"We have more seats than employees," says Will Esterly, the company's North American Real Estate Manager. "The fundamental challenge is to achieve an occupancy rate of 98 percent by 2008, with enough flexibility to account for churn.

"Our first goal is to meet the needs of the business and our employees," he adds. "The second goal is to maximize the efficiency of the real estate, which will ideally reduce costs."

The company began working toward that goal four or five years ago by desk sharing among hoteling and flex-time employees. Occupancy rates rose above 100 percent in some groups.

"P&G has been looking at occupancy rates for a number of years," says Esterly. "It's something we specifically looked at when we considered a facilities management service provider. In September 2003, we began addressing it on a global scale when Jones Lang LaSalle was brought on board."

Jones Lang LaSalle was assigned two critical performance indicators: occupancy rate and data integrity. Reliable data not only increases the efficiency of current real estate use, but it also adds integrity to space-use charge-backs and allows for better future planning.

"Better data leads to better planning, which ultimately leads to reduced cost," says Esterly.

Why is this so key at P&G? A driving company business goal is to maximize efficiency so that P&G can continue to deliver superior brands at superior, competitive value. Real estate is a significant cost factor.

Staffing Structure and Methodology Yield Accurate Data

Jones Lang LaSalle has established a seven-person centralized team to manage data integrity globally: a space allocation administrator, two CAD operators, and four occupancy planners, three regional and one global. In reality, the team totals about four full-time equivalents, because the occupancy planners also shoulder many other responsibilities outside managing data integrity, explains Curtis Knapp, senior vice president of Jones Lang LaSalle.

"We decentralized data collection and maintenance," says Knapp. "That gave us more accurate information in a timely manner."

Key in the process are the 130 to 140 site contacts that Jones Lang LaSalle put in place. They are responsible for collecting and maintaining occupancy data; correcting data errors; validating building information; and answering customer questions regarding space allocation.

"Before Jones Lang LaSalle was involved, space forecasts were updated every three to five years instead of semiannually. We also didn't apply charge-backs to the business units consistently on a global scale," he says. "Charge-backs became a new line item on all business units' financial statements, and the site contacts are on the front line to explain those costs."

Jones Lang LaSalle also instituted a strict system of checking the integrity of data, and making employees at all levels directly responsible for its accuracy. Each month, Jones Lang LaSalle runs an automated routine akin to balancing a checkbook. These reports highlight conflicting data, such as the use of invalid cost centers, non-assigned rooms that erroneously have been assigned to a cost center, and rooms lacking an assigned category and/or type. The process is all automated, so not catching the mistakes is like using a word processing spelling checker, then ignoring the misspelled words.

The site contact inputs data into the database, and the space allocation administrator prints the report from it. Inconsistencies in the report are sent back to the site contact, and that person has five days to correct them. If they make all the corrections, they receive a score of 100 percent.

Quarterly facility audits, like reconciling a checkbook, compare the reports with first-hand information collected during site visits to see if the reality matches what's in the database. These audits examine a sample of perhaps one floor within a building, including both polyline sites and non-polyline sites.

Polyline sites are outlined on AutoCAD drawings and have attributes assigned to them showing room category and type, assigned employee and cost center, and room area. Non-polyline sites show only the space capacity, total supported population, and a list of cost centers.

Each quarter, the accuracy of the data is scored, with the quality assurance reports worth 70 percent of the score and the facility audits worth only 30 percent. Knapp says the imbalance in the scoring provides an incentive for site contacts to take data integrity seriously: The data they directly control—and have an opportunity to correct—is worth more than the data verified during an audit. The final score is linked to their performance evaluation.

Site contacts are transitioning from being P&G employees to being Jones Lang LaSalle employees, which is new to them. These tasks are novel parts of their job which require a lot of training.

"The goal on their performance evaluation in FY2005 was to achieve a score of at least 90 for the year for their site," says Knapp. "That's the same goal for everyone up the line, from the site contact to their supervisor (the site manager), to their supervisor (the regional manager). Everyone is responsible; there's no passing the buck."

Each year the goal increases; therefore in FY2006 the site contacts must score a minimum of 94.

Because P&G is growing rapidly around the globe, this data is proving very useful for planning and cost projections

"The unique thing about this approach is making site managers responsible for the data," says Knapp. "We hadn't done it before with this level of sophistication. We put a structure around a process we had implemented at a smaller company."

"I believe this measuring of data quality is revolutionary," adds Esterly.

Database Applications Streamline Process

P&G uses an integrated system of Web-based tools to collect, store, and share data for space allocation and occupancy planning.

"The backbone of our system is comprised of ARCHIBUS and AutoCAD," says Esterly.

AutoCAD contains drawings of major P&G facilities, and ARCHIBUS extracts information about those facilities in a usable form. Those two programs are bundled together to create the primary database. FAST, a Web-enabled input and reporting component supplied by Computerized Facilities Integration, uses the database information to create standardized reports on people, seats, and cost centers. REflex, another database, contains information about all of P&G's leased properties; location information from that data feeds into ARCHIBUS. Information from all of these sources is combined in ARCHIBUS and used by the space allocation manager to assign charge-backs for each cost center. It is also used for planning purposes to determine future space needs.

P&G is in the process of installing another program—MAC-O, or "Move Add Change-Occupancy Planning"—which Jones Lang LaSalle developed to make it easier for the person in the field to input data about moves.

"It is extremely data-intense when we move someone," says Esterly. "MAC-O standardizes the move process, requiring fewer clicks. It also can be used as a planning tool."

These are all off-the-shelf programs, but P&G modified FAST to make it a two-way application allowing managers of smaller sites to input data directly, rather than only viewing reports.

The Learning Curve

The personnel structure offers the unique benefit of providing real-time data, which is a great improvement over the former situation.

"It literally used to take six months to get a data report, and it was outdated by then," says Esterly. "Some of our locations have been doing this for years, but others took an annual snapshot, and that was the cost for the year. Monthly billing is new for most locations."

The real-time nature of the data lends the most credibility to the process, but some people have had a hard time getting used to it.

"We were flooded by questions from people who didn't trust the data," says Esterly. "In a meeting one person might say the occupancy rate at the Cincinnati headquarters is xx percent and someone else says it's yy percent. Now, we can generate the real time number with confidence saying what it is on that day."

But it was hard for senior managers to believe the numbers, because they had no idea how dynamic occupancy figures are.

"The reality is, the number changes every day," says Esterly. "We open, close, and move locations somewhere in the world on average once a week."

One of the largest challenges is the Finance and Accounting community's desire for consistent and predictable numbers. With a constantly changing business environment, this is very difficult to achieve at a very detailed level. Esterly concedes that he and Knapp must be proactive in communicating and managing expectations to minimize frustration.

"This information has helped us tremendously because it lets us avoid taking on new space when we may not need to," says Esterly. "We were able to demonstrate to a business unit how consolidating to one location would save $4 million a year. Another group would save $2.5 million a year, and the move would allow the company to sell an under-utilized building."

By Lisa Wesel