Myth #1: "Corporate real estate outsourcing has no real benefits; it's corporate gamesmanship to jump on the company's outsourcing bandwagon. Companies should outsource only where it makes sense--payroll and human resources."

CRE outsourcing does provide tangible benefits, such as portfolio cost-management, expanded resource and research capabilities, process improvement and overhead reduction. While CRE is not a back-office process in the truest sense, it does share some of the same qualities that make HR, IT and accounting prime outsourcing candidates:

The function is not the company's core business;
Service providers for these functions are extremely competent; and
The cost savings are immediately apparent.

Myth #2: "We've been through this before. Most service providers have no idea what we want and can't grasp what we do."

Many companies that have tried outsourcing and failed did not undertake a preliminary needs analysis. Unless you have an exceptionally good handle on your own business processes and shortcomings (and most CRE organizations don't), you cannot define what you expect from an outsourcing. A needs-analysis can identify opportunities, and service providers are expert at taking a well-defined operation and creating incremental, yet far-reaching improvements to your business.

Myth #3: "Outsourcing is just another word for layoff. That's the real reason management is always threatening to outsource this department."

Sadly, this describes the reality behind public opinion on outsourcing. However, outsourcing today is vastly different than it was in the 90s. Today's outsourcing is about creating partnerships and alliances--not division. If your management is using outsourcing as a threat, then they are really missing the point.

Myth #4: "Service providers are all the same."

Service providers all have the same intent--that is, to provide best-in-class real estate services to their clients and helping them to succeed. However, each provider approaches that goal differently and with varying levels of success. Some try and help by taking over all the tactical work, allowing the client to be more strategic and proactive. Others serve primarily as strategic advisors and coordinate only the tactical work upon request. Others want nothing but the opportunity to provide tenant representation and let you handle all strategic issues. Again, if you have defined your requirements extensively (that is, beyond one-off tenant representation and brokerage services), you'll notice the differences.

Myth #5: "We don't need to outsource; we run the tightest CRE ship in the industry."

Not for long. The industry is maturing rapidly with technology, best practices and process improvement. If you aren't ahead of the game, you're not even in it. By selecting the right service provider, you'll have the latest process-management tools, benchmarking studies and performance specifications in the industry.

Myth #6: "Service providers nickel-and-dime everything, and by the time it's over, outsourcing is actually costing us more than keeping things in-house."

A good service provider will approach every engagement with a service contract that clearly spells out the complete scope of services--including costs and resources. But it is imperative that both parties agree on the contents of the agreement.

Remember, it's always more expensive to buy a la carte, and in order to take advantage of the economies of scale, you need to make sure everything you want or expect from the outsourcing relationship is clearly spelled out in the contract. The real value is in asking for the highest level of integration your provider has to offer.

The biggest myth of outsourcing is that CRE organizations will lose control of their operation. In fact, quite the opposite is true. Control in the CRE function exists at the strategic level. If your CRE team is not working with your customers in strategic planning of their real estate, then you don't have control to begin with. So, what have you got to lose?

Vik Bangia ([email protected]) is director, corporate services in CB Richard Ellis' global transaction management business. He was previously with Unocal Corp., where he managed information technology, corporate real estate, asset management and environmental remediation activities.