Workplace Analytics

CFOs Leverage Data-Driven Insights

to Create Value & Manage Costs

Do more with less. That’s not a new directive for any organization operating in today’s
competitive global economy. Chief Financial Officers (CFOs) are under increasing pressure to identify
new opportunities to create value while also containing costs. While that task is never easy, these days,
CFOs are finding that the solution is at their fingertips in powerful analytics that enable them to make
better, data-driven decisions. Specifically, workplace analytics combines big data and data science tools
to generate insights into office space use that can be used increase efficiency and productivity, thereby
adding value, while reducing both capital and operating costs.

The task of creating a more productive workplace is a universal imperative for organizations today. More
and more CFOs are leading the charge to embrace analytics that foster a holistic vision of investments
which will increase productivity in the workplace.
Evolving Work Styles & Work Environments
A fast-paced, agile business environment requires responsiveness. Evolving workstyles, changing work
environments and four generations in the workplace all demand flexibility. In the past, office space was
seen as more of a long-term, fixed asset, rather than as a resource that can be responsive and supportive
of organizational change. As a result, until recently, not enough thought has been given to enabling
corporate flexibility and the resulting positive effect on the business. The use of workplace analytics
allows for continuous improvement and more accurate analysis of space utilization with greater timeliness,
precision and confidence.

Questions that CFOs should ask their CRE teams to better understand the potential for improving the
impact that office space has on the bottom line include:

WHAT IS OUR PORTFOLIO MIX WHAT IS THE MOBILITY

OF OWNED VS. LEASED? HOW CLASSIFICATION OF OUR
FLEXIBLE ARE OUR LEASES EMPLOYEES?

WHAT ARE THE INTER- AND

WHAT IS THE UTILIZATION RATE
INTRA- DEPARTMENTAL
OF OUR SPACE?
COLLABORATION NEEDS?

WHAT IS THE OPTIMAL WHAT ANALYTICS ARE

MIX OF SPACE TYPES TO AVAILABLE TO BETTER
FOSTER INNOVATION AND UNDERSTAND AND BENCHMARK
COLLABORATION? WORKSPACE UTILIZATION?

There’s a lot of buzz around data analytics these days, and it’s easy to get
caught up in enthusiastic conversations about data’s ability to transform
organizations. Not surprisingly, many CFOs are looking to data analytics as
a way to meet the increasing expectations placed on their role. Analytics
offers the means to extract valuable insights from masses of data - insights
that can be used to support business decision-making and influence the
future performance of the organization.” 1

1
Bishara, S. & Sedra, R. (2015). CFO Agenda issue 9: Making data analytics work: CFOs are keen to exploit the po-
tential of data analytics – but are their organizations prepared? http://www.pwc.com/ca/en/services/consulting/
publications/cfo-agenda/making-data-analytics-work-cfos- are-keen-to-exploit-the-potential-of-data-analytics.html
Workplace Analytics insights for CRE decision-making
It is important to recognize that data alone–even “big data”–will not inherently produce insights that
enable decision-makers to optimize their workplaces. Organizations need to apply analytics rigorously to
data to derive actionable insights. Workplace analytics help organizations to make data-driven decisions
about their space and workflow, to optimize their space use, reduce costs and maximize employee
innovation and satisfaction. The leading tools are web-based platforms based on the latest data science
that can measure actual space utilization (as opposed to mere “attendance”), total cost of occupancy,
and employee mobility within a building, a campus, or across a global portfolio.

What is the secret sauce?

To quote T.S. Eliot “Where is the wisdom we have lost in the knowledge? Where is the knowledge we have
lost in information?” The wisdom or knowledge is in analytics. Workplace analytics dashboards and reports
enable CFOs and their directors of real estate and workplace services to understand how their office
space is being used, in order to optimize portfolios, workspace configurations, and designs to reduce
costs and environmental impacts while maximizing employee productivity, innovation and satisfaction.

Automated data collection Dynamic, real-time reporting Robust analytics based

and management on multiple sources and
sophisticated algorithms

Unobtrusive technology Safeguarded employee Actionable Insights

leveraging existing privacy
infrastructure and data
Paint me a picture: Who is watching?
Gone are the days of paying for “bed-checks” or manual counts that are performed for a limited period of
time, providing a narrow data set measured in weeks and filled with gaps and inaccuracies. Today, 24/7
continuous monitoring of utilization and other KPIs across multiple locations is possible using existing data
sources that can be analyzed using data science techniques and advanced machine learning algorithms.
Such monitoring solutions are deployed as a system of record that can provide granular analytics, without
compromising employee privacy and trust.

Concerns about the use and abuse of personal information have only increased following revelations about
the unprecedented scale of government and private data gathering from cellphones, email, social media,
and various other sources, as well as a string of hacks of data from major companies. This has caused
many employees to question any potential compromise of their fundamental right to privacy. FM:Systems’
approach is designed to address those concerns and ensure privacy by integrating four methods that:

• Eliminate personal information from the data and results

• Anonymize data sources
• Encrypt and secure all databases
• Aggregate results
 Highly engaged workforces
outperform their peers by
147% in earnings per share.

Corporate Real Estate Analytics: Taking a closer look

A decision supported by advanced analytics is a cost-effective way to align external demands,
organizational imperatives and opportunities in the commercial real estate market. A company can’t
risk making lease and similar decisions based on outdated, incomplete and inaccurate data, especially
when there is so much more, inexpensively available data at their fingertips. Forward-thinking companies
recognize that employees have multiple preferences for how they work, and that they need to invest in
ways to enable that environment. Companies such as Indeed, LinkedIn, SAP, Airbnb, Salesforce, Google,
Amazon, and many more, are completely rethinking how the physical environment can be leveraged to
create a competitive advantage. Today’s CFOs are now embracing leading- edge CRE analytics as a
critical success element in their toolkit, just as they have in other parts of their business.

Cost Management Multiplier Effect

Historically, CRE has been viewed as a
necessary cost. Corporate cost savings
initiatives were among the main drivers of
real estate decisions. Space optimization
still offers organizations cost savings,
but the richness of analytics insights also
enables CFOs to manage assets much
more flexibly.
Workplace analytics quickly generates a
multiplier effect. The benefits of investing
in data-driven workplace modernization
allow organizations to change their
approach to real estate away from pure
cost savings and expense management to
corporate strategy and investment.
Data-Driven Business Cases
Demonstrate Bottom Line Impact
CRE decisions can be driven almost solely by cost savings and cost avoidance. There are ample case
studies where CFOs and CRE teams have used workplace analytics to produce a significant financial
win for their organizations.

For example, one high-tech firm had five buildings located on two campuses in one metropolitan area.
Through insight gained from workplace analytics, the company was able to increase occupant density and
implement a hoteling program. As a result, they were able to consolidate into only one of the two sites,
reducing future lease obligations and the associated operating costs by more than 18 million dollars over
five years. They were also able to increase employee satisfaction and retention.

Cost Reduction Through Space Optimization

Campus B, Building 4

Five years remaining on lease B3 Exit Costs $ 698,000

Relocate to Campus A, Building 1

Sublet 110K SF Rent Recovery $ 6,932,000

Net Savings $ 6,234,000

Campus B, Building 5
Four years remaining on lease B2 Exit Costs $ 7,086,000

Relocate to Campus A, Buildings 2, 3

Sublet 180K SF Rent Recovery $ 19,200,000

Net Savings $ 12,114,000

Total Savings $ 18,348,000

In this case, a simple analysis of space using bed-checks and building

attendance would not have justified this substantive change.
A simple analysis would only have scratched the surface and not have uncovered the sizable net savings.
Workplace analytics uncovered a “bigger picture” of potential savings achieved through the optimization
of the space by understanding use, mobility, and collaborative habits of the employees.

As this example shows, space optimization can send direct benefits to the bottom line. Those savings can be
reallocated to better support the corporate strategy. Advanced analytics capabilities allow organizations
to capture additional value in soft dollar benefits, including greater productivity, higher worker retention,
and attracting the best talent. Research has shown that a key contributor to productivity is employee
engagement. Higher levels of engagement result in higher productivity and more effective collaboration,
leading to innovation, which dramatically increases profitability and customer satisfaction.

How Does the Workplace Drive Employee

Engagement and Collaboration?
According to a Gallup study, work units in
the top quartile in employee engagement
outperformed bottom-quartile units by 10%
on customer ratings, 22% in profitability,
and 21% in productivity. Work units in the top
quartile also saw significantly lower turnover
(25% in high-turnover organizations, 65%
in low-turnover organizations), shrinkage
(28%), and absenteeism (37%) and fewer
safety incidents (48%), patient safety Highly Engaged
incidents (41%), and quality defects (41%).1 Employees
Outperform
In the same study by Gallup, companies their Peers
with highly engaged workforces outperform
their peers by 147% in earnings per share.2

Data obtained by ZDNet reveals that

companies in the top decile for employee
engagement can expect a nearly four times
higher earnings per share (EPS) growth
rate.3

1
http://www.gallup.com/businessjournal/163130/employee-engagement-drives-growth.aspx
2
http://www.gallup.com/businessjournal/163130/employee-engagement-drives-growth.aspx
3
http://www.zdnet.com/article/does-technology-improve-employee-engagement/
 Achieve higher EPS
growth rates through
space optimization

Conclusion
Through the use of analytics, an organization can deliver optimized space that not only provides the correct
amount of space when organizations and departments need it, but also gain a better understanding of
the type of space that employees need to collaborate, create and be more productive, ranging from large
team meetings to small break-out groups and private, individual workspace.

CRE has often articulated the opportunity associated with soft dollar benefits within their business cases,
only to have those views overlooked or dismissed in the decision-making process. Yet perceptions are
changing along with growing qualitative evidence that those soft dollar benefits are very real and very
attainable. Both hard and soft cost savings support the changing view of the CRE portfolio. It is no longer
simply a cost that needs to be managed. CRE is increasingly viewed as a strategic asset and a critical
component for the success of the business. Workplace analytics is a key tool that CFOs can leverage to
unlock savings and increase the effectiveness that CRE has to help lever business success.

Contact FM:Systems
www.fmsystems.com U.S. Toll Free: (800) 648-8030
E-mail: info@fmsystems.com International: (919) 790-5320