IDRC Abstracts

Abstracts of major presentations of the International Development Research Council (IDRC), the world’s pre-eminent corporate real estate association.

       
“The power of the chip has doubled about every 18 months,” said Robert J. Herbold, executive vice president and chief operating officer for Microsoft. “No other industry is making that kind of progress.”

       
The pace of this progress and the efficiencies it is driving are changing the way we do business, said Herbold. If you play the game correctly, he noted, you can win.

       
Leveraging new technologies like the more advanced microchip can produce better consumer services, better financial results and a more contemporary image for your company, said Herbold. Also, “it gives the opportunity to drive out legacy systems and legacy people,” he added.

       
Reverse auctions are just one example of leveraging a new technology to improve value for your company. A reverse auction identifies a group of authorized vendors, prescribes a time and date for an auction and predetermines the length of the auction. “This allows vendors to bid on contracts, and they can see what others are bidding,” said Herbold.

       
Microsoft used a reverse auction for its relocation services. The company wanted to lower the price it paid per year to a contractor to provide relocation services for the thousands of employees Microsoft hired and moved each year.

       
During the bidding process, the incumbent service provider barely lowered its rates while the competition underbid the incumbent. Once the session ended and the auction went into overtime, “the incumbent began to nosedive when they realized they may lose the business,” said Herbold.

       
The reverse auction caused the incumbent to cut its original bid by $2.3 million. “This use of technology drives tremendous efficiencies,” the Microsoft executive said.

       
McCallum Sweeney, a Greenville, S.C.-based location consulting firm, had been charged with heading up site searches for two Nissan projects. The challenge: complete site selection within four weeks for an expansion project and select a site for a major new automotive assembly factory within five months.

       
“We had a very short fuse on those projects,” said Mark Sweeney of McCallum Sweeney.

       
Project Tanager was the code name of the expansion project, which went to Tennessee. Project Delta, the code name of the new facility, was an even bigger deal, landing in Mississippi. Sweeney and Jim Morton, senior vice president of Nissan North America, and Jay Moon, deputy director of the Mississippi Dept. of Economic and Community Development, each shared their insights into what made the entire site selection process successful.

       
A key component, all three speakers said, was the confidentiality adhered to by all parties involved. Equally as important was Mississippi’s commitment to doing whatever it took to win the new plant. Two special sessions of the Mississippi Legislature were needed to make the deal happen. The state also embarked on other initiatives, including creating an inventory of available sites that were suitable for a major project.

       
The presentation emphasized the importance of forming project teams and developing workable deadline schedules as critical to ensuring a fast-paced site selection.