Opportunity for CRE in Singapore to be at the heart of business transformation

There has been a significant increase in demand, both in volume and quality levels of CRE, in order to deliver competitive advantage to organisations.

How many CRE teams in Singapore really see themselves as able to give their organization flexibility and speed? And yet, Asia has seen a rapid economic recovery from the wider global downturn necessitating the need for rapid adaptation. It has caused many organizations in Singapore to quickly redeploy talent from European and US markets. Consequently, we have seen a significant increase in demand, both in volume and quality levels of CRE, in order to deliver competitive advantage to these organizations by being first to respond to market opportunity whilst doing it efficiently.

Three key features of CRE teams stand out in terms of their ability to respond and add value in these circumstances: An experienced and adaptable CRE organization, a smart workplace model and well constructed supply chain contracts.

Adaptive CRE Organizations

Organizations recognizing that speed to market is a core part of their CRE offer and have a number of key characteristics:
• Innovation - Those organizations have created forums or environments for innovation internally, not only with their partners and suppliers but also with various industry associations. They then understand what the others have done in similar circumstances and can apply this insight to their own environment and challenges. For example, Deutsche Bank’s team has moved strategically to create an empowered team with innovation embedded into all aspects of CRE, both in the retained organization as well as within the supply chain.

• Optioneering - it is a reality of life that no organization is infinitely flexible or is able to move instantaneously to a different position. As a consequence, organizations in Singapore that can rapidly respond to change have often done two things: they have established standardized processes that can then be repeated without a need for reengineering, and they have also created strategic ‘what if?’ options that consider how their CRE organization and portfolio interests might move if certain strategic activities were to occur.

The ability of the CRE team to have a positive influence on the speed with which an organization responds to change in corporate or market environments is directly correlated to how valuable it is seen to be within that organization. One Financial Services organization had a “cool box” in which it kept five different strategic scenarios that could be triggered under certain circumstances. All of the scenarios were updated regularly and enabled the team to respond quickly. The scenarios covered more than 80% of situations, meaning that quality thinking could be put into the additional 20%.

Smart Workplace Models

High performing organizations in Singapore are increasingly characterized by decreasing cycle times for change and an increased requirement for agility to anticipate and meet client needs. Historically, the workplace had been seen as a key constraint and cost centre for this requirement.

The implementation of optimized workplace solutions, modeled around the drivers of an organization’s vision, strategy and business plan provide flexible solutions that allow occupiers to respond to market demands significantly faster than their competitors - without paying a premium for doing so.

CRE teams that focus on integrating Information Communications and Technology and that enable extensive use of technology in the workplace together with linking workplace design to business process optimization and a target operating model are the key to delivering high-impact results in Singapore.

Advanced Supply Chain Contracts and Relationships

Speed and flexibility may come at a significant price unless CRE teams choose a form of contract to deliver a solution that is robust enough to provide adequate balance of risk and opportunity and most importantly performance.

Many organizations in Singapore are now implementing innovative approaches to relationships, which include the use of the Competitive Dialogue Procedure first created by the Office of Government Commerce (OGC) and now being used by organizations like Deutsche Bank. It has been found that using this process can deliver a true fit between partners from the supply chain when it is combined with sufficient dialogue to ensure that all parties understand the true scope and requirements of complex engagements.

Speed may also dictate consideration of innovative procurement strategies, while flexibility demands vigorous change control procedures for effective project management. The introduction of target cost contracts with a pain-gain share mechanism can incentivize performance and innovation from the supply chain.

A user-friendly audit trail to monitor change control is a prerequisite of best practices in modern day project management. This allows timely informed decisions to be made to avoid or minimize the impact of change orders. The right contract catering for those needs will provide the right setting for collaborative effort to deliver the CRE solution required.
 

Jonathan Berney, Head of Client Solutions, Asia at EC Harris