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Case Study

Duke Energy: long-term relationship guides outsourcing evolution to soaring success

​After a significant acquisition and in a time of energy deregulation by the federal government, Duke Energy needed to reduce costs.

Duke Energy identified outsourcing facility management as an opportunity to save millions of dollars annually. In 2004, they elected to partner with JLL after a competitive bid process due to JLL's knowledge of Duke's business practices and the ability to be a true strategic partner. Duke enlisted JLL to reduce operating costs, optimize their real estate portfolio and increase overall efficiency.

First, JLL revealed to Duke how they were missing out on opportunities to analyze and optimize their 13.5-million square-foot real estate portfolio, because they did not have people stationed in strategic real estate roles. JLL encouraged Duke to move away from their four-region mentality and refocus on economies of scale. Duke's four real estate regions had inconsistent processes and programs. The remapping of Duke's four-regions allowed Duke to reallocate technicians to one specific region to perform maintenance on an as-need basis, reducing regional overlap.

Second, JLL recommended that Duke's real estate team shift their remaining tactical responsibilities to JLL, freeing up Duke real estate staff to focus their expertise on strategy. This arrangement gave JLL full accountability for the management of their projects and properties, while enabling Duke to reallocate employees to meet their core competencies.

Understanding Duke's emphasis on safety, JLL rolled out various safety programs focused on creating safe work cultures, which helped increase reliability and reduce risk by stabilizing and improving critical facility redundancy. The roll-out of the safety programs resulted in OSHA TICR rates of under 1.0 for FM work as well as improved critical facility redundancy, taking the facility from Tier 1 to Tier 3+.

This strategic partnership has achieved more than $40 million in savings over the last 10 years by delivering on the planned initiatives and leveraging total spend within the portfolio.  The implementation of low- or no-cost energy savings and a capital program focused on long-term energy usage reduced annual electrical usage by 5%.

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