As we discussed yesterday, facilities are the second-highest expense for large companies—and many are providing more workspace than they really needed.

There’s a real opportunity in the realm of virtual office space. Today, we’re going to look at 11 ways companies can reduce corporate real estate costs without sacrificing productivity. These suggestions come from New Ways of Working panelist members.

1. Start with a fact-based discussion about utilization and mobility. Conduct research to understand the existing situation, such as utilization, rather than rely on assumptions.

2. Consolidate facilities. Enterprises can save overhead and lease costs by combining data centers, lab space, demo and training centers.

3. Strengthen/streamline supply chain - accomplish more through supply chain optimization-reducing the number of suppliers/contractors to cut administrative costs.

4. Drive workspace design based on utilization studies. Track who works where and how often. Develop ratios to help allocate workspace. For example, knowledge workers might be out of the office 40 percent to 70 percent of the time, giving a company an opportunity to share workspaces.

5. Optimize workspace size based on type of work performed.

6. Create policies giving people choice about where they work.

7. Ensure the technology will support people wherever they choose to work.

8. Establish processes for developing service level agreements with employees

9. Update performance evaluation process to make it performance-based rather than traditional activity-based.

10. Set up mechanisms so team members can review workloads and balance them within teams.

11. Reinvest a portion of the real estate savings into improving the workplace.

You can see how the virtual office space touches on a number of these strategies. When a company consolidates facilities, virtual offices can fill in the gap. Giving people a choice about where they work could lead to virtual office space considerations. You get the picture. As you seek to reduce your real estate costs, seek to understand all the benefits of virtual office space.