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October 14, 2016
- Design & Construction
By Scott Price
Third-party practices have fueled innovation in nearly every American industry over the past 40 years. Manufacturers utilize third party logistics to manage the supply chain, while companies like Expedia and Uber employ third party aggregation strategies within the entrenched travel and taxi sectors. These models combine systems integration with aggregate procurement methods to connect end users to better solutions. The commercial workplace—a $10 trillion industry, however, has been overlooked.
Requirement-planning expertise, aggregate procurement, access to the top vendors, and end-to-end project management is now available with third-party objectivity for office and industrial workplaces, challenging the traditional, vendor-led approach. A third party is not a vendor, but instead, certifies, negotiates with, and manages vendors.
By employing the same proven methodology to the commercial and industrial workplace, this streamlined model is producing better outcomes, faster for at a lower cost.
Third-party workplace design and delivery firms produce 3-D models, complete with detailed costs. Work requirements and pricing parameters are created for the supply chain (developer, broker, architect, contractor, sub trades, etc.) Team vendors import their pricing information, which allows users to see detailed costs as they test various scenarios. Every project segment — from furniture to wiring — is included. Middlemen and sales pressure are eliminated with the third-party model.
Emphasis on pre-planning, or “integrated project delivery” (IPD), allows for informed project cost optimization before work takes place, saving time and money over time. Through IPD, third-party firms enable clients to exert informed control on their projects before the lease is signed, rather than settling for an uncertain outcome imagined from a flat rendering, post lease or purchase agreement. According to Karl Heitman, AIA, a leading expert in commercial design innovation, “The model creates a seamless process between vendors, with fewer errors. More than a dozen middlemen and layers of sales pressure are eliminated.”
Without a third-party firm, brokers and contractors stealthily steer customers to favored vendors, even when bidding projects. Customers, unaware these tactics, are usually preoccupied with their immediate space needs. Moreover, most tenants don’t have the clout or knowledge to negotiate the broker’s commission structure. In the mid-market, 97 percent of tenants don’t negotiate with brokers at all. In contrast, by staying vendor-neutral, third-party workplace firms are able to employ tools, contracts, and experience to avoid these common traps, turning the outcome to the buyer’s advantage.
With dozens of sizable workplace projects annually, large corporations leverage their yearly transactions to purchase in bulk, negotiate lower cost per unit, deal directly with manufacturers for wholesales rates and get preferred terms from local tradesmen. Third-party firms offers mid-market firms access to similar aggregate discounts, for a fraction of the traditional cost for substandard products and less qualified tradesmen. Scott Price is president of PlaceValue, a third-party workplace design and delivery firm, specializing in office and industrial workplace. Learn more at www.placevalue.com