"The power of the Internet allows business to be run in a fundamentally different way from the past," says Paul Savastano, director of Sprint's Real Estate Technology Group. "This forces us to ask how we can transform our real estate group to better meet the needs of the core business."

The advent of new online tools such as scenario planning and portfolio management has created a wealth of opportunity for CRE to add value back to the corporation, according to Savastano.

"Many times the real estate function has the ability to see across all operating divisions of the enterprise," he says. "If you can roll up information about that function and present it in a format that plugs into the way leaders run the business, you can have a significant strategic impact."

Solid Technology Foundation

CRE built its early Web initiatives on a solid foundation. Between 1996 and 2000 Sprint made numerous tightly focused investments in its technology infrastructure. Along with implementing PeopleSoft's enterprise resource planning software, the company adopted a broad array of "point solutions"— applications targeted at specific functions— automate routine real estate operations, from lease administration and space planning to Web-based conference scheduling. Spending was carefully targeted to make sure that new systems could share information and communicate with each other across the enterprise— example, a CAFM program that links to the HR database.

"We didn't have the time for elaborate schemes," says Savastano. "We had to be smart about what we did, leveraging our investment with integrated applications to reduce data duplication and redundancy."

With the new integrated systems in place, CRE shifted its emphasis to prepare for moving all real estate applications online. One of the challenges it faced was the wide diversity of Sprint's major business thrusts: the traditional local area exchange that operates in a more regulated environment; the 20-year-old Global Markets Group encompassing long-distance and international Internet services; and the youthful, rapidly growing PCS Wireless unit.

Although space management functions were centralized in CRE, Savastano says it was like taking care of three different companies. Activities that were potentially common to each, such as lease negotiations, instead followed totally different procedures. The multiplicity of processes created the need for more standardization before moving ahead with broad-based collaborative Web tools.

Getting Mobilized

To make sure that its ultimate technology strategy would leverage the investments in hardware, software, and processes being made across the entire company, CRE moved into a new period of information-gathering, which Savastano describes as "getting mobilized." In late 2000 and early 2001, CRE teams visited high-tech and manufacturing companies within and outside the telecommunications industry to share and compare Web experiences and plans for new initiatives.

"My boss, CRE vice president Faye Manker, is very focused on internal and external collaboration," says Savastano. "We learned a lot by talking to others."

The information exchange also exposed CRE to the "Net Ready" concept exemplified by Cisco Systems (and detailed in the book of the same name authored by Amir Hartman, John Sifonis, and John Kador), which centers around four critical factors for Internet business success: leadership, governance, technology, and competencies.

"Net Ready provides a framework or methodology for discussing the types of organizational capabilities necessary to support the core business," Savastano explains. "It entails taking a hard inward look at your people, processes, and how you do business in light of what the overall company is trying to accomplish. It really challenges you to select the best activities to focus on to deliver people, workspace, and network solutions."

The analysis concluded that CRE was not Net Ready, Savastano says, but it also gave the group a good starting point for articulating goals and drawing up plans to reach them.

"We decided to focus on three areas: self-service, end-to-end project management— of silo project management— advanced planning."

Project eVolution

CRE's next step was securing a partner to help digest and apply its new learning while moving toward full online implementation. Selected in response to a formal request-for-proposal process, consulting firm Deloitte and Touche led the organization through strategy sessions designed to generate a roadmap to its goals while spelling out the costs and benefits of the program. These efforts, which took place from April to June 2001, constituted Phase 1.0 of Project eVolution.

One realization to come out of the meetings was that Phase 2.0 and full deployment, originally anticipated for July 2001, were not right around the corner after all. CRE determined that additional legwork was necessary to streamline internal processes, select and prioritize initiatives, and develop new metrics, including a balanced scorecard.

"In spite of all the technology we had deployed, we realized we still had a lot of work to do," Savastano observes.

The vast reach of the online format proved to be an especially important consideration.

"When you distribute information as broadly as the Internet allows, it's imperative that the data are not just accurate but also based on a common understanding," he explains. "Everyone has to speak the same language. Process and data elements need to be well defined."

As an example he cites the different ways categories like vacancy rates and square footage can be calculated or interpreted.

"Does square footage refer to net or gross?" he asks. "Does it include common areas and break rooms? When you talk about vacancy rates, are you talking about space that's occupied but assignable or vacant yet reserved? These specific topics are not necessarily what is under discussion right now, but they are examples of how we need a common vocabulary to make this work."

Phase 1.5

In order to resolve these issues, CRE inserted a new step in the project timeline, labeling the activities as Phase 1.5. Individual teams set to work on the following five areas identified as key components of the strategic vision:

• Information Management: timely and accurate information and intelligence for decision support.
• Streamlined Processes: planning/forecasting, self-service move/add/change and facilities services, project management/accounting/tracking.
• Initiative Prioritization and Selection: clear guidelines that ensure coordination of effort across CRE.
• Accountability Metrics: metrics that drive accountability, align operations, and support enterprise objectives.
• Organizational Alignment: for customer focus, communication, and efficient operations.

CRE also created a prioritization team to carefully evaluate all its technology initiatives to assure they dovetail with overall goals and make effective use of corporate resources.

"If it's not the kind of ruthless execution concept that Net Ready talks about, then we're going to deselect it," he says.

New Roles for IT and Finance

Project eVolution has derived a big boost from the presence of dedicated IT and finance functions within CRE. Finance personnel are actively engaged in the development of a balanced scorecard and the way portfolio management is conducted. CRE's IT group, veering out of its traditional role into enterprise resource management, is working hard to understand the business processes and what the owners of the processes need in terms of technology support.

One possibility Savastano raises is having an IT representative accompany CRE’s strategic planning group in meetings with business units as they flesh out their future needs.

"IT is going further upstream on the business process side," he says. "The real estate process person and the IT person can compare notes. By having a solutions dialogue, they could come up with a better idea than if their involvement were linear."

Gaining Influence

While the need for an intermediate step came as some surprise to Savastano, it turned out to be pivotal in achieving one of CRE's ultimate objectives: maximizing its business value to the corporation. By understanding high-level financial and management principles and expanding the scope of its knowledge, Savastano sees the organization making an even larger strategic contribution to the enterprise.

"Real estate decisions should be made within the context of larger business initiatives or efforts," Savastano says. "It is not enough to be team players, productive or proficient. We must be influential to be part of the decision. Influence comes from the strength of our ideas, the credibility of our implementation plans, and our ability to speak the language of the business."

Lessons Learned

At the end of 2001, CRE was in the process of drafting the request for proposal for Phase 2.0, which will facilitate the implementation process and technology changes required to support the eVolution vision of end-to-end processes, an integrated technology model, and focus on client relationship management processes. The Phase 2.0 consulting partner has recently completed an eight-week validation phase resulting in an implementation plan. However, instead of aiming for a single launch date on which to unveil a complete online system, CRE will be releasing functionality in increments, in accordance with the Net-Ready tenet of producing a tangible benefit or sign of progress every 90 days.

"We will break the program down into iterative releases instead of waiting for a huge event," says Savastano.

Implementation of Phase 2.0 is expected to begin in early August.

With CRE's new cross-functional teams now involved in a change management communication process, Savastano is confident that the Phase 1.5 activities will help the group become the desired service provider for all Sprint real property and achieve a larger strategic impact on the corporation.

Among the major lessons learned throughout the project, he notes the importance of leadership, communication, partnering, and investing in the future. He also recommends standardizing key processes and establishing enterprise linkage. One of the most critical issues was knowing what business CRE was in and what business it wanted to be in.

"First and foremost, you must define the organization vision, strategy, and business model," he concludes.

By Nicole Stahl

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ISSN: 1096-4894