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9 Qs FM and Property Pros Don’t Wan't You To Ask

9 Qs FM and Property Pros Don’t Wan't You To Ask

9th Oct 2018

CPO

Taken from CPO Celtic Manor Event, October 9th 2018

9 Questions FM and Property Professionals Don’t Want You to Ask

Adam Clayfield, Group Commercial Director - Cloudfm

 

FM is 30 years behind most industries in its use of technology and process.

  • Lack of Control & Management
  • Manual Intervention on Basic Processes
  • No Clear Management= Difficult to manage + Poor behaviours

Compliance

1) When do you claim an asset or area is compliant?

Most companies claim their compliance is  + 90%. But an attended compliance visit does not equal compliance.

 

All too often

  • Certification is never received
  • Remedial work is not completed
  • Certification is inaccurate
  • Not all of the property has been accessed
  • Quoted work, even if authorised is not completed

Consequently the real compliance levels are more like 30-40%.
 

“FM drives the basics of the business – you can’t be resilient without effective FM.”
Dave Murphy, Finance Director, Pizza Express

2) How do you verify that remedial work has been completed?

Governance of remedial and compliance activity is often inadequate.

 

Flaws include:

  • Certificates often not reviewed for non-compliancy
  • Attending contractors cannot quote on remedials required
  • Completed quotes not linked to original certification

This Due Diligence is a legal requirement and remains the responsibility of the property owner to put in place controls.
 

“Facilities management underpins the effectiveness of both staff and the customer experience. You can’t deliver an excellent service if you don’t have excellent facilities to do it in.”

Susannah Howard, STP Programme Director, Suffolk and North East Essex NHS

3) How do you verify compliance, down to the level of individual certificates?

Compliance certificates are not accessible, organised or subject to verification.
 

Recent audits on 4 major organisations including public sector showed no organisation with compliance above 40%.

 

This is due to:

  • Missing certificates
  • Worksheets counted as certificates
  • Incomplete or inaccurate certificates
  • Certificates with failures not remedied
  • No details on the engineer competency (e.g. GasSafe)

We have not come across a single organisation that has conducted a meaningful internal audit.

 

“Users of outsourced services need to be able to trust that the information they are given is correct. That trust depends on an appropriate system for auditing and managing information.”
Gary Dart, Group Finance Director, BPP

Services Levels & Measurement

4) How do you define a First Time Fix?

The FM industry has no standards on SLAs, like First Fix.

Often you will get quoted First Time Fix is c. 90% but this excludes crucial service issues.

  • Temporary fixes or ‘made safe’ – maybe 20% of tasks
  • Jobs sent to quote – often +25% of tasks
  • The engineer left site and returned 24 hours later

So First Time Fix often doesn’t count the failures you want it to.

 

“Actually having someone who gets the job done is crucially important.”
Simon Walker, Property Director, TUI

5) How much is our business losing through trading issues?  

Each critical failure creates an operational cost.

Traditional FM programmes do nothing to reduce these costs, because:

  • No measurement on the total time of critical failures
  • Traditional SLA penalties create incentives to hide true impact
  • No incentive to create business cases to reduce breakdowns
  • No data to show the impact on critical failures if maintenance were improved

Poor systems and the lack of partnership in FM promotes poverty of data.
 

“Good facilities management has a direct impact on our frontline.”
Matt Finch, Head of Asset Management, Eco World London

6) How can you verify that a task is truly complete?

Most maintenance models allow invoicing throughout the process.  
 

This means jobs can be marked as complete even though:

  • There are parts required which may be fitted later
  • There is a quote which needs approval
  • The attending engineer had the wrong skillset and it requires another visit

The advent of TFM models has made this even worse with prevarication, delay and lack of clarity. There is often no visibility of attended but incomplete tasks and Black and Yellow Tape is the outcome.
 

“If you don’t stay on top of it, you can have capital outlay where you least expect it.”
Steve Hancock, Director of Estates and Facilities, Bannatyne Group

Rates & Charging Models

7) How do your rates cover appropriately skilled engineers?

A qualified engineer should command £35-£40k  +Vehicle, Pension, Employers NI, Fuel, Training & Holidays.


The Total cost of keeping a Skilled Engineer on the road is therefore c. £65k.
 

Their total available time is c. 44 weeks x 40 hours = 1760 – this equals £36.93, at 100% utilisation.
 

65% utilisation is realistic in reactive – this is £61.55 an hour.

So often rates are agreed at unrealistic levels, which is counter-productive:

  • It drives corner-cutting and inappropriate behaviours
  • It de-skills the industry at a time when we are short of qualified engineers

The answer is not lower rates, but more efficient management.
 

“As an industry, the root of our ability to meet client demands safely and economically is people – a huge part of what we’re selling is actually people.”
Adam Williams, Group Procurement Director, Capita

8) What are our actual costs for repair and attendance?

The actual cost you pay is a function of 2 areas:

Labour – based on rates and times

  • Low rates = less skill and a desire to increase costs with time on site
  • Lower engineer skillsets = multiple visits
  • No control on First Fix = repeated callouts

Materials – the equipment and materials used

  • With no process to benchmark against market rates costs will be inflated
  • Without the detail in the invoices and quotes supplied how can you know you are getting best value

Without these controls, there is no way to ensure costs are appropriate.

“Contemporary procurement is highly focussed on driving out cost. However, there is often little consideration of the risks that this can pose to the arrangement as a whole.”

Adrian Ringrose, former CEO, Interserve

9) What are we being charged for in addition to basic attendance?

In addition to your standard fees you are being charged for:

  • Waste Disposal/Transfer Certificates
  • WEE disposal – fluorescent tubes
  • Travel Time
  • Toll Fees
  • Parking
  • Hire Costs for equipment already carried
  • Sundries – on every job
  • Third party invoices for subcontractors on same job

Often these costs are used to bolster unrealistic rate cards.
 

“It’s important to understand what you’re spending money on and why – only then can you look at FM as a business case, not a cost centre.”
Chris Drew, CFO, KFC UK&I

The solution must be driven by forced process controlled with technology

  • System and process usage is not optional
  • Real-time control and measurement at every point
  • End to end Integrated Technology from Customer to Supply Chain
  • The charging mechanism should be a direct result of all the actual inputs without further human intervention
  • Clear Measurement = Improved Behaviours

Audience Question- If you do not directly employ all your own labour, if you have an engineer turning up at a building, are they working on an agreed hourly rate, or an approval method for parts etc.? And how covers that cost?

It’s not a simple answer, but in essence there will be a unique code for the premises which the engineer will need to scan before they enter using their device which is linked to everything. So we know who they are, the competency, their clients etc. It picks up the details of the job and what it entails.

 

Then when they have finished the jobs, they will take pictures on the device to prove it, they will go through RAMs and processes, they will have to have the job signed off by a manager and then scan out to show when they left the premises. And underlining that is a rate card.

 

We do employ our own engineers, but they only do planned maintenance. We have no say in the game about reactives, but our model is that we are incentivised to drive down reactive maintenance by more diligence.

 

The issue has been that the market has tended to go down two routes; I have £10 million worth of spend for example, therefore, do I want certainty or diligence. I go certainty, I go down the TFM route, but most likely everyone has been burnt by a cap spend model where the risk gets passed on to the provider, but the provider finds out six months in that £10 million isn’t enough, so they delay and defer.

 

The other model is to do it with a rate card model, but then it is uncapped spend and you are constantly trying to stop stuff happening. Our model sits in between; if you are going to create 30,000 reactive charges in a year, you will have 30,000 reactive charges.

 

What you want to do is make sure they are the lowest cost possible. And on your planned side, if you know you will have this much planned spend, make sure it is done properly and diligently and your reactives should reduce.

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