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Customer Service Center F a c i l i t y S t a t u s

� B u d g e t , S i t e a n d F a c i l i t i e s O r g a n i z a t i o n O v e r v i e w

� F a c i l i t i e s S c o r e c a r d

� F a c i l i t y P l a n - S i t e P l a n , V i s i o n , M i s s i o n a n d

S c e n a r i o S u m m a r y

� K e y A c t i v i t i e s

� S t r a t e g i e s , P r o g r a m s a n d R e c o m m e n d a t i o n s

© 2016 Labarre Associates, Inc.

© 2016 Labarre Associates, Inc. 2 of 25

Customer Serv ice Center

F a c i l i t y P l a n ,

S t r a t e g i e s , P r o g r a m s

a n d R e c o m m e n d a t i o n s

Prepared by: Barry Lynch, NCARB, MBA, CFM, IFMA Fellow

Labarre Associates, Inc.

8385 Rushing Rd. East

Denham Springs, LA 70726

(225) 664-1934

[email protected]



Part I.

Budget, Site and Facilities Organization Overview



1. CSC Budget Overview

Total Cost of Facilities

Customer Service Center

Winston-Salem NC

1998 1999 2000 2001 2002 2003

1. Lease Cost 1,875,948 2,290,172 2,290,172 2,290,172 2,326,829 2,326,829

2. Operations Cost 1,204,625 1,198,840 1,227,782 1,253,472 1,279,932 1,307,187

3. Capital 0 2,800,000 0 800,000 0 0

4. Depreciation 1,649,768 1,698,000 1,838,000 1,978,000 2,018,000 2,058,000

5. Total 4,730,341 7,987,012 5,355,954 6,321,644 5,624,761 5,692,016

CSC 1998 Actual Budget

40%

25%0%

35%

Lease Cost Operations Cost Capital Depreciation



2. Key Cost Measures

Total Facilities Cost per Sq. Ft.

$0.00

$5.00

$10.00

$15.00

$20.00

$25.00

$30.00

$35.00

$40.00

$45.00

$50.00

1995 1996 1997 1998 1999 2000 2001 2002 2003

$/s

q.

ft.

Office Total IFMA Benchmark*

Facilities Cost per Person

$-

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

1995 1996 1997 1998 1999 2000 2001 2002 2003

$/p

ers

on

Office Total IFMA Benchmark*

-

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

8,000,000

1995 1996 1997 1998 1999 2000 2001 2002 2003

CSC Total Cost of Facilities

Lease Cost Operations Cost Capital Depreciation



3. Site and Building Overview

Stacking Plan

Site Plan

5 AON AON

4 Pepsi-Cola BB&T

3 Pepsi-Cola BB&T

2 Pepsi-Cola AON

2nd Floor lease Starts Jan. 1, 1999

1 Pepsi-Cola Building Office/ Lobby/ Cafeteria AON

Reynolds Carolina Credit Union

C Pepsi-Cola Lobby/ Auditorium/ Common Corridors Parking BB&T Lobby Dock

Pepsi-Cola Fitness Center

LOBBY LOBBY LOBBY

SECTION A SECTION B SECTION C

UNIVERSITY CORPORATE CENTER

August, 1998RENTABLE AREA

Vacant Pepsi-Cola AON RCFCU BB&T Total Key

5 0 0 63,878 0 63,878

4 0 30,705 49,695 80,400 Building Common Space

3 0 39,845 40,555 80,400

2 36,657 40,830 0 77,487 Vacant Space

1 34,758 18,582 1,471 0 54,811

C 11,559 20,946 10,519 43,024 Pepsi-Cola

11,559 162,911 123,290 1,471 100,769 400,000

BB&T

N O TE

1. Pepsi-Cola 2nd Floor Space - lease to commence in January 1999 AON Corporation

2. Pepsi-Cola 5th Floor Option space given up in July 1998 to AON Corp.

3. All non-Pepsi areas are estimated Reynolds Carolina Federal Credit Union

Assigned Parking

LOT PEPSI

A 0

B 0

C 110*

D 185

E 144 SUBTOTAL 439

Unlimited parking in Lots "F"

& "G"

Parking

Parking

A Concourse Entrance

B C

1st Floor Entrance

LOT A LOT B LOT C LOT D

LOT E

LOT G

Reynolds Blvd.

LOT F LOT G



4. Key Facility Facts

� Built in 1978, University Corporate Center is a 525,000 (Gross),

400,000 (Rentable) Class A office building that is the Former

RJRNabisco Corporate Headquarters.

� The building is owned by Wake Forest University and is currently

for sale.

� Amenities include: cafeteria, indoor executive parking, 400 seat

auditorium, spacious lobbies, multi-bay loading dock

� CSC Leases 162,909 square feet of space on the concourse level

and floors 1, 2, 3 and 4 of the A (east) portion of the building.

� There are a total of 1,701 parking spaces available, with 854

assigned.

� Office space operates 14 x 5 (14 hours per day, 5 days per week)

� Data Center operates 24 x 365 (24 hours per day, 365 days per

year)

� Key Tenant Organizations include:

� IT - Information Technology

� TELSEL

� Accounts Receivable

� Support

� Total Seated Population varies on almost a daily basis and is

currently 727.

� Build-out of the recently leased 2nd floor space will increase

seating capacity by approximately 100.



5. Facility Department Organization

The CSC facilities department relies on an outsourcing service

delivery strategy. The in-house staff consists of a facility

manager, an administrative assistant and a maintenance

coordinator. When the CSC was started, it was expected that

the main focus of the facilities department would be

supporting the Data Center. While this is still a primary

responsibility, organizational change has been a constant, and

supporting staff reorganizations and moves has become a

major part of the facilities department work. External vendors

and a contract project manager provide support for moves

and renovations.

Maint. Coord.

Facility Admin.

Contract Project

Manager

External Vendors

Facility Manager

CSC STAFF



Part II.

Facilities Scorecard



1. Overview and Goals of the Scorecard Facilities provide the infrastructure (place and technology) for

business. Without them, the business could not function. Key Facility

goals include:

Cash Flow/ Cost Management/ Asset Utilization

� Keep Facility Operating cost per person below average

� Prudently manage project capital and expense to support

corporate financial objectives

Customer Service

� Ensure that moves, move planning and change management do

not slow down necessary business changes.

� Develop and maintain a Facility Plan that anticipates needs,

tracks performance is communicated to appropriate personnel.

� Maintain a written Business Continuity Plan for the Data Center

� Test and maintain a back-up site for the Data Center

� Test and maintain emergency power generation capabilities

Productivity

� Ensure that required seating capacity is provided to tenant

organizations while still maintaining maximum utilization of the

facility and allowing for future changes.

� Maintain 100% uptime for the Data Center and technology

infrastructure.

� Maintain a workplace that supports tenant requirements



2. Scorecard

CSC FACILITIES DEPARTMENT SCORECARDMarch 1, 1999

Facilities provide the infrastructure (place and technology) for business. Without them, the business could not function.

Key Facility Management and Planning measures include:

Cost Management - Effective cost management of the facility infrastructure frees up cash to invest in, and grow the business.

Customer Service - Change management, (move planning and execution), should not hold up core business change.

Effective facility planning ensures on-going facility support for changing business requirements as does best practice management

of the computer center. Deficient facility planning could jeopardizes future growth and quick response to changing business needs.

Productivity - efficient use of the facility is one indicator of the effectiveness of facility planning and on-going change

management. If the Computer center crashes or does not support business processes, financial and service targets

could be missed.

Cost Management/ Fixed Asset Utilization

Customer Service

Productivity

Change Management

It is essential that facility moves and relocations

"stay off the critical path" of all CSC change

efforts. Performance includes:

* 47 (or ?) Individual Moves -

accomplished per plan

* 3 (or ? ) Team moves -

accomplished per plan

* 1 (or ?) Reorganization - accomplished

per plan

Business Continuity Management

Effective Business Continuity

Management requires training, testing

and coordination with business units,

facilities functions and Information

Technology. "Best Practices" in place

include:

* Written business continuity plan

* Successful test of back-up site

* Successful test of emergency power

generators

Facility Planning

Good planning requires anticipation, not reaction to business

needs. The following "best practices are in place at the CSC to

ensure that facilities continue to support business objectives:

* Site Mission and Plan - in place and communicated

* Planning Horizon - Site plan looks beyond site

saturation - includes market value analysis , exit

strategies, time frame of more than 10 years

* Anticipation - next projects anticipated and & action

plan developed

* Facilities Performance - tracking of facility

utilization and effectiveness

-

1 ,0 0 0 ,0 0 0

2 ,0 0 0 ,0 0 0

3 ,0 0 0 ,0 0 0

4 ,0 0 0 ,0 0 0

5 ,0 0 0 ,0 0 0

6 ,0 0 0 ,0 0 0

7 ,0 0 0 ,0 0 0

8 ,0 0 0 ,0 0 0

1 9 9 5 1 9 9 6 1 9 9 7 1 9 9 8 1 9 9 9 2 0 0 0 2 0 0 1 2 0 0 2 2 0 03

C S C T o ta l C o s t o f F a cilitie s

L ease C o st O pera tions C ost C ap ita l D eprec ia tion

Occupancy -

C apacity v s . Required

-

1 00

2 00

3 00

4 00

5 00

6 00

7 00

8 00

9 00

1 ,0 00

94

- P

3

94

- P

10

95

- P

3

95

- P

10

96

- P

3

96

- P

10

97

- P

3

97

- P

10

98

- P

3

98

- P

10

99

- P

3

99

- P

10

Capacity Requ ired

T o ta l F a c ilitie s C o s t p e r S q . F t.

$ 0 .0 0

$ 5 .0 0

$ 1 0 .0 0

$ 1 5 .0 0

$ 2 0 .0 0

$ 2 5 .0 0

$ 3 0 .0 0

$ 3 5 .0 0

$ 4 0 .0 0

$ 4 5 .0 0

$ 5 0 .0 0

1 9 9 5 1 9 9 6 1 9 9 7 1 9 9 8 1 9 9 9 2 0 0 0 2 0 0 1 2 0 0 2 2 0 0 3

$/s

q.

ft.

O ffic e To ta l IF M A B e n c h m a rk *

Facilities C ost per P erson

$-

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

1995 1996 1997 1998 1999 2000 2001 2002 2003

$/p

ers

on

Office Total IFM A Benchmark*

C OM P UT E R CE NT E R

P erce n t Up tim e

0.00%

20.00%

40.00%

60.00%

80.00%

100.00%

120.00%

94

- P

3

94

- P

10

95

- P

3

95

- P

10

96

- P

3

96

- P

10

97

- P

3

97

- P

10

98

- P

3

98

- P

10

99

- P

3

99

- P

10

P ercent Up time

1 00 %

U p tim e



III. Facility Plan Executive Summary

Site Plan, Mission, Vision and Scenario Summary



1. Current Site Plan � Continue to support Data Center and CSC Operations

� Commence Lease of 2nd floor space in January 1999. Build-out space in

one phase with furniture installed as needed.

� Renew original lease in 2003 (unless business changes dictate other

measures). Planning for expanded space, should begin two years before

needed date due to local lease market conditions.

� Keep budget increases in proportion to increased space and population

(excluding project cost)

2. Mission To provide overall facilities leadership that optimizes the CSC work

environment with space efficient and functional concepts

3. Vision A written facility vision provides a guide for future planning efforts. It keeps

planning teams on track and is the first facilities stop in response to on-going

organizational change.

Organizational Goals

� Ownership (Basic Facility Philosophy) - Lease office space, minimize

cash flow, outsource facility services.

� Financial (Cost Control Approach) - control overall leased area

� Performance - Provide a high-performance and flexible workplace.

No unscheduled data center downtime.

Practical Limitations

� People - density should not go below 150 sq. ft. per person.

� Organizational Purpose (i.e. the work) - Tel-Sell revenue of $575

MM equates to $2.3 MM per day of potential lost revenues due to

failure of the facilities infrastructure.

� Work Environment (i.e. place and technology) Site amenities and

the work environment play a positive part in employee recruitment

and retention. Work process improvements and technology changes

will continue to create change at the CSC.

FINANCIAL

ORGANIZATION GOALS

A facility vision strikes a balance

between ownership, financial and

performance goals and the practical

realities of coordinating the people,

work, place and technology of an

organization

PRACTICAL LIMITATIONS

A written facility vision provides a guide for

future planning efforts. It keeps planning teams

on track and is the first stop in changing facilities

in response to dramatic organizational change.

OWNERSHIP

PERFORMANCE

OWNERSHIP

PEOPLE

PLACE &

TECHNOLOGY WORK



4. Facility Plan - SCENARIO SUMMARY

A. Hypothetical Plan - Approach

A computer model was set up to project facility needs and associated capital

and operating costs over a 15 year period for 16 scenarios that included:

Scenario 1 - Lease additional space at University Corporate Center

Scenario 2 - Lease Additional space in the Winston-Salem market place

Scenario 3 - Build-to-Suit with long -term lease

Scenario 4 - Build-to-suit, combined with keeping a partial lease at

University Corporate Center

Analysis included a 2%, 5%, 7% and 10% growth factor for headcount in each

scenario, bringing the total number of scenarios to 16.

Capacity Study of Existing Space

Assuming a steady growth rate, which, given the recent history of the CSS is

unlikely, the current space will fill-up as follows:

� 2% growth rate - (15- 20 people per year) - 2010

Staying at University Corporate Center is a good long-

term strategy for this growth rate.


Growth at this rate provides a perfect exit strategy for

leaving the space at the end of the original lease


New space will be required in 2002 - time to start

planning the relocation now.


Planning for new space should have begun already.

B. Key Findings

� Benchmarking has shown that the cost per person of the current facility

is extremely competitive due to the office lay-out, North Carolina

location, favorable lease terms and facility outsourcing approach to

operations

� If growth in the current facility can continue, cost per person will

decrease over time (this is the only option where this occurs).

� If growth beyond the capacity of the current space is anticipated, it is

recommended that BB&T be contacted about sub-leasing space and that

the landlord be contacted about a build-to-suit opportunity on the

current site.

� There are no blocks of appropriate lease space available in the Winston-

Salem Market.

� Significant growth (doubling the headcount) will require a build-to-suit

with long-term lease that will take a minimum of 2 years to plan and

build.

WORK



C. Summary Analysis of Scenarios

Scenario 1 Lease Additional Space at UCC

� Good strategy for low growth (2%) environment (less than 20 people per

year).

� For moderate growth (5%) environment, this is still a good strategy, but

would involve leasing additional space

� With this approach, total construction and operating cost savings versus

"build-to-suit" for 5% growth is a cash flow difference of $40MM over 15

years.

� If available, additional space can be leased and built-out in

approximately 9 months

Scenario 2 Lease Space in the Market place

� The Net Present Value of leasing and building out space in the market is

slightly more than leasing additional space at the University Corporate

Center. However, there is no appropriate space in the market and

physical separation between groups could be a productivity issue

working against this scenario.

� If available, space could be leased and built out in 11 months

� Determining the economic order quantity (how much) for lease space is

an issue. The area would vary depending upon which groups would be

located in a remote location.

Scenario 3 - Build to Suit

� Building would be similar to Sara Lee Headquarters (Assumption)

� This is the most expensive option - $96 MM cash flow for construction

and operations for a 5% growth rate for the next 15 years ($49 MM

NPPV)

� If an available site can be found, the building could be designed and

constructed over a 2 year period

� This scenario should be considered if the population is expected to

exceed 1,000 by 2003

� Determining the "economic order quantity" for space could be an issue

for this scenario. Larger buildings provide a lower construction cost per

square foot, but take longer to fill up. The vacant space incurs operating

costs while awaiting tenants, and the size of the facility should be

carefully studied to balance growth needs, operating concerns and

organizational efficiency.

Scenario 4 - Build to Suit combined with leasing existing space

� This option is slightly less expensive than option 3, build-to-suit. This is a

short-term "gap" strategy that will have to be studied when future

needs are know, because this scenario provides minimal savings over a

build to suit. This is because in the build-to-suit, operating costs are

incurred for vacant, built-out space while in this option, that cost is

roughly equal to the lease cost at University Corporate Center.



� Even though this option does not have a significant financial advantage

over build to suit, it should still be considered when building because it

provides organizational flexibility.



D. Exit Strategy

If the facility were abandoned tomorrow, the following costs would be

incurred.

Cost

� $0.8 MM - Expense to clear out the existing furniture

� $9.4 MM - Lease expense for the original space through 2003

� $4.7 MM - Lease expense for the 2nd floor through 2008

� Unknown - Write-off of remaining depreciation

Income

� $1.6 MM - Potential income from the sale of furniture



IV. Key 1998 Activities

Planning/ Change Management

� Developed a Strategic Facility Plan and Knowledge Base

� Moved 176 people with no delay to critical business functions

� Gave up the Temporary Lease on the 2nd Floor

� Leased 2nd Floor Space effective January 1, 1999.

Operations

� Developed Key facility measures, goals and scorecard

Data Center

� Provided 100% up-time

� Successfully tested Business Recovery Facility

� Successfully tested emergency power generators



V. Programs/ Strategies/ Recommendations

The objective of this section is to bring together all facility efforts

under a coordinated program that strengthens the facility's

contribution to corporate financial performance, enhances the

productivity of tenant organizations and builds a facility knowledge

base that will expedite future planning and change management

strategies.



1. Operating Cost Strategies/ Programs/ Recommendations

Strategy

Deliver cost-effective facility services by maintaining better than

average cost per person.

Programs

� "Right side up from day One" organizational approach included:

� Outsourcing all facility planning and management functions

� Small work stations that share internal circulation space with

aisles. This increases density, allowing more people to be

located in less space.

� In order to offset the small area allotted per person, the

following features are included in the space: abundant natural

light, above standard finishes in common spaces and

competitive employee amenities.

Recommendations

� Benchmark workstation sizes and employee amenities with similar

companies and facilities to ensure that the overall workplace is

competitive with the offering of other companies.

� Benchmark facility operating costs to determine opportunities to

improve operations or deliver more efficient services

Status

� Benchmarking workstations: questionnaires sent out Dec. 5.

Results by mid-January.

� Benchmarking facility operating costs - This is a continual process.

1998 analysis complete.



2. Project Cost Strategies/ Programs/ Recommendations

Strategy

Prudently manage project capital and expense to support corporate

financial objectives.

Programs

� Offset capital required for tenant interior construction with a

generous landlord tenant upfit allowance. This is paid back

through the lease and while it results in increased lease payments,

it offsets capital expenditures and stabilizes long-term cash flows.

Recommendations

� Continue to prudently manage build-out of 2nd floor using the

above stated program. Construction of space to proceed in 1999,

but furniture will be installed when required by staff growth or

organizations change.

Status

� 2nd floor lease signed. Construction to proceed in 1999.



3. Customer Service - Change Management Strategies/ Programs/ Recommendations

Strategy

Ensure moves, move planning and change management do not slow

down necessary business changes.

Programs

� Develop and maintain a facility plan that anticipates needs, tracks

performance and is communicated to appropriate personnel.

Recommendations

� Continue to maintain facility plan and knowledge base.

Status

� Plan developed in mid-1998. Updated twice since then.



4. Productivity - Asset Utilization Strategies/ Programs/ Recommendations

Strategy

Ensure that required seating capacity is provided to tenant

organizations while still maintaining maximum utilization of the facility

and allowing for future changes.

Programs

� Develop and maintain facility plan and continue a dialogue with

tenant organizations to ensure proactive communication of tenant

requirements.

Recommendations

� Develop "What-if" scenarios in the facility plan that answer major

questions about what will happen due to normal growth and

unanticipated major growth or contraction in space needs.

Status

� Scenario summary complete.



5. Productivity - Data Center Strategies/ Programs/ Recommendations

Strategy

Maintain 100% uptime service level for Data Center and technology

infrastructure

Programs

� Maintain a written Business Continuity Plan for the Data Center

� Test and maintain a back-up site for the Data Center

� Test and maintain emergency power generation capabilities

Recommendations

� Continue with current level of service



6. Productivity - Overall Workplace Strategies/ Programs/ Recommendations

Strategy

Maintain a workplace that continues to support tenant requirements

Programs

� Hire architectural, interiors and facility planning firms to continue

to complete architectural needs analysis prior to any facility

changes.

� Maintain Business Continuity Plan

Recommendations

� Continue with current program and level of service

WORK

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