By Jay Goldstein
In economic times such as these, when cutting costs is necessary yet client service is critical, creative solutions can make or break your bottom line. From developers, brokers, tenants and property managers, outsourcing is a viable solution. It may be time to outsource segments of your business.
Benefits
A variety of proven benefits of outsourcing include reduced overhead and workload adaptability. However, there are also many obscure advantages to outsourcing, which are specific to real estate. Here are just a few:
• Limit your financial exposure to costs attributed directly to your projects. Real estate developments are intermittent and for finite periods of time. Outsource certain day-to-day aspects of your development process so in-house staff can find and negotiate more future deals.
• Concentrate on your company’s core competencies. Utilize the core competencies of service providers to supplement your business. Keep the dealmakers in-house and outsource project execution.
• Focus on multiple projects without spreading yourself too thin. If several of the deals that you’ve been chasing suddenly all hit at once – no worries. Supplement your in-house staff with outsourced service providers.
• Engage the experts. With constantly changing codes, requirements, technologies, etc., rely on an experienced, specialize service provider to facilitate each phase of the development process.
• Reduce travel costs. Keep your people “at home” while managing projects at a distance. Utilize regional service providers as your “boots on the ground.” From due diligence and permitting to site inspections and construction management, strong relationships with local resources ensure efficient and effective implementation.
• Participate in emerging trends. Tap experienced professionals to guide you through potential opportunities and pitfalls related to new trends. Outsourcing allows you to get your feet wet with new concepts, such as LEED-certified buildings without experiencing an in-house learning curve.
Services Expansion
One of the most exciting real estate trends in customer service is outsourcing. This fresh approach to better serve your clients includes expanding your service offerings to differentiate yourself from your competition. Through outsourcing, many small companies offer the same services and execute the same volume of work as organizations many times their size. Bigger is not always better, but smarter is.
Service expansion through outsourcing is rapidly expanding. Service providers such as brokers, architects and property management companies can expand their scope of services through outsourcing, which can create a new revenue stream. An expanded scope of services can generate new business with existing clients and attract new clients through differentiation.
The same obvious advantages of outsourcing apply here such as controlled costs, increased efficiencies, adaptability and human resource stress. However, some of the not so obvious benefits are:
• One stop shop for your clients. Create a network of expert service providers that you can market as your own. The client now only makes one call, not five, when they are ready to make a move.
• Never have to tell your clients “No”. As your client’s needs change, you adapt with them. Outsource to accommodate their needs.
• Maximize the opportunity, minimize the risk. Through outsourcing, you can be a true full-service provider with minimal risk. Alter your services at the beginning or end of any project without making any staffing changes; Depend on your service providers to be the experts; Stay on top of market pricing for all of your expanded services.
Challenges
The biggest challenge of outsourcing is managing the relationship between clients and service providers. When you outsource segments of your business, you essentially put your company’s reputation in the hands of others. Significant emphasis must be placed on the selection of your network of service providers. Each provider should share your vision and objectives to maintain a consistent and valuable service that you are willing to claim as your own.
So ask yourself the question: To outsource or not to outsource? What other doors will open up when you can concentrate your existing staff on your core competencies? Foreword thinking executives are taking advantage of a slow down in workload to rethink their corporate strategies and many of them will turn to outsourcing as a solution. What about you?
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Jay Goldstein, LEED AP is managing partner at GreenLight Development Services.