In this week’s “In the Trenches,” Chris Saah chats with Scott Zimmerman, Chief Information Officer for CenterPoint Properties. Mr. Zimmerman is responsible for directing CenterPoint’s IT Department and aligning its information technology platform with the Company’s business strategy. He is also responsible for the Company’s business processes initiatives as well as its corporate marketing activities. CenterPoint Properties is focused on the development, ownership and intensive management of industrial real estate and related rail, road and port infrastructure.
CS: When we spoke a few years ago, one of the key things that you were doing was exploiting SharePoint for the purpose of aggregating your data so your people could find what they needed efficiently. Well, of course, many of us are doing that now and what we find is that now that the platform issues have been addressed, the quality of the data is what many now find challenging. I think what is significant about your story is the extent to which you have focused on process and matured your model to insure the integrity and quality of your data. If we were to measure what you are doing using the Capability Maturity Model, I think we would put you somewhere in the 4 to 5 range, because your processes are not only repeatable and well-defined, but they are also quite well managed, and you are constantly working to optimize them. I think what stood out for a lot of people in that conversation was how you had identified the governance issues and really worked those into the business so that you are insuring that the data is being populated and the data is good. Would you expand on that and fast forward three years and maybe talk about how you have taken that to the next level.
Zimmerman: Absolutely. In fact, as I’m speaking to you, I’m actually opening a SharePoint sight that we use here for managing and overseeing this. SharePoint is the repository in which we store our process documents and we are a very process oriented company. One of things we do is that we have our audit firm audit our processes on a regular basis. Being a private company we don’t need to have an external and internal distinction. We have those audits published for the entire company to see so we know who is and who is not complying and we reward and incentivize behavior based on it. So we have a SharePoint site which is our team collaboration site and all of our manuals are there and indexed so you can search them and so forth. We have a lot of reports and we keep a running score – like a score card – of how we are doing as far as compliance is concerned. So anyone can go there and view it and see that so far our average is about a 95.5% compliance rate. Actually, for 2012, we are doing a little bit better than that, we are at about a 97.9% compliance rate.
For example, one of the requirements is that we will send out a welcome packet to a new tenant within so many days. So these auditors, as crazy as it sounds, will go in and find the evidential matter that shows that we did in fact do that. Or if we are going to make sure the physical property information is correct and we say there are 200 car spaces at a given property, they will go out and count a representative amount of spaces and make sure that is right. That’s kind of a weird example, but it gives you an idea of the extent to which we want to insure that we are working appropriately and that data is correct.
Another example is that we now appraise our assets every year and we’ve identified 20 or so documents that are required to complete that appraisal. We’ve created utility that looks through the portfolio for outdated documents and will report back to those responsible which need to be updated in time for the coming appraisal. So, for example, if comps haven’t been collected on a property for a while they would get an alert letting them know they have to collect current comps for the asset. So that gives you an idea of how our governance and compliance process works right now.
CS: You’ve really taken the adage “What get’s monitored gets done” very seriously. Now what I also find interesting about your story is that, while this started off as a tool for greater operational efficiency so you don’t have people wasting time looking for the right information, this is now something that you feel gives you competitive advantage. Tell us about that.
Zimmerman: We are a small company of about 120 people and when we compete for business with some of the larger firms, the prospects will look at us and say, “You guys are not that big. How can you insure that you can deliver what we need?” We’ll point to these processes and tools that we have in place as a means of insuring that we can deliver.
The Federal government is a good example. We just recently undertook a significant project with them -about an $800,000,000 project – to build the new National Nuclear Security Administration facility. This is actually a highly secure, top secret building. And when they looked at our size they questioned if we could handle the assignment and we were able to point to our internal processes and our systems as an explanation for how were are able to stay lean and function efficiently, and that was part of the reason we won the assignment. There were other things – creative financing and so forth – but it definitely gave us a competitive edge.
We have actually found on several occasions, whether it is entering a joint venture with another company or seeking a line of credit, the other party finds great comfort in the fact that we can demonstrate to them that we are not just about getting sales but about running the company very efficiently and with great controls.
CS: Scott, we are running out of space today, but there is so much more to your story, I’d like to pick the conversation up in a later edition and talk more about how you’ve worked with the business to create a mature culture of excellence and also about this particular assignment with the NNSA.
Zimmerman: I’d love to.