For corporate real estate (CRE) and workplace management executives seeking to chart a more strategic course within their companies, the ability to not only create but to identify and track value is critical to attaining new-found credibility in the eyes of the C-Suite.

Deloitte Consulting’s Enterprise Value Map, or EVM, provides this ready resource across the spectrum of asset management.

Deloitte’s George Bouris, who helped develop EVM, described the tool’s matrix-style format as "interdisciplinary and reflect(ing) integrated infrastructure and support models" used today by a growing number of global corporations. While there are separate EVM’s for different industries, the matrices that define the various models "reflect the whole enterprise."

"It’s a model for the entire enterprise and all shared services," Bouris explained.

According to Vinay Ramanathan, who also helped develop EVM, the matrix is "cross-functional all in one data base," so that can it can be used to define and develop business cases, business processes, solutions, process mapping incorporating methods and tools, and – most of all – key performance indicators that will yield critical data on how much corporate real estate and workplace are adding to shareholder value.

EVM also enables outcomes such as the clear identification of improvement actions. "BPI is another key component," Bouris added.

EVM is ultimately a process-centric approach to shareholder value creation that Bouris said can provide CRE’s with "a tool to have a meaningful conversation" with company CEO’s and CFO’s. Its dynamic nature could make it a worthy addition to the toolbox of any CRE seeking a voice with senior management.

EVM is modeled on four strategic value drivers:
• Revenue growth
• Operating margin
• Asset efficiency
• Expectations

Factors that respectively fall below each driver include volume; price realization; general and administrative (G&A); cost of goods sold (COGS); income taxes; property, plant and equipment (PP&E); inventory; and receivables/payables. Multiple sets of key improvement actions fall below these factors and populate the balance of the matrix in a detailed manner.

While Bouris concedes that a CRE-specific matrix has not been developed, the tool can be adapted in a bottom-up fashion for application to CRE scenarios. "Regardless of how it’s used, it’s not just a framework," Bouris emphasized. "It’s ‘how do we align with the rest of the business?’" He pointed to the tracking of profitable sub-leases as an example of how CRE’s would use EVM and demonstrate how real estate contributes to corporate revenue.

Some of EVM’s features even address the new but pressing area of corporate compliance and governance, feeding into Sarbanes-Oxley (SOX) reporting requirements. "It can also take processes (surrounding key management decision points within a company) and certify for SOX like Six Sigma," Bouris claimed. "It lends clarity to work flow and decision flow."

In an overall sense, because it is tied to revenue growth, operating margins, asset effectiveness and managing to expectations, EVM "helps achieve results that matter," according to Bouris.

He listed EVM’s benefits to corporate real estate professionals as:
• Helping CRE gain a seat at the management table
• Facilitating the dialogue surrounding value creation
• Bringing alignment of real estate with business strategy beyond the esoteric, conceptual level
• Providing an ongoing focus on asking the right questions about measurement and continuous improvement
• Taking alignment down to specific functionality

EVM is market-tested with more than 45,000 copies used by over 100 Deloitte client teams, according to Bouris, who concluded: "You can’t afford not to be integrated with the rest of shared services, the rest of the enterprise."

– Richard Kadzis