by Brianna Crandall — August 20, 2014—Procurement officers face growing responsibility for compliance and risk management, which now includes compliance for their company’s real estate and facilities, according to JLL, a corporate real estate advisory firm and expert in facilities management.
“Regulation on corporate offices, manufacturing and retail facilities is putting complex demands on corporate real estate teams,” said Bryan Jacobs, international director, JLL. “This is driving rapid demand for facilities management outsourcing as well as collaboration between real estate and procurement teams.”
According to Ardent Partners’ CPO Rising 2014: Convergence report for chief procurement officers (CPOs), compliance is a priority for 32 percent of procurement executives this year, up from 23 percent in 2011. JLL’s Jacobs advises procurement teams and corporate real estate executives to consider the following high-risk areas to help avoid regulatory fees:
- Americans with Disabilities Act (ADA) Compliance: In 2013, new ADA regulations became effective for nearly all types of commercial facilities. Companies with numerous retail outlets, such as banks and chain restaurants, are most at risk—but corporate offices also pose high non-compliance risks and steep penalty fees.
- Hazardous waste removal: Most companies outsource janitorial services, typically to the lowest bidder. However, some providers lack the right training to manage hazardous waste, whether it involves chemicals, biological materials or medical waste. Similarly, in-house facilities teams may or may not be formally trained in up-to-date compliance procedures—and the cost of non-compliance can be high. Procurement officers must choose vendors carefully to mitigate hazardous waste compliance risk.
- Biopharmaceutical manufacturing, clinical practices and laboratory management: Biopharmaceutical production companies must follow around 1,250 standard operating procedures—many pertaining to facilities—required by the U.S. Federal Drug Administration and other governing bodies. Regulations encompass everything from the appropriate storage of biological materials to the provision of sterile environments, as well as safe maintenance and management of potentially hazardous equipment. Companies must ensure that their staff or vendors managing these highly-regulated facilities are qualified.
- Data security and privacy: As consumer data breaches continue to make headlines, data security is becoming a hot-button issue in many industries. While data security is typically addressed in network and data center facilities, offices and retail outlets may have areas of vulnerability to data thieves and regulatory bodies alike.
As a leading provider leader of real estate outsourcing, JLL’s Corporate Solutions business helps corporations improve productivity in the cost, efficiency and performance of their national, regional or global real estate portfolios by creating outsourcing partnerships to manage and execute a range of corporate real estate services. This service delivery capability helps corporations improve business performance, particularly as companies turn to the outsourcing of their real estate activity as a way to manage expenses and enhance profitability.
