Spotlight on the End-Users
Tuesday, December 20, 2016
While the last issue carried Ryan Darnell, Executive Director- Services, Khidmah blog on the FM service providers entering the market, in the second part of this series, Ryan shifts the spotlight on the end-users in facilities management…
I have worked in a number of organisations where Facilities Management is a support service within the business. While many long for the days of being the client I can say without reservation that it’s one of the toughest jobs you will find. Firstly you will come to the realisation that you are not the core business or service but instead a support player to the organisation. Now that doesn’t mean your role isn’t as important but it does mean you will be under constant pressure to deliver a valued service with less budget each year. I worked for one large American Organisation where the FM department had a mantra that any change had to be bigger, better, faster or smarter in order to be adopted in the Organisation. Each change or proposal from the FM department was scrutinised by the business profit centres to ensure it added value to them and most importantly supported their return on investment. So just how easy is this to do as an in-house provider vs outsourcing FM services?
The first thing that clients seeking FM services need to do is seek to clarify just how close their service to the organisation's core business is. If your core business is as a property developer or a real estate agent, you may seek to keep certain functions of FM within the control of an in-house team that is aligned to your core service while outsourcing specialist services. Whereas an FM within a law firm would most likely seek to outsource most of the department functions as there is no requirement to offer a supplementary service to clients. Doing this first allows many organisations to see where FM fits into the structure and where the department will have sponsorship to deliver. It also gives and indicator on the type of FM model that can be proposed. For organisations where FM is closely aligned to their core business, they may be able to invest in their in-house resources and contract individual business lines which can be managed directly. Whereas for those organisations where FM is not aligned with the business, they may seek to have a single point of contact and an integrated Facilities Management contract that ensures they need fewer resources to manage the day-to-day functionality.
When reviewing functions to outsource both a qualitative and quantitative model should be built prior to tendering that identified not just the areas to be outsourced but what the driving factors are to do so and how they will be measured for success. In the Middle East many organisations say cost is the one and only driver, however, the longer you speak with senior management and review the organisation's drivers the more you will determine to be considered before tendering. Appetite for risk is one such area. We all want a Ferrari for the price of a Toyota but realistically this isn’t going to happen. So just like purchasing a car, there are areas where you may need to invest in quality or to mitigate risk or to give a competitive advantage and there are areas where you can reduce on quality as it’s not needed.
One such example was a client who had an industrial portfolio in the UAE. They borrowed a tender scope without understanding what they first wanted and went to the market. The scope included metrics for service requests from 1 to 3 hours for a portfolio that was mostly uninhabited and in remote areas. After further consultation with the client, they moved to a run to failure and reactive only service model as most of their portfolio was at the end of its lifecycle and set to be replaced within three years with the new state of the art facilities. The money saved in the FM operating model was then used to insure the portfolio as there was a real risk that many of the facilities could be susceptible to weather damage. This is just one extreme example of where a client has not identified their true drivers to measure success in outsourcing FM. I encourage those reviewing the Facilities Management departments to reach out and speak with service providers, consultants or industry experts prior to outsourcing and ensuring that the model tendered is the one that best supports the Organisation in delivering its core business.