In 2013, the UK central government issued a recommendation for improving the efficiency of its real estate holdings. Intended for government buildings, it was also relevant to other sectors, including corporate offices, healthcare facilities and higher education campuses, writes Travis Kemp.
The Leaner and Greener Report called for reducing the size of individual workspaces, moving away from the one employee-one desk model, increasing space utilisation and charging departments for the space they used.
This approach stems from the idea of “sweating” assets – getting the absolute most out of every square foot to optimise return on investment. It intends to squeeze maximum productivity out of a defined space. Given that employees and real estate are huge cost centres, it was a logical strategy to reduce overhead and increase efficiency. They estimated that more effective space management could reduce space needed by 30% and save £7bn a year.
Define the office of the future
Fast forward eight years. Piling employees into the smallest productive space possible no longer makes sense. The pandemic has driven organisations to rethink the way they use their available space. Most are testing some combination of in-person, hybrid and remote work approaches. In turn, they are redefining the relationship between real estate, people and the bottom line.
Today, organisations must define real estate ROI differently than the UK government did in 2013. No more valuing real estate based on productivity per square foot. Instead, organisations must look at the relationship between broader, often competing interests.
Understand the relationship between KPIs
In the Covid context, the right real estate strategy considers how a space supports or restricts success in a few areas:
Employee productivity and collaboration
Health and safety, including personal space and sanitisation
Employee and space flexibility
Organisations can’t examine these metrics in a vacuum. A large, expensive space could be more valuable than a cheaper space, but without evaluating the full picture, it’s impossible to know that. That’s why understanding the relationship between KPIs is so important. Metrics to consider include:
Size vs running costs
Size vs utilisation
Headcount vs running costs
Lease information vs running costs
Understanding these relationships drives more value, but it’s tougher to determine the nature of their relationship. Layer in the fact that people are using space differently each day, and collecting and analysing all this data can get very complex.
Embrace portfolio-level analytics
So, how can a business make good decisions around its real estate portfolio in such a dynamic world? A simple three-step model works as a guide:
Create a culture that embraces data-backed decisions.
Maintain a variety of robust, near-real-time data sources.
Simplify data analysis to simplify decision making.
The first doesn’t take much explanation. If you want to make smarter decisions, relying on data needs to be part of the business DNA. The second requires using sensors and insights from business systems to reveal the relationship between people and space. And the third requires a single interface where those data feeds can integrate and relationships become easy to review and digest.
What kind of sensors and business systems work best for sourcing this data? Occupancy and environmental sensors are a baseline. Desk and meeting room booking solutions help reveal employee behaviour and space preferences. Visitor management solutions reveal how guests influence space usage, while also helping organisations enforce health and safety protocols.
These systems all deliver insights that tell part of the story. But to create an optimal office, it’s critical to evaluate them in context to one another. Doing so in one platform – under a single roof, so to speak – is the only way to understand how they influence each other. That’s why solutions with open APIs to each other are so valuable.
Make data-driven decisions
Business intelligence and analytics programs are no longer “nice to have” technologies. They have fast become essential for operating the post-coronavirus workplace. In most cases, that workplace embraces flexibility, both for physical space and a hybrid workforce. This new world of work requires the right tech tools to be successful.
Complete, modern analytics systems provide the data and insights organisations need to create the office of the future. They make it possible to make smart, data-backed decisions for both an ever-ready workplace and fast-changing workforce.
Ultimately, nobody knows what the office of the future is going to look like, or how long it will take to get there. What we do know is that defining it, creating it and adjusting it as the context changes will be much more efficient when backed by diverse factual data.
Travis Kemp is vice president of product management at FM:Systems