CRE is one of the largest expenses for many companies, so a firm’s sourcing strategy is a key area for change and potential cost reductions.
Sourcing Strategy
Sourcing Strategies vary based on many factors specific to the client but we typically see firms starting from one of the three perspectives below.
- First Generation “Bundling Our Spend” -Companies that have sizeable internal staffs doing tactical delivery of services or who manage those services using a large number of out-tasked vendors for delivery
- Second Generation “Moving to Integrated Services” – Companies that have successfully outsourced some functions and who plan to outsource more services to an integrated provider.
- Third Generation “Global Outsourcing, with Limits” – Companies that are successfully outsourced in some functions globally but believe in keeping things competitive by using multiple provider.
Capstan helps CRE leaders define critical factors for success and determine the best sourcing strategy for the services they deliver to their enterprise.
Key sourcing strategy elements include:
- Tasks to be handled by CRE staff, internal stakeholders or third-party providers
- Location for process delivery (local on-site, regionally, center of excellence, etc.)
- Process for assigning work to internal staff vs. contractors
- Approval limits and controls.
- Coordination of hand-offs throughout the process
An aerospace company was on its third-generation outsourcing agreement with a single provider for transactions and lease administration. Capstan advised the client to structure an RFP with two regions and make clear to bidders that a two-provider solution was acceptable. Ultimately one provider was selected to manage the western US plus Asia, and another provider won the eastern US plus Europe. In addition, the client required the firms to solicit three bids on all non-US transactions in order to satisfy business unit leaders that the company was getting the best pricing around the globe.
