IAMC Dispatch
Vol. 5, No. 12, December 2006

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A survey conducted by IT management consultancy Quint Wellington Redwood may have some implications for other parts of the enterprise, including real estate. It reveals that for 75 percent of companies, cost reduction is still the most compelling reason for IT outsourcing. However, outsourcing to reduce costs has a negative impact on commercial innovation . "because companies tend to enter into inflexible outsourcing contracts without allowing freedom for innovation, or at least failing to document it." One way of combating this, as real estate has found, is more selecting outsourcing of certain IT items, the survey found. Of the innovation finding, IAMC Research Director Joel Parker says, "If that were also true of corporate real estate, it would be an important finding that should alert corporate managers that corporate real estate outsourcing can have non-monetary costs that could retard a company’s progress toward its long-term goals. The IAMC study "Outsourcing in the Corporate Real Estate Function — A Manufacturing Perspective" finds that 71 percent of sampled manufacturing companies outsourced to reduce costs, compared to 57 percent of sampled services companies." Among the questions that corporate real estate practitioners may want to ask themselves, says Parker, are "When we outsource part or all of corporate real estate, does the function’s innovation suffer?" "What aspects of innovation are delayed or lost?" and "How might the delayed or lost innovations affect the company’s long-term success?"



Merging functions as a result of M&A activity may be even more complex than outsourcing them. So the "’cultural viruses’ that can torpedo multi-billion dollar deals" can loom large, says Cartus Corp. (formerly known as Cendant Mobility), a part of Realogy Corp. (formerly known as Coldwell Banker). So Cartus has introduced the following "Six Solution Pillars" for cultural integration:

  • Address "soft" challenges early
  • Pick and develop global teams wisely
  • Assess your own set of cultural viruses
  • Manage the "mental merger"
  • Leverage the language and lexicon opportunity
  • Cultivate culture

"Cultural understanding is as much about process as it is about content," says Stéphane Brahy, who leads M&A Solutions with Cartus and is the author of a recent article on this topic published in the Journal of Organizational Excellence. "By simultaneously addressing hard and soft challenges, organizations substantially increase their odds to succeed."



Wondering what the U.S. Securities and Exchange Commission has in mind for reforming Sarbanes-Oxley compliance complexity? Check out SEC Commissioner Paul S. Atkins’ speech to the AeA (formerly the American Electronics Association) at its financial conference in Monterey last month.



Fixing health care is something on everyone’s mind. But a bunch of big companies, in concert with NAM, took steps this week to turn thought into action by launching a Web-based system, Dossia , intended to help employees better manage their health care, improve communications between doctors and patients, and reduce inefficiencies in the health care system. "In manufacturing, innovative technology streamlines operations resulting in reduced costs, increased efficiency and better quality — all necessary to compete in a global marketplace," said NAM President John Engler. "Health IT offers the same benefits for health care." Participating companies include Applied Materials, BP America, Inc., Intel Corporation, Pitney Bowes and Wal-Mart.



NAM is also wanting to fix something else: what it sees as the Chinese yuan’s undervaluation. Its U.S.-China Business Relations Task Force met this week with Treasury Secretary Henry Paulson, Commerce Secretary Carlos Gutierrez and U.S. Trade Representative Susan Schwab.



Vietnam is the latest hot ticket in Southeast Asian industrial development. If you’re surveying that territory for a corporate investment, one working paper worth a stop is an August 2004 report titled "Vietnamese State-Owned Enterprises: ‘Real Property," Commercial Performance and Political Economy," published by the Southeast Asia Research Centre of the City University of Hong Kong.



Looking for insights into how to handle the countdown to the new REACH chemical industry regulations in the European Union? There is no shortage of guidance, including these hyperlinked reports and bulletins from Deloitte, Baker & McKenzie Europe and Zurich Financial .



Surveying North America for innovation centers? It may be worth your while to peruse the Milken Institute’s Technology Transfer and Commercialization Index 2000-2004 , which evaluates 135 schools in NAFTA territory based on their patents issued, licenses execute, licensing income and startup support. Caveat: Results are based on which schools chose to respond to a national association-led survey, and therefore omit several lead players. But here’s a quick Top 20:

  1. Massachusetts Inst. of Technology
  2. University of California System
  3. California Institute of Technology
  4. Stanford University
  5. University of Florida
  6. University of Minnesota
  7. Brigham Young University
  8. University of British Columbia
  9. University of Michigan
  10. New York University
  11. Georgia Institute of Technology
  12. University of Pennsylvania
  13. University of Illinois, Chicago, Urbana-Champaign
  14. University of Utah
  15. University of Southern California
  16. Cornell Research Foundation., Inc.
  17. University of Virginia Patent Foundation
  18. Harvard University
  19. University of California, San Francisco
  20. North Carolina State University



Are you taking advantage of what you’re paying for? "ATE Centers Impact 2006-2007," a report published in late 2006, highlights the 33 Advanced Technological Education (ATE) centers sponsored by the National Science Foundation in the U.S. Taxpayers have invested nearly $437 million in ATE since the program began in response to Congress’s passage of the Scientific and Advanced Technology Act of 1992. As of September 2006, there were 205 active project grants and 33 center grants. The federal government appropriated $45.5 million to the ATE program in fiscal year 2006, and the NSF requested $46.5 million for ATE in FY 2007. Over the life of the program, more than 730 ATE grants have been awarded.



Shedding further light on higher education’s impact on industrial development are these charts from the National Science Foundation dissecting doctorates awarded over time, by state and by specialty. Close readers will notice how many of the top-ranking states in the science and engineering category are also top-ranked in Site Selection’s annual Governor’s Cup tally of new plants and expansions.

 
 
 
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