needed to be truly global, covering our entire portfolio of more than 50 million sq. ft. (4.6 million sq. m.) worldwide. Th erefore, good communications and management of change principles were important to our roll-out success.

Another challenge we ran into as we got into the project was that the software application we had standardized for space management, or Computer Automated Facilities Management (CAFM), did not perform well in a global environment over a Wide Area Network. As with many other similar CAFM applications, it just really was not designed to work in that environment. We needed to have a centralized system and infrastructure, but we had a dispersed user organization across the world. If we had been forced to go with a very decentralized system to gain adequate performance, it would have been diffi cult to manage, costly to implement, and ineffi cient to support.

Fortunately, our own HP Consolidated Client Infrastructure group provided a solution that shifted the PC computing and network traffi c to HP Blade PCs within the data center. Th is enabled us to have both the economical centralized system and the application performance we needed.Another challenge we ran into was data standardization, a typical industry problem. It took a lot of work to standardize our process and then to integrate all the systems we had within the two corporations. We were also working with external service providers that were doing lease management for us, and they would track information diff erently. So getting all these databases linked up and consolidated was a key challenge to overcome. It does not need to be that diffi cult. As an industry, it serves all of us to get behind data standardization and the Open Standards Consortium for Real Estate (OSCRE), which was spawned out of CoreNet Global.

Results to Date

Our real estate portfolio information aided the decision-making process around consolidating our real estate portfolio following the merger. We reduced our portfolio by 17 million sq. ft. (1.6 million sq. m.) globally, which equated to approximately $200 million a year in annual savings. As we continue to seek further effi ciencies, we may fi nd that we are beyond the obvious low hanging fruit. Th us, we will need to rely more on this information to lead us to further optimization opportunities (see Figure 2).

One of the key innovations that contributed to the success of the project is that we truly consolidated our entire system: the software, the hardware and the support itself. We moved technology and process management to global programs rather than individual site programs or business divisions. Th is had signifi cant results as far as reducing our overall infrastructure and applications, and therefore, considerable cost reductions.

In fact, with this project and other projects in the Real Estate and Workplace Services organization, we reduced our applications and our cost by 70 percent. Because we shut down the servers and their support, we no longer had maintenance contracts or require staff to add to support the applications.

Th e other aspect that was innovative and led to success was the fact that we put into play an integrated solution

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Figure 2

architecture that is flexible and agile. It really helped enable the integration between applications, and we now have a good foundation to further leverage for other functions beyond real estate.

As well, our system is agile and adaptable beyond our internal applications. For instance, we pull data from our outsourced lease management provider into our system instead of maintaining a duplicate system internally. It’s more important to utilize the information than to do the day-to-day management of the data. For lease management, we no longer have any internal systems.

In our space management applications, we went from over six worldwide applications to one standard application. The databases and servers went from dozens of servers across the world down to three. The integration points went from these many dozens of servers down to a few. There was a lot of manual data entry that was done previously because we did not have integration in some places, and we’ve eliminated all that. At the same time, our user base is growing. Now that it is a global tool, real estate and other staff can adopt it very easily. We’re seeing a big usage increase in Europe, Latin America and the Asia-Pacific region.

Next Steps

We have put a good foundation in place that we can further leverage and use in other workplace services functions. For example, I am now beginning a project in facilities operations for our data centers. Our mission critical data centers require good information around how we’re tracking on performance indicators, reliability, building systems maintenance service levels, capacity analysis (space/cooling/electrical), and so forth. Our facilities operations group and our information technology group partner in managing the data centers that we operate for HP’s customers and our internal business systems. They have some good processes in place now, but they are highly manual in data collecting and reporting. So, we are looking at leveraging the new real estate portfolio system architecture and our central information reporting system to further automate data and information, and provide dashboard metrics and data center management.

To further the IT consolidation effort, we will be investigating other internal corporate systems for

additional opportunities to consolidate infrastructure, programs, and information systems. We’ll be working with finance, procurement, and human resources IT groups who have similar Business Intelligence systems to determine IT consolidation opportunities across corporate infrastructure silos.

Finally, there is always continuous improvement in terms of how the systems are managed. We will further institutionalize programs and mature processes and technologies to assure data quality, simplify use, and broaden usability to all audiences. We will also strive to enable operational excellence with effective information. LEADER

About the Author

Bob Sawhill, CFM, is Program Manager with HP’s Real Estate and Workplace Services’ Information Technology Department. A key part of Bob’s role is to bring business process and information technology — which often speak different languages — together.

Real Estate Management

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