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How JLL uses procurement to drive new revenues

PL Staff

By exploring new opportunities and leveraging its experienced resources, JLL's sourcing and procurement teams are leading the way in the corporate and commercial real estate industry. Read their story to find out what they're doing, how they're doing it and what's next.

Image: 360b / Shutterstock

The corporate and commercial real estate industry is changing significantly. New flexible offerings are disrupting the market, but rather than be shaped by these changes, JLL is leading the way, offering a diverse range of management, advisory and consultancy services to its customers.

In recent years, JLL’s Sourcing & Procurement team has been exploring new opportunities to monetize ad hoc requests for services, leveraging its experienced resources to tackle specific issues – perhaps consolidating suppliers in a specific category or innovating a catering offering.

What did they do?

JLL offers a comprehensive advisory and consultancy service for its customers that covers integrated facilities management, property and asset management, project development services and transaction management.

The JLL Sourcing & Procurement team identified opportunities to add scope to the above services by leveraging the platform’s category/subject matter expertise, buying power and extensive supplier network. The team then integrated this into JLL’s broader offering.

There were five key elements to this approach:

  • Developing the business case
  • Establishing a delivery team
  • Creating the advisory services offering
  • Forming a revenue model
  • Educating and training the sales team

How did they do it?

Taylor Tisdale, JLL’s Sourcing Services Principal & Director of Strategic Sourcing, set up a new team – branded “Sourcing Services” – to manage every aspect of the service, including pricing methodology, marketing & communications strategies and delivery of the advisory services.

The Sourcing Services offering

With sourcing at its heart, the team offers customers help with strategy development, delivery of specific sourcing projects, creation of playbooks and processes, market bid execution and supplier performance management strategies.

For each project, the team flexes their sourcing resources to not only deliver value, but also effectively manage client and stakeholder expectations – pulling in category experts as it relates to the customer’s needs and deliverables. With this in mind, Sourcing Services developed a ‘menu’ of service capabilities with clear outputs.

Revenue model

Alongside the service menu, the team developed a flexible pricing framework related to the different advisory options on offer, including:

  • Fixed fee – A fixed fee that is based on the scope of the project and its deliverables.
  • Shared savings – This is a variable fee based on savings and its dependent on the return on investment.
  • Combination – This is applied to complex projects that entail a high proportion of spend and is a combination of both a fee and shared savings.
  • Other – This is related to any ongoing support the team provide and can include hourly rate charges

Sales team support and training

One of the key tasks was to offer training and support to the business development team so they knew exactly what was on offer and could identify the customers to engage.

Taylor created marketing collateral, including sales decks, fact sheets, and case studies to showcase the offerings, benefits and pricing. He used real-life success stories to highlight results and developed a series of qualifier questions the team could ask prospective clients.

What next?

Having seen revenues grow through this procurement advisory offering of between 30-40% annually since the 2015 inception, the team is scaling up and driving even more revenue for the business.

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