Program Management Projects: Ericsson, Inc.Size 1997: $21.2 Billion Worldwide Revenues Employees: 101,000 (global), 2,000 (Dallas) Dallas Area: 1.2 Million Square Feet Buildings: 22
Assignment ERICSSON Ericsson Inc. (EUS) is the North American management unit of the Swedish telecom firm, LM Ericsson (LME). EUS manages the US operations of several major subsidiaries, each of which reports "in-line" back to Stockholm. LME grew by 125% from 1992 to 1995, with EUS accounting for 11% of global revenue.
In 1990, soon after PM completed a Strategic Facility Plan (SFP) for Ericsson's Network subsidiary, the fast-growing Radio business unit purchased a 10-story building and additional land for its own use in Richardson, Texas. Plans were made to concentrate regional Ericsson operations on that property, but these were abandoned in 1991. In the early 1990's EUS began its "Major Local Company" (MLC) initiative to consolidate support functions, leverage marketing opportunities across product lines, and present "one face to the
customer." By
1995, despite MLC, the legacy of autonomous subsidiaries continued to be reflected in a
fragmented and dispersed occupancy pattern.
A soft real estate
market had permitted an incremental pattern of expansion, and by 1995 EUS occupied 1.2
million square feet in 22 buildings in the Telecom Corridor area of north Dallas. This
adhoc approach became difficult to sustain as the market firmed and the dispersed
portfolio became increasingly unwieldy. PM was again retained to define and evaluate
EUS’s real estate alternatives, in the context of dynamic business and organizational
conditions as well as a changing real estate environment.
Approach
Interviews with senior managers of EUS subsidiaries indicated additional growth would primaily occur outside of Dallas, in newly designated marketing regions. A Dallas-area program of space needs for office, technical and support was developed, together with three strategies for accommodating those needs.
OutcomeEUS’s Real Estate director presented the SFP findings to LME counterparts in Sweden, and defined (for LME Board approval) a more specific project program
based on replacement space, apart from new growth. The Board approved
funding for
additional design and site selection activities, and eventually approved the initial phase
of a specific project program.
Implementation Support
In order to preserve confidentiality during the project's initial stages, PM assisted EUS with key planning activities:
1. Comparative Campus Tours: To identify best practices in corporate headquarter design.
2 Master Planning Specifications: Based on internal models and tour findings Ericsson defined performance specifications.
3. Site Selection: Using models and projected space requirements, Ericsson identified a site requirement of 100 acres. Infrastructure requirements to support technical
and office operations were also identified. A search
area was defined consistent with management
preferences for an established and imageable community. Over 50 sites in four cities were
examined. Relocation concessions and abatements were negotiated with three cities.
4. Design Team Selection: PM assisted EUS in identifying candidate design firms to participate in a paid design competition. This approach was used to identify a site, a building design team and an interiors team. The interiors groups will also investigate alternative work environments.
Published announcement from CoStar Group relating to our work.
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