The tech industry was better prepared than the vast majority of companies for the sudden shift to working from home. In this episode, Peter Baumann and Sabine Ehm walk through how SAP is developing its corporate real estate strategy now and post-pandemic.
Our corporate real estate management expert guest
Peter Baumann is the Global Head of Real Estate & Facilities Projects at SAP. He started at SAP over 20 years ago fixing desks and distributing the post. His ambition led to taking on more and more responsibilities over the years. With an interest in project management, he found himself the Head of Project for EMEA and has since delivered 150+ projects throughout the region. It was in this position that he learned much about the workplace experience. Around 4 years ago, he received the opportunity to lead the Center of Excellence with regard to workplace and corporate real estate management functions.
SAP is a large, international tech company headquartered in Germany. Its real estate portfolio stretches across 80 countries, with 1.8 million square meters of floor space. The CRE team has 355 people worldwide, with 80+ nationalities represented. In addition, a variety of third-party experts strengthen the CRE team. Overall, the real estate budget of SAP is roughly 660 million per year.
Corporate real estate strategy transformation
Listen to the following clips to gain insight into how Peter faces corporate real estate strategy at SAP.
“It’s amazing when you think of what companies were doing 10-15 years ago for their employees, compared with now. It’s been a substantial change and strategic workforce transformation.” – Peter Baumann
There’s no denying it: companies have become more focused on employee experience. Many real estate professionals see Covid as the trigger for this. However, Peter believes the strategic workforce transformation has been happening long before the pandemic. Companies have been integrating talent acquisition into their corporate real estate strategy, and going as far as opening locations in hot spots and improving their benefits packages. “Attracting and retaining talent has become a huge thing.”
Managing corporate real estate after the pandemic
At SAP, corporate real estate management has 3 main strategies: business, people, and location. Within these, there are 3 dimensions of focus: the employee experience, the customer experience, and the shareholder experience. Peter spends a lot of time elaborating on the employee experience in this clip. He believes a close relationship with HR is crucial. HR provides deeper insight into maintaining employee satisfaction while guiding the team through the realities of the pandemic. Over the past two years, large companies, including SAP, have had to adapt to flexible working styles. And, employees need to know what is in it for them: what are the benefits? What are the tradeoffs? What is the impact?
“Even though I’ve worked from home for the past 10 years, I was surprised by the magnitude of what it means to have everybody working from home.” – Peter Baumann
When the pandemic hit, we saw companies scramble to make working from home possible for employees. In this clip, Sabine points out that as a tech company, SAP was probably far more prepared than most. In Peter’s opinion, the company was well prepared for this major change, both operationally and technologically. However, it wasn’t as simple as that. It was true that SAP had well-integrated teams with plenty of information easily accessible on sites such as SharePoint, but the reality is that it wasn’t enough.
The change in mindset has also been considerable, according to Peter. In the past, at-home work programs and shared workspaces faced enormous resistance. Hierarchy, ownership, and status were the dominant values. Then, “out of nowhere, everyone was thrown in the same bucket;” everyone was working from home. And guess what, it worked.
“To me, it’s not important how many people are stuffed [into a space], because I don’t pay per workstation, I pay per squared meter.” – Peter Baumann
The traditional way to calculate how much space an office will need is to multiply the headcount by a sharing ratio. This strategy of managing corporate real estate is stale and doesn’t account for the realistic needs of an office. In order to better predict space requirements, Peter and the real estate team have created a comprehensive strategy. First, they take into account pre-pandemic utilization numbers. Second, they survey employees, asking how often they think they’ll be in-office post-covid. Lastly, they look at growth numbers from the location strategy.
With these numbers, they have a solid starting point. The next step is looking at personas. This is where they take into account what functionalities will be required: who they are, what they do, and what they might expect. Each person is then assigned a specific amount of productive space, in square meters. Multiplied by the number of employees, and you arrive at the number.
Conclusion for corporate real estate strategies
Employee experience is at the forefront of most corporate real estate strategies, and SAP is no exception. The CRE community has seen a significant shift toward an employee-first model since the pandemic began. Peter believes this happened long before Covid, but it wasn’t recognized to the same extent as it is now. SAP was more prepared than others for the sudden work-from-home model, but it still wasn’t enough. Looking into the future, Peter and the CRE team have built a strategy to predict office space requirements in new buildings. Their goal is to supply a consistent employee experience on a global scale. Of course, there are factors that will impact this. “The beauty of this model is that we provide a certain limitation”, and local teams can adjust accordingly.
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