Increased productivity and cost cutting will be significant factors in this challenging economic climate.  Richard Fisher, of Qube, explains how Facilities Management can be at the forefront of ensuring businesses sustain themselves in the trying times ahead.

In recent months we have had a torrent of bad news. People are reeling from never-ending reports of financial and economic disasters. Businesses of all types and sizes have had to tighten their belts in order to weather this difficult period.

In any economic crisis, there are organisations which survive and even thrive. One way they do this is by taking proactive steps to increase efficiency and cut costs. Facilities Management can play a key role in achieving these goals.

Facilities Management covers many areas and most Facilities Managers have a wide range of responsibilities. There are, however, three key areas which are central to almost all areas of FM and which present many opportunities for cost savings; maintenance, help desk and procurement.

Planned maintenance

There are two types of maintenance, planned and reactive. In the medium to long term, planned preventative maintenance is almost always more cost-effective than reactive maintenance. Putting in place a program of planned preventative maintenance should be a priority for any organisation interested in saving money. The cost of a planned preventative maintenance program is often recouped within a few months through the savings which result. Some of these savings include lower repair costs, less downtime, less disruption in the day-to-day running of the organisation, fewer purchases and improved safety.

Minimising the cost of reactive maintenance

A successful planned preventative maintenance program will reduce the need for reactive maintenance, but there will always be occasions when unexpected breakdowns occur. There are a number of ways in which the cost of reactive maintenance can be minimised.

• Develop a library of standard procedures and special instructions
• Mobile technology, allowing ease of communication with engineers in the field, can be an important factor in improving the speed and efficiency with which repairs are carried out. Engineers become more productive and repair and maintenance tasks cost less to complete
• Monitor repeat repairs, identify trends, take appropriate action on preventative maintenance (e.g. replace equipment which shows repeated faults)
• Ensure the Help Desk is working to maximum efficiency
• A good Computer Aided Facilities Management (CAFM) system will provide engineers with all the information they need (e.g. maintenance history, standard procedures) to carry out repairs and maintenance quickly and efficiently.

Help Desk

In most organisations, the Help Desk is the heart of Facilities Management activity. The cost of running the Help Desk is often one of the largest items of FM expenditure. Reducing this cost has a direct and usually very significant impact on the FM budget and on the company’s bottom line.

One way of assessing the cost-effectiveness of the Help Desk is through measuring the cost of administering each call. There is considerable variation between different organisations, with the administrative cost per call up to four times higher in the least efficient compared to the most efficient companies. There is therefore considerable scope for improvement in most
organisations.

There are three main ways to improve the cost-effectiveness of the Help Desk. These are:

Reduce the number of calls

Calls to the Help Desk are considerably reduced by the use of an intranet-based CAFM system. A good system can be used to report faults and also to enquire about the progress of a task. Available 24 hours a day, it gives users immediate access to the system. It also significantly reduces the number of follow-up calls by automatically updating users on the progress of a job (note that automatic updates are not exclusive to intranet systems – they will also be generated by good Help Desk software).

Our experience indicates that when intranet functionality is available to staff, and they are fully trained in how to use that functionality, around 80% of the requests will switch from
telephone or email to the intranet. The number of calls to the Help Desk is reduced by eliminating, or at least reducing duplicate calls. When a problem affects a wide area there will be several people who report it, and on a busy help desk some of these duplicates may well be missed. However Help Desk software which is configured to detect duplicates will go a long way towards eliminating wasteful duplicate calls.

Reduce the cost of dealing with each call

Calls to the Help Desk can be speeded up considerably when Help Desk staff have access to accurate and relevant information. This includes information such as service history, a risk rating, supplier and stock information for spare parts, and the schedule of planned maintenance (to avoid unnecessary reactive maintenance).

It is worth noting the trade-off which results from access to a solutions database, which will enable some queries to be resolved by the Help Desk staff. The time and therefore the
cost of the call to the Help Desk may be higher, but there will be a smaller number of call outs. The overall cost of resolving the fault is therefore reduced, and user satisfaction is greatly increased. Some trade-offs are worth making!

Procurement

By definition, procurement involves expenditure. However it is not always obvious how this expenditure can be minimised without compromising the efficiency or service level of the organisation. There are in fact a number of cost savings that can be made.

Buy only what you need

To ensure that you are not wasting money on unnecessary purchases, you need accurate information about what you have, where it is situated and what condition it is in. It is often possible to re-deploy existing assets and equipment, saving the considerable capital expenditure entailed in the purchase of new items.

Buy from the right suppliers

The right supplier is not necessarily the cheapest one. Selecting the right supplier means taking into account many factors apart from price. Factors that should be considered include responsiveness, reliability and the quality of the service provided. This assessment is eased by software which provides a service history, and by analysis of user satisfaction surveys.

It may well be that retaining existing suppliers, and renegotiating terms and service levels, is a better and more cost-effective solution than going through the time-consuming exercise of finding new sources of supply. The important point is that the selection of suppliers should be a conscious decision backed by reliable information, rather than one based on the inertia of the status quo.

Buy at the right price

Buying at the right price means buying at the lowest possible price from the right supplier.

Suppliers often offer favourable prices for larger quantities. This is a good way of reducing capital expenditure, but there is a trade-off to be made between the cheaper purchase price and the cost of storing the larger quantities of items. This type of decision-making can be handled automatically by the more advanced procurement systems. An intranet-based purchasing system can be set up with a list of approved suppliers, item specifications, agreed prices and Service Level Agreements (SLAs). Access to such a system will help ensure that all purchases are made from the right suppliers at the right price.

Buy the right items

Buying assets and equipment which are robust and durable will significantly cut maintenance and repair costs, reduce downtime and lengthen the purchasing cycle. In order to identify such items, information is needed from the Help Desk and maintenance systems.

Good Help Desk and maintenance software can be set up to provide a service history, which will include frequency of breakdowns, speed and cost of repair, etc. More sophisticated systems incorporate historical information and can rank items according to their reliability.

Only pay for what has been delivered

A cost-aware company will have zero tolerance for unnecessary expenditure. It is avoided by using a purchasing system which enforces invoice matching against deliveries. A good system, which also provides instant access to supplier and pricing information, will normally pay for itself within a few months. This information can be used to inform purchasing decisions, maximising the likelihood that the items which are bought will be the most reliable and fit for purpose.

Being proactive is key to cutting costs

In a difficult economic climate, every organisation should be taking proactive steps to ensure that it becomes leaner, fitter and more profitable. Facilities Management can play an important part in achieving these goals.

Richard Fisher is Divisional Director of Qube Global Software’s Planet product. Planet is a facilities management software designed for both in-house facilities managers and FM contractors. Please visit www.qubeglobal.com