S21 - PwC - final sent back to presenters

April 2014

Martin W. O’Connor – Director, ProcurementHelen Salov – Manager, Procurement

“Saddling Up: Moving Beyond Transactional Processes to Harness the Strategic Value of Partnerships”

www.pwc.com

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Agenda

About PwCPolling QuestionsCase Study Critical Success FactorsKey Take Away’s

April 2014“Saddling Up: Moving Beyond Transactional Processes to Harness the Strategic Value of Partnerships”.

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About PwC

PwC US helps organizations and individuals create the value they are looking for. We are a member of the PwC network of firms in 158 countries with more than 180,000 people. We are committed to delivering quality in assurance, tax and advisory services. Tell us what matters to you and find out more by visiting us at www.pwc.com/US.

Learn more about PwC by following us online: @PwC_LLP, YouTube, LinkedIn, Facebook and Google +.


http://www.pwc.com/US

https://twitter.com/PwC_LLP

http://www.youtube.com/PwC

http://www.linkedin.com/company/pwc

https://www.facebook.com/pwcfanpage

https://plus.google.com/u/0/100980668534684158363/posts

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Polling Question 1

What type of transactional Facilities and Office Services does your organization outsource today?• Facilities Management Services• Real Estate Brokerage• Project Management• Hospitality• Records Management• Catering and Food Services


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Polling Question 2

How does your organization manage the supplier relationships in Polling Question 1?• Governance framework• KPI’s/SLA, fees at stake• Periodic business reviews• Management by exception• Wing it


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“When you collaborate on something that is fundamentally creative, you get to places that you would never get to on your own.”

- Comic icon John Cleese


The Power of Strategic Partnerships

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Case Study - White Paper Objective

Redesign transactional Office Services and Records Management model - by leveraging industry leaders with innovative solutions.• Leverage best in-class service providers to gain increased

subject matter expertise, scalability, and advanced technologies

• Achieve greater agility in our operations model• Capitalize on the real estate redesign to improve occupancy

and facilities management services• Increase customer productivity by delivering a higher

quality customer experience• Further reduce risk related to physical information

protection and client confidentiality

7April 2014“Saddling Up: Moving Beyond Transactional Processes to Harness the Strategic Value of Partnerships”.

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Service Bundles for Office Services and Records ManagementDocument & Records Management Facilities Maintenance • Reprographics (incl. tax processing in medium & large offices)

& binding• Printer fleet management• Convenience print• Mail—USPS & accountable• Courier/messenger services• Office supplies & stationery• Records management & archiving – Records Center management• Digitizing records• Document destruction• Large print, print on demand

• Furniture & fixture maintenance (proactive & reactive)• Supplemental cleaning• Recycling & waste management coordination• HVAC• Painting & handyman services• Parking maintenance• Internal signage maintenance• Physical security/security maintenance• Mechanical & electrical• Locksmith services• Life safety

Welcome Program & Occupancy Services Leadership & Management • Customer relationship focused • Reception• Switchboard• Hoteling support (system admin, change management, policy

enforcement)• IPP – Information Protection Principles (clear desk policy)• Floor Hosts• Visitor management & security badging• Storage & hoteling locker allocations• Room configurations• Collaboration space maintenance• Meeting room management & support – catering services on

request• Local directory maintenance• AV coordination

• Crisis management, business continuity and security operations• Building management and landlord relationship management• Purchasing• Ergonomics assessment• Oversight of local operations• Supplier integration and management• Budget creation and adherence• Local occupancy strategy• Space /occupancy management• AP Invoice Payment Review• MAC• Real Estate projects & office moves

Catering & Food Services• Canteen management • Cafes and catering


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Outsourcing Drivers

• Non-Core• No in-house expertise• Marketplace expertise• Tactical vs. Strategic• Scalability to allow for business cycles• Day-to-Day service delivery• Advancement opportunities for staff• Service delivery improvement• Improve internal customer satisfaction


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Approach Understanding

the market(innovation,

capability, fit)

current service partners

competitors

PwC business requirements

best practice innovation and

adaptabilitybusiness

requirementsvision

future directionvoice of customerour competitors

Benefits vs. risks

current costsservice risks

benefit/opportunitiescost of changeevaluation of alternativescompliance/regulation

• Cross functional team focused on managing costs and risks and documenting business requirements

• RFI process to understand market trends and the service provider capabilities

• Design and implementation of new OS and RM service delivery model


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Benefits of Outsourcing to a Strategic Partner

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• Create strategic relationships to drive continuous improvement/ innovation for shared benefits

• Provide a streamlined, flexible, scalable delivery model• Drive consistency in service delivery• Reduce costs• Utilize technology to improve data and reporting• Allows retained staff to focus on core strategic activities• Utilize best in class providers, leading practices• Expand the career path for OS/FM professionals• Advancement opportunities for outsourced staff

“Saddling Up: Moving Beyond Transactional Processes to Harness the Strategic Value of Partnerships”.

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Possible Risks of Outsourcing

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• Loss of knowledge/control over business processes• Difficult to bring back in house• Risk of confidentiality• Staff turnover• Service provider financial performance/mergers• Disputes/litigation


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Supplier Selection ProcessThe Art of Sourcing• RFI/Problem Statement - White Paper

- Structured as a problem statement so as to understand the level of innovation in the responses and leverage it into our final solution

- RFI supplier list compiled -- ~35 potential partners identified

• Resources used to identify potential service partners:- Previous bidders, referrals, and clients- Sourcing Interests Group (SIG)- Institute of Supply Chain Management (ISM)- Building Owners and Managers Association (BOMA)- International Association of Outsourcing Professionals

(IAOP)April 2014“Saddling Up: Moving Beyond Transactional Processes to Harness the Strategic Value of Partnerships”.

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Supplier Selection Process

• Collaborative Supplier Working Sessions - Critical to moving beyond transactional model - Hold design workshops with short listed providers- Engagement from day one- Both parties take ownership in the creation of a

successful solution- Understand what it is like to work with each service

provider- Taste of culture and methodology- Quality of people delivering the services is key


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The review team, including various Service Owners, engaged with35 suppliers. • Top supplier questions were:

- “What are the next steps?”- “When do the current contracts expire?”

• A few queried PwC’s “pain points” but most failed to take the opportunity to learn more about PwC and some struggled to relate to PwC’s business needs.

• Many suppliers told us what they thought we wanted to hear.

• Most missed the key goals of the white paper and simply moved back to the transactional model.

Understanding the Market


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• Suppliers (unsurprisingly) tended to accentuate their own strengths in their own market analysis, including promoting non-core services.

• There were no ground-breaking bundle combinations as compared to the bundles PwC had developed.

• PwC model of breaking out the soft services (i.e., hospitality) appears to be market-leading.

Understanding the Market


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Approach

Proposal

Benefits vs.

costs

PwC business require-ments

Understanding the

market

Phase 1 - RFI Phase 2 - Working Session

Phase 3 - Implementatio

n

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PwCrequirements

Supplier capabilities

Service delivery model

PwC / Supplier – One team


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Implementation Options

• Design & Develop as One - Immediately takes over existing operations while redesigning workplace experience and service architecture with PwC and later implements a second soft transition to new paradigm.

- OR –

• Big Bang Effect - Is engaged to work through discovery and design up front and then proposes a service architecture and cost that is measured against current baseline spend to satisfy procurement objectives before taking over workplace experience delivery.


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Elements of a Successful Implementation

• Start to build relationship before the contract is signed• Detailed, agile transition plan - break into phases• Focus just as much time on building the relationship as you

do on the contract, KPI’s, etc … (in-person contact)• Spend time outside the office … set dinners, luncheons,

social events to ensure your cultures align and you are both working towards the same goals

• Communication, communication, communication - before, during and after the contract is signed!!!!


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Elements of a Successful Partnership

• Transparent, expect and embrace challenges together, real-time feedback that is mutual

• Focus on areas of mutual benefit• Work in collaboration with the partner to design the core

elements of the delivery model• Joint focus on year-over-year efficiency, willingness to

change scope over time• Clarity in roles/responsibilities • Forward looking communication• Above all, working together seamlessly beyond service

boundaries and despite ongoing change


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Key Take Away - to Issues to Adoption

Breaking old habits – focus on fundamental change• Change selection process

- Move away from traditional RFP - White Paper or Problem statement - Test and Re-test for understanding

• Focus beyond cost savings (quality, competitive advantage, and people experience)

• Build a trust-based relationship from day one• Eliminate supplier bashing, share success• Culture change to joint problem solving from casting blame• Celebrate the small successes, focus on the big goals


Thank you

This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, PricewaterhouseCoopers LLP, its members, employees and agents do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.

© 2013 PricewaterhouseCoopers LLP. All rights reserved. In this document, “PwC” refers to PricewaterhouseCoopers LLP which is a member firm of PricewaterhouseCoopers International Limited, each member firm of which is a separate legal entity.

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Presenter Contact Information

Martin W. O’Connor – Director, Procurement [email protected](203) 539-3476

Helen Salov – Manager, [email protected](203) 539-3470


mailto:[email protected]

mailto:[email protected]

S21 - PwC - final sent back to presenters

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