Customer Service Center

Transcription

1 Facility Status B u d g e t, S i t e a n d F a c i l i t i e s O r g a n i z a t i o n O v e r v i e w F a c i l i t i e s S c o r e c a r d F a c i l i t y P l a n - S i t e P l a n, V i s i o n, M i s s i o n a n d S c e n a r i o S u m m a r y K e y A c t i v i t i e s S t r a t e g i e s, P r o g r a m s a n d R e c o m m e n d a t i o n s 2016 Labarre Associates, Inc.

2 F a c i l i t y P l a n, S t r a t e g i e s, P r o g r a m s a n d R e c o m m e n d a t i o n s Prepared by: Barry Lynch, NCARB, MBA, CFM, IFMA Fellow Labarre Associates, Inc Rushing Rd. East Denham Springs, LA (225) blynch@labarre-inc.com 2016 Labarre Associates, Inc. 2 of 25

3 Part I. Budget, Site and Facilities Organization Overview 2016 Labarre Associates, Inc. 3 of 25

4 1. CSC Budget Overview Total Cost of Facilities Winston-Salem NC Lease Cost 1,875,948 2,290,172 2,290,172 2,290,172 2,326,829 2,326, Operations Cost 1,204,625 1,198,840 1,227,782 1,253,472 1,279,932 1,307, Capital 0 2,800, , Depreciation 1,649,768 1,698,000 1,838,000 1,978,000 2,018,000 2,058, Total 4,730,341 7,987,012 5,355,954 6,321,644 5,624,761 5,692,016 CSC 1998 Actual Budget 35% 40% 0% 25% Lease Cost Operations Cost Capital Depreciation 2016 Labarre Associates, Inc. 4 of 25

5 2. Key Cost Measures Total Facilities Cost per Sq. Ft. $50.00 $45.00 $40.00 $35.00 $/sq. ft. $30.00 $25.00 $20.00 $15.00 $10.00 $5.00 $ Office Total IFMA Benchmark* Facilities Cost per Person $12,000 $10,000 $8,000 $/person $6,000 $4,000 $2,000 $ Office Total IFMA Benchmark* CSC Total Cost of Facilities 8,000,000 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000, Lease Cost Operations Cost Capital Depreciation 2016 Labarre Associates, Inc. 5 of 25

6 3. Site and Building Overview Stacking Plan 5 AON AON 4 Pepsi-Cola BB&T 3 Pepsi-Cola BB&T 2 Pepsi-Cola AON 2nd Floor lease Starts Jan. 1, Pepsi-Cola Building Office/ Lobby/ Cafeteria AON Reynolds Carolina Credit Union C Pepsi-Cola Lobby/ Auditorium/ Common Corridors Parking BB&T Lobby Dock Pepsi-Cola Fitness Center LOBBY LOBBY LOBBY SECTION A SECTION B SECTION C UNIVERSITY CORPORATE CENTER RENTABLE AREA Vacant Pepsi-Cola AON RCFCU BB&T Total Key , , ,705 49,695 80,400 Building Common Space ,845 40,555 80, ,657 40, ,487 Vacant Space 1 34,758 18,582 1, ,811 C 11,559 20,946 10,519 43,024 Pepsi-Cola N O TE 11, , ,290 1, , , Pepsi-Cola 2nd Floor Space - lease to commence in January 1999 AON Corporation 2. Pepsi-Cola 5th Floor Option space given up in July 1998 to AON Corp. BB&T LOT G 3. All non-pepsi areas are estimated Reynolds Carolina Federal Credit Union August, 1998 Site Plan C Reynolds Blvd. B A Concourse Entrance 1 st Floor Entrance LOT E Parking Parking LOT A LOT B LOT C LOT D Assigned Parking LOT PEPSI A 0 B 0 C 110* D 185 E 144 SUBTOTAL 439 Unlimited parking in Lots "F" & "G" LOT F LOT G 2016 Labarre Associates, Inc. 6 of 25

7 4. Key Facility Facts Built in 1978, University Corporate Center is a 525,000 (Gross), 400,000 (Rentable) Class A office building that is the Former RJRNabisco Corporate Headquarters. The building is owned by Wake Forest University and is currently for sale. Amenities include: cafeteria, indoor executive parking, 400 seat auditorium, spacious lobbies, multi-bay loading dock CSC Leases 162,909 square feet of space on the concourse level and floors 1, 2, 3 and 4 of the A (east) portion of the building. There are a total of 1,701 parking spaces available, with 854 assigned. Office space operates 14 x 5 (14 hours per day, 5 days per week) Data Center operates 24 x 365 (24 hours per day, 365 days per year) Key Tenant Organizations include: IT - Information Technology TELSEL Accounts Receivable Support Total Seated Population varies on almost a daily basis and is currently 727. Build-out of the recently leased 2 nd floor space will increase seating capacity by approximately Labarre Associates, Inc. 7 of 25

8 5. Facility Department Organization The CSC facilities department relies on an outsourcing service delivery strategy. The in-house staff consists of a facility manager, an administrative assistant and a maintenance coordinator. When the CSC was started, it was expected that the main focus of the facilities department would be supporting the Data Center. While this is still a primary responsibility, organizational change has been a constant, and supporting staff reorganizations and moves has become a major part of the facilities department work. External vendors and a contract project manager provide support for moves and renovations. Maint. Coord. CSC STAFF Facility Admin. Facility Manager External Vendors Contract Project Manager 2016 Labarre Associates, Inc. 8 of 25

9 Part II. Facilities Scorecard 2016 Labarre Associates, Inc. 9 of 25

10 1. Overview and Goals of the Scorecard Facilities provide the infrastructure (place and technology) for business. Without them, the business could not function. Key Facility goals include: Cash Flow/ Cost Management/ Asset Utilization Keep Facility Operating cost per person below average Prudently manage project capital and expense to support corporate financial objectives Customer Service Ensure that moves, move planning and change management do not slow down necessary business changes. Develop and maintain a Facility Plan that anticipates needs, tracks performance is communicated to appropriate personnel. Maintain a written Business Continuity Plan for the Data Center Test and maintain a back-up site for the Data Center Test and maintain emergency power generation capabilities Productivity Ensure that required seating capacity is provided to tenant organizations while still maintaining maximum utilization of the facility and allowing for future changes. Maintain 100% uptime for the Data Center and technology infrastructure. Maintain a workplace that supports tenant requirements 2016 Labarre Associates, Inc. 10 of 25

11 2. Scorecard CSC FACILITIES DEPARTMENT SCORECARD March 1, 1999 Facilities provide the infrastructure (place and technology) for business. Without them, the business could not function. Key Facility Management and Planning measures include: Cost Management - Effective cost management of the facility infrastructure frees up cash to invest in, and grow the business. Customer Service - Change management, (move planning and execution), should not hold up core business change. Effective facility planning ensures on-going facility support for changing business requirements as does best practice management of the computer center. Deficient facility planning could jeopardizes future growth and quick response to changing business needs. Productivity - efficient use of the facility is one indicator of the effectiveness of facility planning and on-going change management. If the Computer center crashes or does not support business processes, financial and service targets could be missed. Cost Management/ Fixed Asset Utilization CSC Total Cost of Facilitie s T o ta l F a c ilitie s C o s t p e r S q. F t. Facilities Cost per Person 8,0 0 0,0 0 0 $ $ $12,000 7,0 0 0,0 0 0 $ $10,000 6,0 0 0, ,0 0 0, ,0 0 0, ,0 0 0, ,0 0 0,0 0 0 $/sq. ft. $ $ $ $ $ $ $/person $8,000 $6,000 $4,000 1,0 0 0, $ 5.00 $ $2,000 $ Lease Cost Operations C ost Capital D epreciation O ffic e To tal IF M A B e n c h m a rk * Office Total IFMA Benchmark* Change Management It is essential that facility moves and relocations "stay off the critical path" of all CSC change efforts. Performance includes: * 47 (or?) Individual Moves - accomplished per plan * 3 (or? ) Team moves - accomplished per plan * 1 (or?) Reorganization - accomplished per plan Customer Service Facility Planning Good planning requires anticipation, not reaction to business needs. The following "best practices are in place at the CSC to ensure that facilities continue to support business objectives: * Site Mission and Plan - in place and communicated * Planning Horizon - Site plan looks beyond site saturation - includes market value analysis, exit strategies, time frame of more than 10 years * Anticipation - next projects anticipated and & action plan developed * Facilities Performance - tracking of facility utilization and effectiveness Business Continuity Management Effective Business Continuity Management requires training, testing and coordination with business units, facilities functions and Information Technology. "Best Practices" in place include: * Written business continuity plan * Successful test of back-up site * Successful test of emergency power generators Productivity 1,0 00 Occupancy - Capacity vs. Required % C OM P UT E R CE NT E R Percent Uptim e 1 00 % U p tim e % % % % % P P P P P P P P P P P P % 94 - P P P P P P P P P P P P10 Capacity Requ ired Percent Uptime 2016 Labarre Associates, Inc. 11 of 25

12 III. Facility Plan Executive Summary Site Plan, Mission, Vision and Scenario Summary 2016 Labarre Associates, Inc. 12 of 25

13 1. Current Site Plan Continue to support Data Center and CSC Operations Commence Lease of 2nd floor space in January Build-out space in one phase with furniture installed as needed. Renew original lease in 2003 (unless business changes dictate other measures). Planning for expanded space, should begin two years before needed date due to local lease market conditions. Keep budget increases in proportion to increased space and population (excluding project cost) 2. Mission To provide overall facilities leadership that optimizes the CSC work environment with space efficient and functional concepts 3. Vision A written facility vision provides a guide for future planning efforts. It keeps planning teams on track and is the first facilities stop in response to on-going organizational change. Organizational Goals Ownership (Basic Facility Philosophy) - Lease office space, minimize cash flow, outsource facility services. Financial (Cost Control Approach) - control overall leased area Performance - Provide a high-performance and flexible workplace. No unscheduled data center downtime. FINANCIAL OWNERSHIP ORGANIZATION GOALS OWNERSHIP PERFORMANCE A facility vision strikes a balance between ownership, financial and performance goals and the practical realities of coordinating the people, work, place and technology of an organization PRACTICAL LIMITATIONS PEOPLE Practical Limitations People - density should not go below 150 sq. ft. per person. Organizational Purpose (i.e. the work) - Tel-Sell revenue of $575 MM equates to $2.3 MM per day of potential lost revenues due to failure of the facilities infrastructure. WORK PLACE & TECHNOLOGY Work Environment (i.e. place and technology) Site amenities and the work environment play a positive part in employee recruitment and retention. Work process improvements and technology changes A written facility vision provides a guide for will continue to create change at the CSC. future planning efforts. It keeps planning teams on track and is the first stop in changing facilities in response to dramatic organizational change Labarre Associates, Inc. 13 of 25

14 4. Facility Plan - SCENARIO SUMMARY A. Hypothetical Plan - Approach A computer model was set up to project facility needs and associated capital and operating costs over a 15 year period for 16 scenarios that included: Scenario 1 - Lease additional space at University Corporate Center Scenario 2 - Lease Additional space in the Winston-Salem market place Scenario 3 - Build-to-Suit with long -term lease Scenario 4 - Build-to-suit, combined with keeping a partial lease at University Corporate Center Analysis included a 2%, 5%, 7% and 10% growth factor for headcount in each scenario, bringing the total number of scenarios to 16. Capacity Study of Existing Space Assuming a steady growth rate, which, given the recent history of the CSS is unlikely, the current space will fill-up as follows: 2% growth rate - (15-20 people per year) Staying at University Corporate Center is a good longterm strategy for this growth rate. 5% growth rate - (40-70 people per year) Growth at this rate provides a perfect exit strategy for leaving the space at the end of the original lease 7% growth rate - ( people per year) New space will be required in time to start planning the relocation now. 10% growth rate - ( people per year) Planning for new space should have begun already. B. Key Findings Benchmarking has shown that the cost per person of the current facility is extremely competitive due to the office lay-out, North Carolina location, favorable lease terms and facility outsourcing approach to operations If growth in the current facility can continue, cost per person will decrease over time (this is the only option where this occurs). If growth beyond the capacity of the current space is anticipated, it is recommended that BB&T be contacted about sub-leasing space and that the landlord be contacted about a build-to-suit opportunity on the current site. There are no blocks of appropriate lease space available in the Winston- Salem Market. Significant growth (doubling the headcount) will require a build-to-suit with long-term lease that will take a minimum of 2 years to plan and build. WORK 2016 Labarre Associates, Inc. 14 of 25

15 C. Summary Analysis of Scenarios Scenario 1 Lease Additional Space at UCC Good strategy for low growth (2%) environment (less than 20 people per year). For moderate growth (5%) environment, this is still a good strategy, but would involve leasing additional space With this approach, total construction and operating cost savings versus "build-to-suit" for 5% growth is a cash flow difference of $40MM over 15 years. If available, additional space can be leased and built-out in approximately 9 months Scenario 2 Lease Space in the Market place The Net Present Value of leasing and building out space in the market is slightly more than leasing additional space at the University Corporate Center. However, there is no appropriate space in the market and physical separation between groups could be a productivity issue working against this scenario. If available, space could be leased and built out in 11 months Determining the economic order quantity (how much) for lease space is an issue. The area would vary depending upon which groups would be located in a remote location. Scenario 3 - Build to Suit Building would be similar to Sara Lee Headquarters (Assumption) This is the most expensive option - $96 MM cash flow for construction and operations for a 5% growth rate for the next 15 years ($49 MM NPPV) If an available site can be found, the building could be designed and constructed over a 2 year period This scenario should be considered if the population is expected to exceed 1,000 by 2003 Determining the "economic order quantity" for space could be an issue for this scenario. Larger buildings provide a lower construction cost per square foot, but take longer to fill up. The vacant space incurs operating costs while awaiting tenants, and the size of the facility should be carefully studied to balance growth needs, operating concerns and organizational efficiency. Scenario 4 - Build to Suit combined with leasing existing space This option is slightly less expensive than option 3, build-to-suit. This is a short-term "gap" strategy that will have to be studied when future needs are know, because this scenario provides minimal savings over a build to suit. This is because in the build-to-suit, operating costs are incurred for vacant, built-out space while in this option, that cost is roughly equal to the lease cost at University Corporate Center Labarre Associates, Inc. 15 of 25

16 Even though this option does not have a significant financial advantage over build to suit, it should still be considered when building because it provides organizational flexibility Labarre Associates, Inc. 16 of 25

17 D. Exit Strategy If the facility were abandoned tomorrow, the following costs would be incurred. Cost $0.8 MM - Expense to clear out the existing furniture $9.4 MM - Lease expense for the original space through 2003 $4.7 MM - Lease expense for the 2 nd floor through 2008 Unknown - Write-off of remaining depreciation Income $1.6 MM - Potential income from the sale of furniture 2016 Labarre Associates, Inc. 17 of 25

18 IV. Key 1998 Activities Planning/ Change Management Developed a Strategic Facility Plan and Knowledge Base Moved 176 people with no delay to critical business functions Gave up the Temporary Lease on the 2 nd Floor Leased 2 nd Floor Space effective January 1, Operations Developed Key facility measures, goals and scorecard Data Center Provided 100% up-time Successfully tested Business Recovery Facility Successfully tested emergency power generators 2016 Labarre Associates, Inc. 18 of 25

19 V. Programs/ Strategies/ Recommendations The objective of this section is to bring together all facility efforts under a coordinated program that strengthens the facility's contribution to corporate financial performance, enhances the productivity of tenant organizations and builds a facility knowledge base that will expedite future planning and change management strategies Labarre Associates, Inc. 19 of 25

20 1. Operating Cost Strategies/ Programs/ Recommendations Strategy Deliver cost-effective facility services by maintaining better than average cost per person. Programs "Right side up from day One" organizational approach included: Outsourcing all facility planning and management functions Small work stations that share internal circulation space with aisles. This increases density, allowing more people to be located in less space. In order to offset the small area allotted per person, the following features are included in the space: abundant natural light, above standard finishes in common spaces and competitive employee amenities. Recommendations Benchmark workstation sizes and employee amenities with similar companies and facilities to ensure that the overall workplace is competitive with the offering of other companies. Benchmark facility operating costs to determine opportunities to improve operations or deliver more efficient services Status Benchmarking workstations: questionnaires sent out Dec. 5. Results by mid-january. Benchmarking facility operating costs - This is a continual process analysis complete Labarre Associates, Inc. 20 of 25

21 2. Project Cost Strategies/ Programs/ Recommendations Strategy Prudently manage project capital and expense to support corporate financial objectives. Programs Offset capital required for tenant interior construction with a generous landlord tenant upfit allowance. This is paid back through the lease and while it results in increased lease payments, it offsets capital expenditures and stabilizes long-term cash flows. Recommendations Continue to prudently manage build-out of 2 nd floor using the above stated program. Construction of space to proceed in 1999, but furniture will be installed when required by staff growth or organizations change. Status 2 nd floor lease signed. Construction to proceed in Labarre Associates, Inc. 21 of 25

22 3. Customer Service - Change Management Strategies/ Programs/ Recommendations Strategy Ensure moves, move planning and change management do not slow down necessary business changes. Programs Develop and maintain a facility plan that anticipates needs, tracks performance and is communicated to appropriate personnel. Recommendations Continue to maintain facility plan and knowledge base. Status Plan developed in mid Updated twice since then Labarre Associates, Inc. 22 of 25

23 4. Productivity - Asset Utilization Strategies/ Programs/ Recommendations Strategy Ensure that required seating capacity is provided to tenant organizations while still maintaining maximum utilization of the facility and allowing for future changes. Programs Develop and maintain facility plan and continue a dialogue with tenant organizations to ensure proactive communication of tenant requirements. Recommendations Develop "What-if" scenarios in the facility plan that answer major questions about what will happen due to normal growth and unanticipated major growth or contraction in space needs. Status Scenario summary complete Labarre Associates, Inc. 23 of 25

24 5. Productivity - Data Center Strategies/ Programs/ Recommendations Strategy Maintain 100% uptime service level for Data Center and technology infrastructure Programs Maintain a written Business Continuity Plan for the Data Center Test and maintain a back-up site for the Data Center Test and maintain emergency power generation capabilities Recommendations Continue with current level of service 2016 Labarre Associates, Inc. 24 of 25

25 6. Productivity - Overall Workplace Strategies/ Programs/ Recommendations Strategy Maintain a workplace that continues to support tenant requirements Programs Hire architectural, interiors and facility planning firms to continue to complete architectural needs analysis prior to any facility changes. Maintain Business Continuity Plan Recommendations Continue with current program and level of service WORK 2016 Labarre Associates, Inc. 25 of 25