First Generation Outsourcing Tailored to Local Site Requirements
Capstan was retained by a major oil services firm to run two separate outsourcing initiatives, one for facilities and another for transactions, allowing the firm to achieve economies of scale, develop occupancy and operating strategies, leverage spend and build consistent practices across its decentralized operation.
The client’s real estate portfolio including a wide variety of oil drilling service facilities was managed largely on a site-by-site basis by business units. Previously efforts to centralize management had failed because they were perceived as too costly by local site leaders. A small corporate real estate and procurement team was charged with developing a portfolio strategy, standardizing transaction processes, and creating a repair and maintenance program to ensure assets were well maintained and costs were reduced over time.
How Capstan Helped
Capstan managed two sourcing processes for the client. First, a global real estate provider was selected and charged with developing real estate strategies and information so the portfolio could be managed centrally. We helped negotiate a contract that provided for a transaction management and strategy team to be funded through U.S. brokerage commissions, with a rebate and discount schedule reflective of the volume of business awarded.
Next, we helped create a unique FM management and engineering services model and contract that allowed the centralized team and local site managers to pick from a menu of services for each site. Service provider management fee were to be absorbed at the corporate level rather than being allocated to each site. Sites were to pay only for services selected, with flexibility to scale up or down based on their needs and business trends. The two FM providers selected were to conduct regular condition assessments at each location and report through a centralized system managed by one provider.
Benefits to the Client
The new dashboard reporting system allows the central team to monitor the performance of real estate and facilities and develop strategies and initiatives for both transactions and facilities maintenance. Local site managers receive only the facilities services that are required at their locations, allowing them to tightly control costs as the business environment, i.e. the price of oil, changes over time.