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Connected Thinking

11 May 2011

Kevin Elliott

FMs are in a good position to adapt existing technologies and deploy them to bind property and facilities management functions together and create real efficiencies in the management of real estate, as Kevin Elliott explains

THE MORE OPTIMISTIC AMONGST US were expecting the economic pressure to lift in 2011. However commentators are already predicting negative impacts from the natural disasters in Japan whilst the crisis in Libya and civil unrest in other parts of the Middle East are forcing up the price of crude oil. Surely it is time for more lateral thinking to solve the conundrum of driving efficiencies and reducing costs.
However, most people will agree there is more value in finding ways of doing more with fewer resources rather than being satisfied just doing less. After all in some cases there isn’t much more to cut. The answer may not lie in reshaping how things are done but by harnessing technology to re-invent how we access and use information.
Self-service culture
There are cultural and infrastructure changes that have been creeping up on us that make reliance on technology a more realistic prospect than it might have been even a couple of years ago. Firstly our working population is far more pre-disposed to a self-service culture. Take supermarkets as an example. The introduction of self-service tills is now common place, and people have more control and are comfortable managing their own transactions in the store. The introduction of self-service room booking at the Punch headquarters in Burton-on-Trent in 2010 just would not have been adopted four or five years ago. Things are moving quickly. It is hard to believe that quick fire communication tools such as Twitter have only been around for five years and ‘Apps’, really self-service information sources, have only recently celebrated their third birthday. Yet these are being universally embraced in the business world. With those factors in mind a self-service approach for users to take responsibility in the workplace doesn’t seem unrealistic.
The second trend is the increasing appetite for data. With property accounting for the second largest cost within a business it is no surprise that the spotlight is on the property and FM teams to have their data analysis house in order.
From understanding energy consumption within the building, to audit trails for waste disposal and peaks and troughs of visitor numbers, each requires data collection and analysis to understand the impact on the organisation.
Although the market is steeped in measurement with KPIs and SLAs part of the property and facilities lexicon, the difference in 2011 is that no one expects to employ an expert to extrapolate data and turn it into useful management reports.
Any automation of systems and processes enables FM teams to reduce centralised administration functions that inevitably add cost to the any service delivery model. Although no one can argue with the premise, it is a one dimensional and slightly clumsy equation – automation equals direct cost savings.
Over the past couple of years the smarter organisations have been considering the bigger picture rather than cherry-picking a software programme to automate a specific process.
The big opportunity lies in the marrying of property and FM processes so that an organisation can create visibility for decision making, ensuring that what may affect one aspect of managing the real estate is reflected in the other. This might sound obvious but it is nascent thinking for most where these two departments are often distanced from each other.
Consider the property life-cycle. The process starts with acquisition, which comes with the lease agreement, service charge (if in an applicable environment) and the rates exposure.
After this is the on-going management with all the operational considerations for life cycle management of assets, building user considerations and compliance. Finally at the disposal phase there are dilapidations.
Even this simplified view demonstrates that there are implications for the property and FM team based on decisions taken at every stage of the life-cycle. In the past if an organisation could benefit from linking property and FM it had to rely on the different teams communicating and sharing information. In 2011 that all seems very time consuming when technology is available to establish a more robust and intuitive way of creating synergies between the two disciplines.
Service charge is a good example. Normally it is the domain of the property professional, however by leveraging expertise from the FM team those negotiating and managing service charge contracts can interrogate and evaluate cost and performance of the landlord’s FM team.
Creating a database for the service charge contracts within an organisation brings all the information together in a consistent format. Copies of the leases, (in the case of one major retailer, there are 1300 separate leases that relate just to service charge) where service charge is levied and held on line, for easy reference. With a database driven system the biggest benefit is the ability to benchmark service charge between different sites and compare landlord charges, thereby giving the property professional the data with which to negotiate reductions to the proposed charge.
Not only can the property team benefit from a central database of property related information, but FMs are able to apply a more logical approach to asset management for example. The PPM programme may be adjusted if an air conditioning replacement programme for a particular building is on a six year pay back yet the lease has only four years to run.
It isn’t all about creating visibility for property. In FM a critical aspect to running a successful service is managing the supply chain. With compliance high on the agenda, it has never been more important to ensure that suppliers are working to the agreed guidelines. Supplier accreditation can be onerous for both supplier and client alike.
Introducing a technology solution can save laborious administration for both organisations checking and sourcing documents. Automated reminders can be set for renewal dates, and a feedback mechanism helps the supplier understand what further evidence needs to be submitted in order to meet the grade. These grades can, of course, be modified depending on the requirements of the client.
A supply management system can establish more control over how suppliers are deployed by linking with the help desk system. This ensures that when the operative allocates a job to a supplier anywhere across the estate it will only be from the list of accredited suppliers.
Benchmarking of suppliers is also possible as the performance data is held centrally. This can then be used to monitor service charges and any outsourced FM activities across any site.
In the case of one pub chain, over 800 pub managers use an on line system to manage their maintenance requirements. Although the budget for each pub is set centrally, the manager is able to allocate the allotted budget according to the priorities for that particular establishment.
The supplier of the service as only those who are accredited will figure in the choice presented to the manager. The pub manager is in control of the engagement but yet there is a central management function that ensures any choices remain within the pre-set parameters.
With a joined up approach, suddenly the connections are made automatically. For example, when the helpdesk system highlights a store that is not trading because of remedial works then this can, if the circumstances allow, trigger the ratings team to negotiate a rebate.
Just this one connection has saved one store over £100,000.
There are some design fundamentals that should be considered.
● User interface - are people going to embrace the system. Remember that neither Amazon nor e-bay have ever needed to train customers to use the system yet millions use both products.
● Web-based applications afford real time access and visibility 24/7 yet they need to be robust and maintained with the least disruption to users.
● Considering the wider business context, how data is transposed to the invoicing and HR systems and quality and environmental management systems, creates an holistic approach to unifying property and FM with other key business activities.
Often the technology itself is not new, but it is the way it is deployed and managed that creates real efficiencies in the management of real estate at any time in the life cycle of the property.
● Kevin Elliott, is Managing Director, SGP Property and Facilities Ltd

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