Outsourcing Services to C&W Results in Major Cost Savings
Grontmij is the third-largest engineering consultancy in Europe, with approximately 10,000 professionals in almost 300 offices across the region and 50 offices globally.
Following a long period of rapid merger and acquisition activity, Grontmij made a corporate decision to engage Cushman & Wakefield to help rationalize its property portfolio and identify cost savings. Grontmij had no centrally held real estate data or processes in place, nor a Corporate Real Estate team to manage this area. Before engaging Cushman & Wakefield, local businesses managed Grontmij’s real estate strategy on an ad-hoc and local basis.
With a new focus on cost reduction, central oversight of real estate matters, and cost-reduction targets required by the executive board, Cushman & Wakefield was engaged to deliver in the third quarter of 2011.
Cushman & Wakefield first supported the Grontmij project team, gathering the international real estate data required to create a portfolio overview. Then, an in-depth portfolio analysis and benchmarking exercise identified savings opportunities, and established space metric and cost reduction targets. The analysis identified a potential €3.5 million in annual savings. Our firm’s international broker network widely supported the Cushman & Wakefield account team to complete the analysis.
Cushman & Wakefield also created a bespoke FUSION site for Grontmij to include a database, transaction process toolbox, project folders, and Work-in-Progress schedule. Grontmij can access this site 24/7 by an Internet connection and is regularly updated by our account team.
To meet the aggressive cost-reduction targets set by Grontmij, the account team provides an important Transaction Management and central reporting function. A dashboard report, created specifically for Grontmij, shows portfolio metrics, and progress is updated quarterly and circulated to all country management teams within the business.
To date, Cushman & Wakefield has completed a consolidation project in Sweden, a lease renegotiation project in the Netherlands, and two lease renegotiations in Denmark. Furthermore, there are 14 projects either ongoing or in the pipeline. Savings achieved have been approximately €235,000 per annum or €990,000 over the lease term, and we are progressing steadily towards the 30% cost reduction target by 2015.
Additionally, Grontmij now has access to a comprehensive database showing headcount, square-meters-per-headcount, and cost-per-headcount to drive new space metrics. This will take time to achieve as it requires a company culture shift, but we have seen positive results in the UK, achieving a 12 sq m average per headcount.
With a clear portfolio overview and its associated costs, Grontmij’s Executive Board has embraced the need for greater central control, and appointed an internal Program Manager to support Cushman & Wakefield’s activities with local businesses.