In line with the corporation's vision of enabling employees to realize their full potential, the Corporate Real Estate (CRE) group strives to offer the highest level of productivity without increasing staffing size. José Oncina, general manager of global real estate and facilities, says careful planning and sound decision-making are critical to accomplishing this goal.

"I have 51 people in my group today and I would like to be able to serve Microsoft with the same number of employees, even if the corporation doubles in size," he says. "Conversely, I could do the same thing with half the number of people I now have if business growth stabilizes."

Oncina selects employees who are flexible enough to adapt to business changes that may require them to tackle new tasks on a regular basis. Helping employees reach their maximum potential means ensuring they are skilled in a variety of areas and can adjust their job duties to meet the corporation's changing vision.

Microsoft CRE manages 17.4 million sf of office space within 444 buildings in more than 300 locations worldwide. CRE, which consists of planning, real estate transaction, project delivery groups, and facilities management, manages about 341,000 sf per each of its 51 employees.

"Our vision is to allow Microsoft employees to realize their full potential, while growing the company's multiple business lines in multiple geographies," says Oncina.

A Center-Led Management Approach

CRE uses a management approach where its standards, policies, and processes are centralized, although the interaction with customers is done on a regional basis.

"We need to be close to the customers in order to plan properly and to make the right decisions," says Oncina. "A center-led organization means balancing the benefits of centralized leadership, objectives, strategy, and systems with local opportunities, practices, and needs."

Providing outside resources, processes, and policy standards helps CRE mitigate risks associated with real estate transactions. For example, if CRE wants to relocate in Warsaw, the group can reduce its risk by providing real estate selection and acquisition guidelines, standard leases, contracts, and design metrics to an on-site procurement manager, controller, or administrative representative who will handle the actual transaction. Conducting business activities in this manner affords CRE the luxury of keeping its 51 employees focused on other larger projects.

Oncina aligns his objectives for every transaction with the corporation's short- and long-term goals. CRE reports directly to Microsoft's financial organization to ensure projects are in sync when they are proposed to the chief executive officer. The chief finance officer, who is responsible for overseeing financial matters, administration, Information Technology, operations, and logistics, publishes the finance organization's objectives and reports them to the CEO. All of the objectives, including those formulated by the CFO, CEO, and corporate services organization, impact the goals that are established by Oncina.

The intertwined objectives show the cascading effect of all departments working together to provide uniform financial reporting, successful benchmarking by location, and a method to gauge future business opportunities.

The Importance of Planning

Microsoft's CRE approach is built around the concept that planning is key to the success of all objectives. CRE's planning, real estate transaction, and project delivery groups receive operations support from the business systems and facilities management divisions.

"Planning is the key to everything. How well you do a transaction, negotiate a deal, or design a building is important, but if you make a mistake in the planning, then everything else is meaningless," notes Oncina. "Where you save the big money is planning and that's where we spend our time because it's critical to the value that we provide to Microsoft."

Diligent planning helps CRE determine whether space is needed and when it is needed, and whether Microsoft should own or lease facilities. The planning is based on a standard set of objectives that include financial analysis of owning versus leasing, short- and long-term business options, location of property, the likelihood of mergers or acquisitions, proximity of integrated products, and the costs associated with the real estate, including maintenance, security, telecommunications, transportation, and employee retention.

"As a result of the business drivers and the integration between all of the Microsoft products, consolidation is key to the success of our corporation," says Oncina. "The closer we have our facilities, the better Microsoft runs and the less facilities are a roadblock. We try to manage by our objectives and this is a specific target for us."

Why Outsource?

CRE's planning often entails making a determination about whether to outsource certain services instead of doing them in-house. Services which Oncina believes should be done by Microsoft employees include those that are core to the company's business, involve confidential information, pertain to strategic and emerging opportunities, have a high risk of failure, or relate to personnel integration.

"The next question is whether the outsource partners can do what we need them to. One of the biggest challenges we have is the system and data integration among multiple vendors and partners," says Oncina. "Everybody is working from the same database and it's not just the systems issues; it's the firewall and security issues. That's a big concern that we're trying to work through. One of the solutions is adopting Microsoft's .Net products which facilitate sharing of secure information through XML-based Web services."

CRE's outsource model consists of a global real estate advisory group and the integration of all large U.S. campuses of 200,000 sf or more through unified facilities management. Most of the smaller sites are leased. Integrated facilities management and support services are provided for large U.S. sites that employ at least 500 people. Microsoft also offers centralized lease administration and project management systems with one call center. Integrated project management, move management, and furniture management systems are applied at the corporation's headquarters in Redmond, Wash.

In addition to the challenge of data integration, outsourcing also poses other potential problems. Maintaining the edge over competitors and retaining the best people on projects are areas that CRE continues to address.

"Key IT functions are core to our business so we wouldn't outsource those and we wouldn't outsource our strategy for determining our real estate needs," explains Oncina. "Cost is also a criterion. We plan about five years out from a real estate perspective and the value has to be greater than the cost to outsource a project."

On the other hand, outsourcing presents the opportunity to have a global reach with a local presence and the possibility of consolidating buys, as well as leveraging and scaling management, systems, facilities, and volume pricing.

CRE Objectives and Challenges

Oncina's group has developed a long list of objectives that coincide with the corporation's future plans. CRE goals call for globalization of real estate and facilities management functions with a standardized model for reporting, service delivery, and procurement.

Continuous fiscal improvement is also planned through workplace productivity and efficiency enhancement. CRE aims to decrease the square footage and cost per head without negatively impacting employee productivity, shipping dates, and revenue.

World-class procurement improvements involve consolidating and standardizing facilities management, processes, tools, and call centers for various Microsoft locations under one integrated service provider.

CRE also intends to invest in employee training and internal internships, according to Oncina, who cites education of the workforce as one of his group's most immediate goals. In addition, CRE is working to reduce the number of vendors and optimize the current vendor pool.

Promoting a self-help environment to optimize efficiency, eliminate redundancies, and maximize the full benefit of corporate resources is among CRE's short-term goals. This goal will be achieved, in part, through client-based tools, an Internet-based knowledge center featuring information helpful to project teams throughout the world, and intranet automated facilities request tools. By using such automated tools, administrators in Warsaw can conduct a move without requiring assistance from Oncina's staff.

Oncina sums up his philosophy for success and outlook for the future by vowing to have big goals and surrounding himself with people who believe in progress.

"Raise the bar for yourself, your team, and your partners," suggests Oncina. "Keep it simple and sweat the details. Don't wait for stability to make changes."

By Tracy Carbasho

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ISSN: 1096-4894