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Reducing the risks that come with managing 3rd and 4th party contractors

by Charlie Trumpess

 25th November 2014 10:09 am

Maureen Ehrenberg, Executive Managing Director, Integrated Facilities Management, Americas  Jones Lang LaSalle was recently interviewed by Gregory J. Millman from the Wall Street Journal. With an extensive network of third-party suppliers (many of which in turn have subcontractors) Ms Ehrenberg discussed with Risk & Compliance Journal the company’s approach to managing such supply chain risks.

The interview offers some really interesting insights in JLL’s complex global supply chain and how risks have changed for Jones Lang LaSalle today – from being more of an agent several years ago, to now ‘taking on principal risks, and the owner relying on us for all that would involve vendor risk.’  Not only are JLL carrying risk for third party suppliers, but also fourth party risks – be it employment due diligence, information-security checks, to levels of mark-up.

Here in the UK, Modern Networks work with many Real Estate clients, particularly within the managed services groups, and we understand some of these sector specific challenges. The point around multiple mark-ups and self-performing work resonates, this not only adds additional risk and cost, but it’s also likely to have an impact on the quality of service provided.

We’ve created a range of sector specific services, that deliver all of the IT and Communications technology services that a property manager would need, with contractual arrangements designed to meet the needs of the managed services provider and property client. Our clients tell us that consolidating these services into one provider dramatically improves the quality of the service delivered (if self-performed), but there’s also huge benefit’s through application of standards across the estate, mobilisation for new portfolios, and a reduction in the overall number of suppliers. Some of our sector specific case studies are here – http://www.modern-networks.co.uk/modern-networks-providing-it-as-a-managed-service-at-citypoint/

Read the whole interview here

http://blogs.wsj.com/riskandcompliance/2014/11/03/how-jones-lang-lasalle-manages-third-party-risk-in-real-estate/