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Talking One Language

15 May 2007

Pan-European or even global FM contracts are becoming more common. It is a complex process and problems can get amplified the more borders, cultures, languages and currencies are included. Phil Ratcliffe explains how to avoid the pitfalls and plan for success

PICTURE THE SCENE: The client wants a consistent facilities management service across its UK portfolio. The service provider with national coverage is keen to oblige. Given the maturity of the UK FM market, this seems like a match made in heaven and should lead to happiness on both sides.

But there are issues buried in the small print. It turns out that it's only the Head of Department within the client that has this vision; the rest of the team are happy using their local suppliers with whom they've worked for years. Meanwhile, the local offices of the service provider have looked at the split of the portfolio, and apart from a few large locations the majority are small sales offices and not really worth the effort that a big contract structure brings.

What looks initially as a perfect match has serious dangers of mismatch, which can lead to frustration and failure to achieve the original objective - optimised FM services across the UK. If this can happen in the UK - and believe me, it does - can you imagine how this scenario may work when you apply different laws, nationalities, boundaries, and currencies?That's FM across Europe.

Cross-border FM has been en-vogue for some years now, and has gained considerable momentum recently with some major international clients signing European and even global on FM contracts with services not limited to FM but often merging together property management and real estate transactions as well.

Much of this recent industry activity has significant US involvement, either from the client, the service provider, or both. While this has a lot of positives, it is also often where the first problem of FM across Europe arises. Europe is not the 51st state or USA II. The US does not understand all the differences between the countries of Europe, and if these are not suitably respected then cracks in FM service delivery often emerge.

Some of the differences - namely currency, languages and local delivery approaches - can be seen as amplifiers. If a problem is experienced in the UK, the same problem can be amplified once it's applied across borders. To avoid confusion it is best to start with the basics:
....Services - try to have a common definition ofthe services that are to be provided
....Locations - be clear about where the services are to be provided and also the type of property (e.g. sales, office, HQ, R&D site, manufacturing)
....Costs - define costs in conjunction with the services definition

Once these have been created, the next step is to look at the various delivery options that are available. This can include one company TFM, amanagement delivery, self-perform or local delivery; or of course any combination of these. Making sure the right delivery model is chosen for each region is essential. Of course, this may not always be possible. However, if the optimum delivery model is defined, it is easier then to identify the potential areas of risk from which an action plan can be formed.

Specifying the services is the next important stage. There is often confusion in the UK about the difference between specifications and SLAs, between performance measures and KPIs, and if this is the case then the 'amplification effect' could lead to significant confusion between different countries. Having a clear specification and service level definition leads to the final stage of performance measurement. Each service needs to have measures of performance applied, leading to combined KPIs and other summary mechanisms such as the Balanced Scorecard.

To put it in a nutshell:
....Complexity leads to confusion
....Confusion across borders can be catastrophic
....Have a clear simple, consistent approach
....Apply it through specifications, SLAs and contracts
.... ...and then innovate

For all of these measures, a simple ethos should apply 'Keep It Simple'. Complexity naturally creeps into FM so it is far better avoiding it in the set-up stages, and by doing this you can avoid the amplification factor. Property portfolios are rarely identical but what is often overlooked is that they are operated in the same way in different countries. For some, the local business country manager can be very vocal and key in influencing the FM delivery, which may also be compounded with a potential clash between corporate and national cultures, both of which will significantly affect performance.

One of the fundamental mistakes a client makes when looking at European FM is they start looking at the supplier market, when they should actually start looking at themselves. A key question the client should ask themselves is whether they are 'active' or 'passive', and are these attributes consistent across the portfolio? A common situation is where the client has a central hub of expertise in FM, and this expertise dwindles as it moves away from the hub. Size of property often affects this. The HQ is usually where the hub is based, but the small sales offices in another country have more office management than FM. In this example management focus is often inconsistent.

When the client eventually gets around to looking at the supplier market it can also help by looking at the opportunity through suppliers eyes. The example quoted above in relation to the client can also apply to the service provider as they often can demonstrate an inconsistent management approach the further you move away from their main operational hub.

The complexities of FM across borders can seem daunting and clients often make the mistake of getting embroiled in the finer detail too early on. Often the best place to start is to complete a FM Healthcheck, encompassing all the constituent parts described above to identify the areas of strength and weakness. From this an action plan can be created, and while it may not be possible to create the optimum delivery model for reasons of policy, culture and organisational structure, at least the client can identify areas of concern and review them, rather than be surprised by them.

Seven steps to FM cross-border heaven
1. Start with your vision and work from there
2. Understand what you want and how it links together
3. Keep it simple and consistent
4. Understand that clients and suppliers are rarely the same across borders
5. Be respectful of local cultures
6. One hat does not necessarily fit all
7. Try to avoid the cardinal sin of rushing the process, as failing to plan often means you are planning to fail
.... Phil Ratcliffe is MD of Project Management and FM Consultancy, Procore www.procore.co.uk


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