When a facilities manager begins to apply FM techniques to solve business problems, the case for FM is made. It is a simple matter of demonstrating a quantifiable return on the investment required.
A successful FM operation consists of three key activities:
- The achievement of a proper understanding of the needs, wants, drivers and goals of the organisation concerned and processes to ensure that this is continually reviewed to take account of changing circumstances;
- The development of an effective facilities solution to support those needs and wants, properly address the drivers and contribute towards the achievement of goals, both short- and long-term;
- The consistent and reliable delivery of that solution in a managed, measurable and sustainable manner.
CSR matters to major occupiers
Major occupiers obviously have the most to gain, which is why FM is most firmly established in large corporate organisations and public bodies. With a massive property portfolio, even the most marginal improvement in efficiency or effectiveness can be of great significance. Major property occupiers will already have a facilities department or individuals performing the FM function within another department like property, finance or human resources.
The challenge for facilities managers in giant corporations is the difficulty of maintaining focus on the big issues when circumstances seem to drive them towards the creation of a bureaucratic empire for the management of trivia. Systems and processes must be developed to ensure reliable service delivery making use of the economies of scale, not suffering because of the size of the problem. This releases the facilities manager's time.
The boards of big businesses are not interested in the day-to-day details of maintenance and security processes, at least not unless it affects them personally. However, they are very interested in issues like business continuity, productivity and the corporate social responsibility (CSR) agenda.
CSR has many definitions, but essentially it concerns a company's obligation to be sensitive to the needs of all of its stakeholders. A company's stakeholders are all those who are involved in or affected by the company's decisions and actions, both locally and globally. These include employees, customers, suppliers, communities, subsidiaries and affiliates, joint venture partners, investors, shareholders and many more.
Investors, and increasingly governments and consumers, are becoming ever more insistent that businesses take into account not just financial and economic factors in corporate decision making, but also the social, ethical and environmental consequences. In reality, much of this means FM. Issues like energy, waste, local employment and community affairs, supply chain management and sourcing are all elements of the FM contribution to the CSR agenda. So are the work/life balance argument and the provision of an effective working environment that supports wellness, safety and security aspirations.
The facilities manager who wants to capture the imagination of the board in a large organisation nowadays must be able to demonstrate an effective track record in the CSR arena and a positive forward programme for improvement.
Cost benefits countOn the other hand, the average sized business is more likely to be attracted to FM by the efficiency argument. Cost reduction is a key driver for all organisations and the medium-sized player will benefit directly from a well co-ordinated facilities strategy.
Simple things like the development of centrally procured and managed stationery will deliver a 20 per cent saving with very little effort. The procurement of furniture and other workplace-related goods may not be the facilities manager's direct responsibility in many organisations, but a proactive facilities manager will find ways to influence policy in this regard and there are many role models to follow.
Far greater savings can be generated by taking a serious look at space. With the cost of renting or buying accommodation probably accounting for 60-70 per cent of total occupancy costs, a tiny reduction can generate huge sums. A strategic programme to release space (or to prevent the acquisition of more) can be the most significant thing any facilities manager can undertake. And the opportunities are there, with 40-60 per cent of the workstations unoccupied in most offices at any given moment in time. Reducing that by just 10 per cent equates to big money that goes straight to the bottom line. Hence the focus given to solutions such as hot-desking, home-working and shared space.
The third area for obvious attention has to be that of sourcing. These days the outsourcing of facilities services has almost become a default position, but it isn't always the best or the cheapest solution. In some circumstances it can be much more efficient to deliver certain services using in-house resources and avoiding the cost of management, overheads and profit that supply chain management inevitably brings.
However, a strategic approach to outsourcing cannot ignore the multitude of different contract models and approaches now available: bundling, service integration, use of purchasing power and a flexible workforce, and an expanded breadth and depth of the outsourcing paradigm can all bring efficiencies. The transfer of headcount and increased access to specialist expertise and systems also bring quantifiable value.
A universal offeringFor those with a more modest property portfolio, the performance of the facilities function is likely to be fragmented, with no clear lines of ownership below the executive level. However, there is still much that smaller businesses can gain from the adoption of the principles and techniques developed by professional facilities managers. Increasingly there are opportunities to tap into the activities of larger players or to work in partnership with others to emulate their success.
While such organisations may never be able to justify the creation of a dedicated FM function, there is no reason why the individual service owners should not benefit from the ever-developing FM pool of good practice.
Meanwhile, the continued expansion of the facilities service outsourcing market and the increasing trend towards a total FM model is stimulating a steady stream of new entrants, many of whom are targeting smaller businesses who wish to avail themselves of the benefits that good FM can bring.
Facilities outsourcing has a great deal of appeal to new and growing businesses that have no existing FM infrastructure and wish to avoid expenditure on what are seen as non-core activities. The development of supporting systems and processes has already been completed by the early adopters of FM as a management discipline and the emergence of a supply chain willing to apply them in any situation is meeting the needs of this growing market sector.
The most significant barriers to universal adoption of FM principles in the management of buildings and workplaces are a limited general awareness of the opportunity on offer, inconsistent sharing of best practice examples and the shortage of appropriate skilled resource to implement them.
Proven benefitsIt is true therefore to say that there is a case to be made for the adoption of FM practices in all organisations to a greater or lesser degree. The benefits of intelligent procurement and the impact of a well-designed workplace have been demonstrated by credible role models over three decades. The maturing facilities outsourcing sector is expanding to provide a wider range of solutions than ever before.
Facilities expenditure represents a significant percentage of any organisation's cost base. Estimates of the total market size still vary wildly due to inconsistent sector definition but could constitute as much as 8 per cent of the UK gross domestic product. Despite this, there has been little in the way of government support for the increased development and adoption of FM as a professional discipline.
The growth of FM over the last 30 years has been led by major organisations seeking solutions to real issues and developed on a wider basis as a direct result of easily perceived financial savings. The increasing sophistication of the function and the economies of scale thus generated present the opportunity for universal benefit. However, this will not be fully realised without adequate investment in knowledge sharing, skills enhancement and positive promotion of the business case for FM as a professional discipline.
Martin Pickard CFM FBIFM is the Principal of The FMGuru Network, providing training and consultancy services to the FM sector. Visit www.fmguru.co.uk
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