The Client: Private Health Company

Property transformation led to national model and $22m in savings p.a.

Delivering Property Services Transformation to Drive Cost Savings and Strategic Capability

Grosvenor partnered with a large multi-site healthcare property portfolio organisation to deliver a comprehensive property services transformation, redesigning the operating model, implementing outsourced service delivery where appropriate and strengthening governance, capability and data management, resulting in significant cost savings and improved strategic alignment across more than 2,500 properties. This case serves as a property services transformation review to highlight the outcomes achieved. In summary, this property services transformation review demonstrates how strategic changes in service delivery can impact cost and capability.

Situation

The client occupied more than 2,500 properties across Australia, which brings with it significant risks relating to controlling spend and WHS for doctors, patients and staff. The new management expected corporate functions to add value to the business, rather than just react to operational issues. However, their existing structure and delivery model supported only the provision of operational and tactical issues for a small part of the business, not the development of business unit-specific or company-wide strategies or opportunity assessments.

Task

Grosvenor was engaged to deliver a review of the client. The project was launched in July 2017, with the objective for the client to:
become a strategic lever used to improve business performance, reduce risks, and support planned growth and international expansion,
implement a CRM approach with dedicated internal relationship managers who can better support the business, significantly improve internal capability and access to external market expertise, better coordinate services and project with internal customers and other corporate services, including HR and IT. Additionally, a property services transformation review was necessary to ensure these objectives were effectively met.

Action

Grosvenor was engaged to deliver a review of all elements of the business model for the client and develop the business case for the client’s Transformation Project. We were then engaged as the project managers for the implementation. Grosvenor’s deliverables were many and varied. Notably, the property services transformation review provided ongoing insights for implementation actions and future improvements.

In addition to the original review and business case we delivered:

changes to business models, tools and templates to better align the client with the strategic needs of the business
restructure of the client to align with the required capabilities
implementation of a new service delivery model, including putting in place a partnership with an outsourced provider of operational services
a new approach to leasing and maintenance contracting designed to reduce costs
assurance the change was managed in such a way as to gain buy-in from the national workforce and contribute to the ongoing property services transformation review.

Result

The project created >$7m in savings in the first year and identified a pipeline of >$15m of further savings for delivery after the project was handed back to the BAU team. In addition to the hard savings, the project delivered:

regulation of the management of property data
a reduction in management effort to non-core activities
improvements in compliance and risk management
standardisation of service delivery
an improved ability to develop strategies
reduction in distractions for management.

Grosvenor’s involvement was essential to establishing the relationships with the market, and to aligning the performance of the service providers with the program design and objectives. We significantly exceeded savings targets and we delivered our role and outcomes under-budget.

Explore this for your organisation.
Start a conversation with Peter Macfarlane, Property Lead