Creating Resilience

Facilities Management Procurement Perspectives

Organization design, supply chain inflation and ESG are strategic imperatives

February 6, 2023 10 Minute Read



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A top question CBRE receives from facilities management (FM) procurement organizations: “What are my peers doing within their procurement departments?”

In this first-of-its-kind report, CBRE conducted a research study focused solely on FM procurement. CBRE surveyed FM procurement professionals on strategic topics such as outsourcing strategies, priorities, inflation, sustainability, diversity, risk and more.

This inaugural Facilities Management Procurement Perspectives report includes insights from 40 corporations across multiple sectors:

  • Life Sciences
  • Healthcare
  • Financial & Professional Services
  • Technology, Media, & Telecommunications
  • Manufacturing, Industrial & Logistics
  • Retail
  • Energy, Oil & Gas
  • Infrastructure & Public Enterprise

Our procurement sentiment survey findings show three key drivers shaping procurement strategies:

  1. Organizational design
  2. Supply chain inflation
  3. ESG imperatives

FM procurement and corporate priorities

Business leaders are paying closer attention to their real estate portfolios because the built environment is increasingly recognized as instrumental for powering supply chains, achieving sustainability goals, driving cost savings and fostering company culture. FM procurement is critical for achieving these objectives and maintaining operational efficiency amid supply chain disruptions and heightened concerns about economic growth.


Figure 1A: Goal that FM procurement leaders called their “top priority”


Source: CBRE Facilities Management Procurement Survey, 2022.

Figure 1B: Goals represented in the “top three priorities” for FM procurement leaders


Source: CBRE Facilities Management Procurement Survey, 2022.

Organizational design

FM organizational model

The majority of respondents (58%) outsource their FM services, a quarter out-task these services, and the rest self-perform in-house.

Outsourcing has become the dominant real estate delivery model across all sectors, according to CBRE Research.

Figure 2: What is your primary facilities management model?

Source: CBRE Facilities Management Procurement Survey, 2022.
1 Alliances with service providers who provide facility managers, call center services, accounts payable, engineering and supply chain management.
2 Major roles in-house, using out-tasking for tactical roles such as janitorial, engineering, etc.
3 Majority of staff in-house.

Understanding the supply chain benefits of outsourcing

  1. Innovation

    Traditional in-house models rely on single or dual sourcing for each service line, often industry-specific. By accessing and using all major suppliers across service lines, outsourcing providers gain early access to a broader variety of innovations. They can pilot with early-adopter industry sectors and, when successful, implement quickly across the full portfolio. Their experience and benchmarking capabilities lead to continuous improvement, increasing the likelihood of successful implementation.
  2. Supply chain efficiency

    In-house supply chain management is limited by scale constraints, as well as resources in specific categories and sub-categories. Outsourcing providers benefit from the scale of consolidating significant spend, building a strong team of resources to effectively manage the supply base and optimizing services. Existing relationships with all major players in the industry enable outsourcing providers to select suppliers across a company portfolio without losing leverage. They can develop sub-category-specific bid and contracting templates for further efficiencies.
  3. Risk and agility

    Managing a real estate supply chain on an individualized basis creates higher risk. This frequently leads to fluctuating costs or timelines, as self-perform models often rely on single or dual sources with limited leverage. If a supplier fails or continuously underperforms, in-house supply chain teams may have to initiate a lengthy assessment process for access to alternative suppliers, or switch to unvetted new suppliers at higher costs. Outsourcing providers can leverage their buying power and supplier relationships at the C-suite level to resolve performance issues. With multiple touchpoints, each vendor can often receive early warnings of potential failures. Outsourcing providers can implement replacement options quickly within existing contractual relationships by utilizing all the major suppliers across their vetted provider network. This helps control costs and risks. Outsourcing providers can also assume certain supply chain risks on behalf of clients, including performance accountability of third parties.


  4. Benchmarking capability

    Without conducting an extensive bid exercise, in-house supply chain teams can find it difficult to benchmark across a range of criteria such as cost, performance, risk and sustainability. However, outsourcing providers can leverage in-depth data aggregated across the business to quickly generate benchmarking figures. This can increase the speed of critical decision-making and help avoid unnecessary, time-consuming and costly requests for proposals or information.
  5. Expertise

    Companies that self-perform often have limited category expertise for non-core services due to their smaller scale, so they then operate at a generalist level. Relying on an outsource partner eliminates the need for the organization to invest in expensive, often underutilized, internal specialists that support non-core services. With increased resources focused on a single category, outsourcing providers have greater expertise and knowledge, even at a sub-category level. Those resources can work with suppliers to deliver optimized services at a significantly reduced cost, faster, and often without transition expenses. This expertise is important in reducing operational risk through strong subcategory-specific contract templates and supplier performance management.


Procurement as a strategic business partner

Procurement perceives itself as a strategic business partner to its client, Corporate Real Estate (CRE). As noted in Figure 3, the average level of alignment with CRE is a 6 out of 10. In fact, 40% of respondents noted high engagement. However, 8% of FM respondents cited no relationship at all with CRE.

As FM procurement leaders seek to improve their relationships with their CRE clients, CBRE recommends procurement teams move beyond running sourcing events. They must provide the subject matter expertise to re-design and optimize services. Taking that approach is most effective for driving cost savings, quality and innovation.

Figure 3: What level of engagement does procurement have in developing real estate and facilities management strategy?


Source: CBRE Facilities Management Procurement Survey, 2022.

Capital budgets for facilities

Two-thirds of respondents have some alignment and coordination with FM capital budgeting and expenditures.

Figure 4: How tightly aligned are the teams and strategies for managing procurement of FM capital expenditures and FM operating expenses? (e.g., procurement of new HVAC equipment versus HVAC services)


Source: CBRE Facilities Management Procurement Survey, 2022.

“The fact that only 22% of organizations indicate tight alignment is not surprising to me, as the CapEx and OpEx strategies and budgets are often run by different functions. Our experience shows that reducing total lifecycle costs starts with integrated category strategies across equipment and services, and gaining alignment with the FM team on the optimal maintenance strategy.”
– Bob Bruning, Chief Procurement Officer, CBRE

Supply chain inflation

Over the past two years, the world has experienced skyrocketing global shipping and labor costs, a multitude of logistics issues that caused shortages of goods and materials, and steep rises in energy costs. This supply chain instability added complexity and uncertainty around service delivery and costs for enterprises. Although some inflationary pressures have recently eased, we expect these risks will challenge global supply chains in the near term, so FM procurement teams must remain diligent through this volatility.

The pandemic has revealed just how fragile our global supply chain can be. Not surprisingly, the majority of respondents believe that supply disruption is the #1 supply chain risk for their company. Labor shortages and inflation round out the top three risks (Figure 5).

This aligns with CBRE’s recent research: labor and logistics issues are causing major delays across the supply chain. Currently, 77% of work order delays are attributed to unavailable materials. As a best practice, companies are encouraged to standardize purchasing and equipment configuration, forward-buy critical spares, optimize inventory management, and engage with suppliers to understand their dependencies and delivery risks.1

Figure 5: In your opinion, what are the top three FM supply chain risks for your company?


Source: CBRE Facilities Management Procurement Survey, 2022.
Source: CBRE Facilities Management Cost Trends Index, CBRE April 2022.

As seen in Figure 6, many respondents believe there is a higher likelihood of FM supply chain risks in the next two years. However, the majority of respondents also feel fairly confident their company can identify and mitigate these risks.

Figure 6: Compared to the past three years, how would you forecast FM supply chain risks in the next two years?


Source: CBRE Facilities Management Procurement Survey, 2022.

Figure 7: How confident do you feel about your company’s ability to identify and mitigate FM supply chain risks?


Source: CBRE Facilities Management Procurement Survey, 2022.

Inflation Mitigation

Inflation continues to grip the world’s economy, and procurement teams are facing tremendous cost challenges, with 70% of respondents seeing a high impact on FM supply chain.

As a result, many companies are brainstorming creative ways to mitigate rising costs. A common strategy procurement organizations use to reduce costs is competitive sourcing or direct negotiations. More than 90% of respondents have used these strategies. Other strategies include service-level optimization, leveraging innovation, seeking alternative products or services and smart contracting—designed to limit or delay inflation adjustments.

Figure 8: What level of impact is inflation having on your FM supply chain?


Source: CBRE Facilities Management Procurement Survey, 2022.

Figure 9: What are the most common strategies you have deployed or are currently deploying to mitigate inflation risks? Please select all that apply.


Source: CBRE Facilities Management Procurement Survey, 2022.

"Most procurement organizations have been fighting inflation for the past several years, as the costs of COVID-related supplies sky-rocketed due to supply shortages, and the costs of cleaning services rose due to high demand. Now that there are global inflationary pressures across the FM spectrum, procurement organizations are leveraging a wide variety of strategies to mitigate pricing pressures and keep budgets in control. At CBRE, our team has expertise on 12 proven inflation-reduction strategies that we selectively deploy depending on the situation."
– Bob Bruning, Chief Procurement Officer, CBRE

ESG imperatives

Environmental, social and governance (ESG) regulations are becoming increasingly stringent, and organizations are under pressure to demonstrate tangible progress toward decarbonization. Indirect emissions (Scope 3) include supply chain components and tend to be the largest part of a company’s carbon footprint.

The attention to ESG initiatives creates an opportunity for FM procurement leaders to demonstrate leadership on achieving emissions reductions and supplier diversity targets. Scope 3 emissions reporting, greener sourcing, and vetted supplier networks that align with ESG criteria are just a few of the ways FM procurement teams can deliver desired outcomes for their organization.

Supplier Management

The majority of respondents use multiple supplier management tools to hold suppliers accountable for their performance, the most common being KPI scorecards that illustrate historical performance trends and identify opportunities for improvement. Many companies are adopting performance-based incentives (contracts with economic incentives or penalties) to ensure a high level of quality and service.

Exceptional performance of suppliers in areas such as cost, quality, service and safety are critical. Using effective Supplier Relationship Management (SRM) programs, leading organizations will have their procurement teams proactively manage their most important supplier partners to ensure they are not only maintaining but improving the supply base performance, ensuring delivery of superior and differentiated value to clients.

Through successful SRM, procurement organizations can develop a world-class supply chain, providing mutual value and growth opportunities to partners that meet or exceed expectations, combined with a continuous improvement and development approach for those that need stronger performance. Where partners continue to underperform, procurement teams must make decisions on whether to continue those relationships.

Measuring partners in other areas such as innovation, sustainability and diversity will rise in importance and will increasingly be built into procurement teams’ sourcing decisions as clients expect sustainable supply chains as a means of achieving their ESG goals. A more integrated approach, including closer alignment with client expectations, will also become standard practice. Technology will allow procurement teams to measure and assess the impact of supplier performance against these KPIs.

Figure 10: What are some of the approaches you are using to hold suppliers accountable for their performance? Please select all that apply.

Source: CBRE Econometric Advisors, CBRE Strategic Investment Consulting, April 2022.

Environmental Sustainability

The past several years have seen a marked increase in mandates around corporate responsibility and sustainability. As a result, ESG issues are top of mind for commercial real estate leaders. A majority of respondents feel their company’s real estate portfolio and related facilities management operations are major contributing factors to the company emissions.

The vast majority of FM procurement teams are engaged in meeting greenhouse gas (GHG) emissions reduction commitments—with seven out of 10 respondents engaged in at least one aspect of GHG emission reduction commitments.

Nearly three-quarters (72%) of companies surveyed have defined sustainability commitments (Figure 12). Among those companies, almost all have publicly stated their commitments, with many targeting 2030 as their goal for achieving net zero.

Figure 11: In your opinion, how much of a contributing factor to your company’s emissions is your real estate portfolio and related facilities management operations?


Source: CBRE Facilities Management Procurement Survey, 2022.

Figure 12: Has your FM procurement team been engaged in meeting GHG emissions reduction commitments?


Source: CBRE Facilities Management Procurement Survey, 2022.

Public zero-carbon commitments are increasingly common: More than 30% of global Fortune 500 companies now say they have either achieved a climate goal or are publicly committed to doing so by 2030—a significant increase from just 6% in 2016.2

A few of the respondents’ publicly stated commitments include:


Most clients include sustainability as a part of their supplier selection and management, thereby ensuring their corporate sustainability extends to relationships with suppliers and subcontractors.

Figure 13: Do you include sustainability factors in your supplier selection, screening and management?


Source: CBRE Facilities Management Procurement Survey, 2022.

CBRE has observed three trends driving this increased commitment to sustainability:

  1. Pressure from employees who expect employers to be sustainable3
  2. Tightening regulations, such as the European Union’s Corporate Sustainability Reporting Directive (CSRD)
  3. Pressure from investors seeking to safeguard their returns against climate risks4

These trends are compelling FM procurement teams to proactively build supply chains that are resilient to climate change. Failure to do so could create downstream risk from customers who expect higher sustainability performance.

Source: Real Estate's Role in the Environmental, Social and Governance (ESG) Agenda, CBRE, September 2021.
Source: CBRE Core Talks,
Source: Panel discussion, U.S. Sustainable Investment Forum Sep 2022.


Recognition of these trends and risks is driving further adoption of climate goals for real estate occupiers5 and investors6. Each new commitment will require FM procurement teams to adapt policies, processes, technologies and supplier selections to align with those goals.


Procurement teams are typically the natural “owners” of suppliers’ emissions data, and therefore are responsible for many of a company’s decarbonizing commitments. Procurement teams will need to harness technology to more accurately identify emissions hot spots in the supply chain, driving the Scope 3 strategy. Overcoming challenges on data, transparency, engagements, and changing procurement processes and tools are required to meet net-zero commitments.

Beyond emissions reductions, FM procurement teams will increase focus on integrating physical climate risks (e.g. disruptions caused by extreme weather), transition risks (e.g. energy scarcity), and social risks (e.g. living wage) into the overall sustainable supply chain strategy. In addition, FM procurement has a role to play in addressing non-climate-related sustainability risks, such as biodiversity, water conservation and illegal logging.

Figure 14: Compared to other purchasing spend categories within your company (e.g., direct materials, indirect materials, indirect services), how much progress have you made in growing diverse-supplier spend within your FM supply chain?


Source: CBRE Facilities Management Procurement Survey, 2022.
Source: Spring 2022 U.S. Office Occupier Sentiment Survey | CBRE.
Source Importance of ESG in real estate investment worldwide 2022 | Statista.

Supplier Diversity

An important component of ESG, diversity, equity and inclusion (DE&I) is also a growing focus for many companies.

Asked to rate progress on DE&I goals, respondents indicated making slightly more progress in FM compared to other categories. This aligns with CBRE’s experience as some of the most essential categories (e.g., cleaning, landscaping, repairs & maintenance) have well-established diverse supply markets.

Nearly all respondents have supplier-diversity targets in place, with the most common diversity spend target in the 5-10% range (Figure 15).

Figure 15: Based on total or addressable spend, what level of supplier-diversity targets do you have for your FM supply chain in 2022?


Source: CBRE Facilities Management Procurement Survey, 2022.

Companies have been employing various strategies to increase supplier diversity, with the most common being monitoring Request for X (RFX) events to ensure diverse supplier inclusion (Figure 16). In addition, many companies are expanding their diversity goals each year to provide a new baseline for reaching and surpassing supplier-diversity objectives.

“Companies rate their progress on supplier diversity favorably and their spend targets are considerable. At CBRE, we have been able to achieve over $3.2 billion in annual small and diverse spend while realizing cost savings and high-quality capabilities. As conditions evolve, companies may have to increase investments or pay a premium to achieve their goals.”
– Bob Bruning, Chief Procurement Officer, CBRE

Figure 16: What are the most common strategies you have deployed or are currently deploying to increase supplier diversity? Select all that apply.

Source: CBRE Facilities Management Procurement Survey, 2022.

What now?

Our 2022 FM Procurement Perspectives survey covered many important topics, but three main themes emerged:

  1. The importance of organizational design in meeting business and real estate objectives
  2. Rising prices for goods and services are prompting strategies to mitigate the impact
  3. The emergence of ESG topics as procurement leader priorities

As we look forward to 2023, CBRE anticipates the following trends related to these topics and recommends strategies on how to respond.

  1. Organization

    The survey indicated that critical aspects of FM procurement success are stakeholder management, collaboration across functional departments and optimization of the real estate delivery model. Outsourcing is growing tremendously due to the advantages of that model. It should be evaluated to determine a fit for a company.

    Businesses already operating an outsource model should commit focus to governance and supplier management to maximize the relationship’s benefits. Like ESG, we see the outsourcing market growing well into the future. So will companies leveraging global relationships and consolidating service providers.

    Lastly, return-to-office (RTO) plans will continue to influence the 2023 strategy. Most procurement teams have been working on RTO support for three years, but office utilization has not yet normalized. We expect companies will begin to better understand occupancy rates and office patterns in the next two years, triggering a need for procurement and real estate leaders to devise strategies to meet the new reality. Office designs, amenities and FM services will all need reengineering to meet requirements in this new era.


  2. Inflation

    Cost controls remain a top priority for all procurement organizations as economic uncertainty persists. With a moderate recession on the horizon in 2023, mitigation strategies will be essential until market conditions and supply chains function normally, likely late 2024. These strategies must go much deeper than running RFQ events. Now is the time to bring category expertise to bear and utilize knowledge, creativity, innovation and supplier partnering to unlock hidden value and cost efficiency.

  3. ESG

    ESG has been an element of procurement management for over a decade, but recently rose to the top of leadership priorities. And while the ESG umbrella covers a wide range of topics, we are seeing three main areas of focus: responsible procurement, supplier diversity and environmental sustainability. While certain procurement fads will come and go, ESG will remain a strategic priority for decades to come. Businesses must ensure they can measure outcomes, set improvement goals and lobby leadership to invest in the company’s ESG agenda.


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