Facilities Management

Innovation & Cost Reduction in FM

Author: Mark WhittakerDate: Tuesday 10th December 2013

1. Getting to know each other.

2. The FM Market

3. Innovation in FM

4. Cost Saving Strategies

5. Careers

6. Questions and Answers.

Lecture Content

To start ….a question about YOU

How many of you have a firm idea what career path you wish to take, post graduation?

My Career Path

When I was 18……..my career choice…

Yes, I was a University Student Once

My Path into FM

M.W.I.M.

2. The FM Market

What is Facilities Management?

“Facilities management is the integration of processes within an organisation tomaintain and develop the agreed services which support and improve the effectivenessof its primary activities”.

(CEN the European Committee for Standardisation)

Facilities management encompasses multi-disciplinary activities within the builtenvironment and the management of their impact upon people and the workplace.

It contributes to the delivery of strategic and operational objectives. On a day-to daylevel, effective facilities management provides a safe and efficient workingenvironment, which is essential to the performance of any business – whatever its sizeand scope.

The basics

What is at the core of Facilities Management?

"A profession that encompasses multiple disciplines to ensure functionality of the built environment by integrating people, place, process and technology."

Cost-cutting initiatives of the 1970s and 1980s led organisations began to outsource ‘non-core’ services

Integration of the planning and management of a wide range of services both ‘hard’ (e.g. building fabric) and ‘soft’ (e.g. catering, cleaning, security, mailroom, and health & safety) to achieve better quality and economies of scale

Formation of the BIFM in 1993, followed by the development of specialised training and a qualification

Step-change with the Private Finance Initiative (now Public Private Partnerships), becoming an integral part of large-scale projects to manage, replace, and upgrade the country’s infrastructure and public service facilities. This new approach was swiftly followed in the private sector and abroad.

History of FM

Estimates vary; market research suggests that, in the UK alone, thesector is worth between £40bn and £95bn per annum

“We need to let more people know just how important the FMindustry is in the running of the country as well as the contributionthe FM industry makes to the UK economy. We represent £40bn inturnover and over 500,000 employees; 5% of GDP is a significantamount.”

Chris Hoar, Chief Executive

Current Market Size

Who are the major UK FM players?

A Question

Why do you think Facilities Management is often overlooked in the UK Corporate Boardrooms?

The report also mentions that public expenditure, climate change and economic growth will be amongst those with the biggest impact on the industry

“Some single service providers may lose share in the medium term as larger clients seek to reduce their costs further and move toward a preference for ‘bundled service provision’.”

Future Trends

ISS 20:20 Vision

1. Capitalism Reinvented

2. Great Transformation

3. Sustainable Business

4. Fragmented World

The Future?

3. Innovation in FM

What is Innovation in FM?

“Innovation in facilities management is the introduction of anew product or process, which delivers tangible andmeasureable benefits in terms of operational cost reductions,increased efficiency and optimising building usage andperformance.It is not merely process improvements.”

Can you do better?

How do others define “innovation”?

Why is Innovation important?

Is Innovation being delivered in the UK?

Cost , innovation (86%) & local supply chain most important in tender evaluation

77% of cases innovation happening

Highlights

The “Innovation Environment”

“an external supplier might bring innovation and efficiencies that are beyond the scope of the existing team. They will also be more familiar with procedures for help desk, customer relationship management and the handling of change Requests.”

During the design stage of buildings, the prospective accommodation is modelled to assess its effectiveness to occupy, its efficiency to heat, cool and light and to gauge whether the resultant environment will stimulate innovation and productivity for its prospective occupants”

Some Barriers to Innovation

Finding the right partner Cost Lack of finance- internal & external Lack of qualified personnel Uncertain demand

Key Innovations in Facilities Management

(1). Building Information Modelling (BIM)

(1). Building Information Modelling (BIM)

BIM Benefits: Co-ordination & Collaboration Easier Maintenance of Building Lifecycle Greater connection between building designers & end users Greater customisation and flexibility Easier conflict detection & resolution Optimisation of cost Improved asset database & understanding

Golden Thread

GSL will be mandated in 2016 for all central government projects

(new build and large refurbishments)

(2). Space Utilisation

Greater analysis of how building assets are being used.

Identification of cost savings as companies downsize operations

More scientific measurements of space utilisation, particularly in building design

A key driver in the design of new properties, particularly within the education sector

(3). Flexible Workspaces

“Hot desking” more common

More flexible shift patterns

Greater home working

Greater focus on enjoyable working environment & the impact on businesses performance

Agile Workspaces

(3). Flexible Workplaces – Media City

3). Flexible Workplaces – 1 Angel Square

(4). Greater Collaboration/Partnership

Private Finance Initiative (now Public Private Partnerships) with crucial element of building life cycle costings.

Longer term contracts encourage investment

Greater outsourcing

Shared targets and goals & reward schemes

Advantages of Longer Term Contracts

Partnership Approach & Relationship Building

Joint Goal and Target setting

Stability and reliability

Supplier Investment

Innovation in Service Delivery

Reduced Procurement costs

Flexibility in service delivery

(5). New/Enhanced Technology

LED Lighting Voltage Optimisation More integrated Building Management

Systems Smart Energy Meters Data Loggers

(6). Outcome Based Contracting

“A shift in focus from activities to results and from how a programme operates to the good it accomplishes.”

(7). Sustainability

The ‘Green Agenda’ will grow in importance in the future

Helping customers achieve their Carbon Reduction Commitments

Green Technology, such as biomass boilers, Combined Heat & Power (CHP) systems

Focus on Ethical Trading, Bio-diversity and Waste Management and recycling

(8). Social Media in FM

Most significant FM Innovations?

“I think the biggest impact has been the way the new technologies - GPS/Tablets/Social media etc. have been utilised by different organisations to eliminate wasted process and provide smarter service.” Martin Pickard, FM Guru Consulting

“The biggest change for me has been the development of the outsourced market. There are a number of suppliers in the industry who now really understand what FM is all about and are providing a service that matches the clients’ needs.” Julie Kortens, Head of FM,Channel 4

“The one area which does look as if it will impact is the advent of Building Information Management systems, albeit that these systems are very much in the infancy and current CAFM technology is not up to speed with it. Iain Murray, Principle Consulting

Five Key Benefits innovation can deliver in FM?

What can stifle innovation?

Price based procurement Short term contracts Lack of partnership/collaboration Mistrust Lack of internal support for FM at Senior/ Board

Level Being afraid to take risks

What does the future hold?

More flexible & better utilised workspaces

Buildings designed & built with greater engagement with users and Facilities Managers

Greater outsourcing in a bundled service provisions

Greater building and asset knowledge

Greater focus on larger, leaner FM providers delivering cost reduction strategies

Professionally recognised “Collaborative Working” standards

Longer term contracts

Joint “Innovation Strategies”

4. Cost Reduction Strategies

With the introduction of Tuition Fees how can UK Universities save money on their FM Spend ?

5. Question

Clashing Priorities

So what practical steps can a UK University take in the current climate to improve cost efficiency of their FM spend?

Question

Cost Saving Strategies

Cost Saving

Testing the Market

Reduce Operational

Costs

Obtain Efficiencies

Reduce Service Scope

Re-prioritise capital spend

Re-organise

Fix not cure

Practical Steps

Review operational spend:

? Space Utilisation/ mothballing

? Utilities spend and enter new contract with guaranteed savings?

? Reactive spend

? Altering equipment settings

? Reduce courses and spaces

? Maintenance spec reduced ?

? Investment in Capital Expenditure Projects such as BMS, lighting, voltage optimisation

Practical Steps

Review Operational Delivery Model:

? Worth re-procuring both Hard & Soft FM services?

? Altering of shift patterns/opening times.

? Can more services be outsourced?

? Will an integrated FM model a deliver improved costs or de-bundle services?

? Can the delivery be smarter? (Up-skilling people).

Practical Steps

Exploit other revenue streams?

? Attract greater numbers of foreign students to make up shortfall?

? Gain rental income from buildings/sub-let?

University of Liverpool experience

The current situation

550 students down in 2012/13. 10% down £1.6 million revenue down. 3no sites mothballed & 1no partially empty. Refurbishment plans put on hold for halls of residences (£250,000) Revision of capital expenditure plans

The answer

Ongoing analysis of property usage Selling off of property to raise funds Reduced maintenance (statutory only) on under used buildings Targeted attraction of foreign students (Chinese)

5. Careers

An excellent source is:

The guide specifically deals with:1. What is FM2. Career Paths3. Qualifications4. Skills5. Company Profiles

Careers In FM

Common Twitter Hashtags

1. Research the market you want to work in & seeks the views of others2. Identify your personal strengths3. Identify what potentially excites you about FM4. Build good networks through social media & BIFM5. Be different, distinctive & sell yourselves, “what benefits could you

bring to an organisation”

And finally “persevere lad…. you’ll get there.”

Take the knocks Be flexible Stay positive Move on

My advice

And Finally……Do keep in touch

@Whitbags http://whitbagsinfm.wordpress.comWhitbagsinfm

6. Questions & Answers