Derrick Hidden, Group Consultancy Director and Co-founder of Cloudfm
Historically, the most common commercial models in FM have been the rates-based and fixed price models. Although they both have advantages, in that they are clear and easily understood, neither is well-suited to supporting enterprise scale businesses in the modern economy.
The rates-based model: In an effort to reduce the cost to the client, rates are understandably reduced as far as possible. However, the calculations used to do that cannot take into account the operational complexities of delivering FM on a large and complex multi-site estate. This often results in the provider's margin diminishing to the point where they are forced to cut corners, simply to stay in business.
The fixed price model: On a large-scale estate, where existing management information may not be accurate or comprehensive, providing an accurate fixed price is extremely challenging. This results in either margins that are too low (so the provider must cut corners to break even), or margins that are too large, compromising the value the client receives.
For enterprise scale businesses to be supported, a more modern commercial model is needed. One which will enable costs to be reduced year-on-year, while producing verifiable and significant increases in quality and compliance.
Even in the era of automation and robotics, FM is delivered by people and that will remain the case for many years to come. Efficiency is delivered by following process, and by the capture of accurate, comprehensive data (because you can’t manage what you can’t measure). However, without support, even the most skilled people are not always able to prioritise data or process. Historically, this has meant that increasing quality has meant increasing resource – simply throwing more people at the problem.
Other industries, such as retail and manufacturing, have successfully applied technology to increase productivity, supporting each employee to achieve much more in a given time, and deliver more value for employer and customer. FM has made less progress. CAFM, helpdesk ticketing, field service management and other similar systems are better than nothing. But, when one system does not support every section of a process, it is inevitable that some data will be unavailable when it is most needed.
There is a growing interest in the concept of end-to-end integrated management information systems for FM, which integrate all communications with operational and finance information. This is an essential foundation if FM is to access the gains in productivity and efficiency that other industries have achieved over the last 15 years.
Traditionally, FM has been a reactive service – when something breaks, a specialist is summoned to put it right. Sometimes, they are unable to do so, and the same or another person must attend at a later date. This is inconvenient. Moreover, if the site is unable to operate until the fault has been fixed, then it is hugely expensive, not just in emergency callout fees but in lost trading time.
Although most FM programmes have some element of preventative maintenance for key assets, without accurate and comprehensive management information, it is difficult to quantify the impact of this activity. This makes it an easy target for cuts if the budget needs trimming.
However, this is almost always a false economy. Planned activity is much less expensive than reactive activity, both in terms of its delivery, and its business impact. However, FM providers must gather and make available such detailed and accurate data about FM activity in order to clearly demonstrate the financial benefits of the preventative maintenance.
As technology in FM continues to develop, more and more focus is being put on the preventative maintenance elements of FM programmes, and their potential to enhance customer environments, prevent lost trading hours, and reduce reactive callouts.
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