Changing Data Needs for the Changing Workplace
The ability for workers to become truly mobile has arrived. Advances in portability and secure technology delivery are prompting more organizations to embrace flexible work programs.
Today’s star performers are looking for the freedom to work anywhere, anytime. This does not necessarily mean working from home or in another office. They expect employers to trust them to manage their time and to decide for themselves the most productive place for them to work.
While a management shift that supports this ability to work in various locations helps with the attraction and retention of the best people, it also leads to much lower utilization rates within traditional office space. Corporate real estate and facility management groups must make a business case for holding and maintaining square footage while responding to this rising demand for different types of non-traditional workspaces.
The workplace design community has reacted to this change with astounding creativity. We are experiencing the reinvention of the workplace as we know it. Designers are moving organizations away from the cubicle farm and providing space with different work settings that respond to how occupants actually work. One strong trend is a migration from dedicated, assigned “I” space to more flexible, open “we” space.
Why is workplace design so important? The 2013 Design Value Index Survey tracked the value of publicly held companies and monitored the impact of their investments in design and innovation on stock value over time relative to the Standard & Poor’s 500 Index. From a pool of 75 businesses, just 15 (20 percent) of the companies met a rigorous set of six Design Management Institute criteria. Over the past 10 years, the results show that design-centric organizations have maintained a significant stock market advantage, outperforming the S&P by an extraordinary 228 percent.
The dilemma for CRE and FM professionals is that the evolution of the workplace is rewriting the traditional rules for real estate planning and facility management. There are no simple formulas or easy answers.
Setting a Common Language
As we develop strategies for an organization’s real estate, it is important to establish a common language for defining requirements and developing consistent, repeatable baseline data. Organizations should identify their preferred tools and methods for analyzing current space utilization and planning for future use.
Organizations need to decide which standards to adopt for naming and measuring space types. Options include space standards from the International Facility Management Association (IFMA), the Building Owners and Managers Association (BOMA) or the Open Standards Consortium for Real Estate (OSCRE). Organizations also need to identify how many space types they want to define and how they will measure their effectiveness over time.
As measurement standards, IFMA and BOMA don’t focus on the details of space use. Yet CRE groups often apply these external standards to internal space, with business units as the tenants and CRE as the landlord.
Primarily used for leasing purposes, BOMA standards are geared toward commercial property management and do not measure how tenants use internal space. BOMA standards are intended to enable a landlord to charge rent for all areas in a building, including the tenant’s space and a proportionate share of the building’s common areas. This includes spaces like building lobbies, security areas and electrical rooms.
IFMA’s space planning standards are useful for organizations that either lease space or own and occupy it for their own business purposes. IFMA’s standards do not address building common areas as part of the rentable area and are primarily used for facility management, not lease negotiations. IFMA’s standards provide a definitive procedure for measuring and classifying floor area in buildings, specifying occupant requirements, and for developing space plans and strategic facility plans.
OSCRE’s data standards greatly reduce the cost companies incur for customized integrations, data scrubbing, manual data entry and data re-entry. These standards allow the real estate industry to collect and analyze data more effectively by using standardized terms.
OSCRE’s classification standards focus on space use and provide flexibility for a variety of space types. The challenge is to take advantage of this flexibility while not overcomplicating the process. Organizations should ensure that their definitions of space types are adequately documented and clear enough to allow for correct selections without providing hundreds of choices.
Every CRE and FM group should study the advantages and disadvantages of the standards from BOMA, IFMA and OSCRE. Unlike the generally accepted accounting principles (GAAP) required for releasing financial statements, there are no compliance rules. This freedom can make it difficult to decide which standards are best for an organization. In the end, there is no right or wrong answer. It is most important to select the appropriate standard for your organizational needs, be rigorous in its implementation and validate its proper use on a regular basis.
Mathematics Before Graphics
Traditional facility programming methods of gathering headcount forecasts and comparing them to business requirements once provided most of the information needed to define an organization’s space requirements. In our current world, though, that’s only one piece of the puzzle.
Space utilization studies show that 40 to 50 percent of assigned space goes unused in a given day. Using this as a rule of thumb, an organization could develop various gearing ratios for sizing an envelope with unassigned seating. But broader questions about the correct composition of the space will ensue. Simply moving to a smaller footprint for workstation space probably is not the answer.
It’s vital to understand the functions and unique work styles of occupants of a workplace. This will equip CRE and FM teams to develop the optimal combination of work settings to support the productivity of the workforce. Doing this, however, requires a deep level of analytics.
Bernard Marr, author of “Big Data: Using SMART Big Data, Analytics and Metrics to Make Better Decisions and Improve Performance,” predicts that specialized software designed to create visualizations from data will make it easier for us to spot patterns and links between cause and effect. This software will become increasingly sophisticated and widely used. The market is expected to grow 2.5 times more quickly than that for other business intelligence software products.
CRE and FM groups that master big data mystery will be well positioned to model space options and to create solid baseline data that will define the future workplace envelope. In many cases, the sharing ratios for flexible work environments will have been developed using a combination of available data such as security access badge swipes, data collection from occupants about how they use their space and observational studies. Some organizations will make the leap to using technological means of measure.
According to a new market research report, “Occupancy Sensor market by Technology (Passive Infrared, Ultrasonic), Network (Wired, Wireless), Components, Application (Education, Health Care, Hospitality, Industrial, Retail) and Geography – Analysis and Forecast to 2013-202,” the occupancy sensor market is estimated to reach US $4.67 billion by 2020.
Utilization and Metrics
We are experiencing dramatic changes to what must be measured. With most space significantly underutilized, traditional measures of space will be changed to gauge the time spent in a given seat or space. Planners must use multiple data points and will heavily leverage technology.
Today’s CRE and FM leaders are continually asked about cost per employee versus the past question of cost per square foot or seat. Managing space will require planners to view it through a different lens. Utilization will be calculated based on actual use rather than assignment. The utilization rate will no longer come from the simple equation of 100 seats assigned to 80 people equals 80 percent utilization. More robust data will be needed to assess utilization to manage the “I,” “we,” shared, collaborative and concentrative spaces within a workplace.
An organization’s data sources should be as sustainable and automated as possible. This will enable planners to extract periodic updates to analyze against the baseline and inform future space forecasts. Abundant new products are mining various data sources to include things like data port utilization, seat and room sensors and security badges. These new products provide dashboards that highlight utilization factors while also providing predictive analytics using algorithms that forecast future demand.
Benchmarking internally and with external sources, such as IFMA’s Benchmarks Exchange (BEX) online platform, continues to be valuable for many organizations. The migration to software as a service (SaaS) space planning platforms will make this benchmarking easier and more effective.
The Future of Data
Data drives good decisions. Making timely decisions about future space needs requires a deeper data structure. As the level of data gets more detailed, it will become more robust and readily available.
Organizations can use highly automated data to:
- Validate a strategy
- Refresh assumptions
- Reimagine the workplace based on changing work styles
For example, a solution that serves those functions may provide:
- Consistently applied standards based on the adoption of primary space calculation guidelines
- An automated space data feed from the IWMS model
- A three-way look at space requirements: modeled (per set guidelines) versus actual (current condition, fed from the IWMS) versus planning recommendations for the future, based on periodic revisions and changes
- Variation tracking between modeled versus actual
- The ability to plan for additional amenity requests and to flag the output if certain conditions are not met
This demonstrates a possible scenario for identifying and managing the necessary data points that CRE and FM managers will need to analyze space needs for their organizations moving forward. No single metric will tell the complete story so we must triangulate data points from various sources to make well-informed decisions.
The validity of future utilization data and metrics, along with the ability to compare actuals with the planned/targeted guidelines, will need to be built on a common language. Whether it is custom or a purchased solution, the dataset must be consistent, repeatable and accessible. It needs to be agile enough to deal with current and upcoming challenge such as calculating the right number of seats to people, considering the significant rise in freelance or contract-only employees in comparison to traditional full-time employees.
It’s critical for CRE and FM teams to understand how their data needs will change as they implement mobility/flexible work programs. Establishing consistent terminology, documented references, data standards and the data points required to track utilization will help.
Planners have already made the transformation from measuring square foot per seat to square foot per person in occupancy planning calculations. It’s now time for another paradigm shift as we begin implementing different ratios for different types of employees in space need calculations.