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Managing facilities efficiently and effectively requires that a robust strategy is developed within the context of the organisation’s business plan and space/accommodation strategy. These should involve development of strategic objectives and a plan for the facilities management, with proper reference to the overall business plan and space/accommodation strategy within which it might be contained. A strategy (or business plan) for facilities management should:
The three main stages in the development and achievement of a workable strategy for facilities management are:
The aim of the analysis is to establish a thorough understanding of the present state of the organisation’s real estate and facilities management. This means assembling all material facts including:
Once information from the analysis stage has been assembled, a robust and structured approach to the interpretation of the information can be adopted. It is essential that the interpretation of information derived from the analysis is open and allows new ideas and innovative solutions to be developed. The recommended approach is:
Policy statements can be developed into operational plans and implemented through a process that is capable of managing change. The change management process should be undertaken adopting best practice in human resources management. The implementation plan should include programmes, milestones, performance measurement and risk analysis. The risks to successful implementation should be identified and responsibilities for managing these assigned.
In summary, the plan should encompass people and systems, communication, resource planning and procurement/purchasing.
The starting point for managing facilities is, as previously noted, the organisation’s business plan and its real estate (or space/accommodation) strategy. These should be kept up-to-date and used to determine the nature and level of services support. The facilities management strategy must reflect the organisation’s business objectives, needs and policies, as well as practicalities, such as its current real estate in general and space in particular. This formal strategy should include descriptions of the approach to measuring how the business objectives and needs have been met.
The selection of the approach through which service provision will take place should be based on the ability of that approach to satisfy those attributes that an organisation considers most important to its success. However, as the circumstances, which the organisation is subjected to, are subject to change, the most appropriate option will be the one that can also accommodate change. Naturally, there will be advantages and disadvantages in providing services either in house or by outsourcing. The organisation must, therefore, decide the route that provides best value for itself in the long term. This is achieved by taking full account of the implications especially the true cost of all options.
Debate on the benefits or otherwise of outsourcing has been running for decades. Although it is now generally agreed that outsourcing can stimulate innovation and can present cost savings through the harsh realities of competition, it cannot be assumed to be the best approach in all cases. The merits of outsourcing each service must be considered until the optimal mix of outsourced and in-house provision is attained.
The decision to outsource or provide services in house must take into account both the capability of service providers and the effort required to manage them. An organisation that takes the decision to outsource can delegate the direct supervision of work and service operatives to the provider. The role for the organisation’s representative then becomes one of managing the output from the service provider. The representative should act as an informed client managing performance against service specifications and service level agreements (SLA). Organisations need to consider their approach to this new management role carefully.
quantify the acceptable standard of service required by the customer (or end-user) and will generally form a part of the contract with the service provider.
Service level agreements (SLA)
build on the service specification by amplifying, in practical terms, the obligations of each party.
A service specification quantifies the acceptable standard of service required by the customer and will generally form a part of the contract with the service provider. Its production is a prerequisite for drafting a service level agreement (SLA). Specifications set out standards covering organisation policy, department requirements, statutory requirements, health and safety standards and manufacturers’ recommendations. The specification may also outline the procedures needed to achieve required technical standards.
A service level agreement (SLA) builds on the service specification by amplifying, in practical terms, the obligations of each party. Technical and quality standards will usually be defined in relation to industry standards or manufacturers’ recommendations, whereas performance will be related to the specific requirements of stakeholders, that is, frequency of activity and response times to call outs. This agreement need only include, at the bidding stage, a framework setting out the overall performance parameters with detailed procedural issues to be evolved and refined during the life of the contract. Whilst the scope must be made clear, detailed day-to-day operating procedures can only be refined as the knowledge and experience of each service partner is built up over time. SLAs must be kept up-to-date.
In contemplating a mix of support services such as cleaning, security, building and mechanical and electrical maintenance, it is easy to see the diversity of tasks involved. This may mean that a manager or supervisor who is trying to cope with such a range of services may not be competent in all. This could prove to be a problem for smaller organisations where, although the tasks are not extensive individually, their diversity is great, requiring the manager or supervisor to be multi-skilled. For larger organisations, specialist management and supervision may be cost effective and efficient, because more of it is required.
In choosing the approach to service provision, total cost is often under-reported. In evaluating the comparative cost between in-house or outsourced service provision, organisations should identify all costs, both direct and indirect. A common mistake is for only the direct costs to be reported. Indirect costs include those incurred in the internal management of external contracts and the ongoing training and development of in-house personnel. Furthermore, the full administration of the services such as permit-to-work procedures, competent and approved person regimes, together with the technology to operate them, all attract a cost that must be recorded.
Organisations also need to consider the costs of financial administration. For instance, a small number of labour and material contracts means that invoices can be processed more cost-effectively than in situations where invoices are many and frequent. Clearly, the method of procurement has an implication for the accounting function.
By contrast, direct cost is easier to ascertain. In the case of an outsourced provision the contract sum is a figure that is readily available. For in-house provision, the direct cost calculation would include salaries, including benefits. As noted above, these more obvious costs should not be looked at in isolation from the associated indirect costs.
Linked closely to the management variable is the issue of control. For many organisations considering outsourcing, the greatest concern is that of a perceived loss of control. The level of control that can be achieved is closely correlated with the method of procurement and the contractual relationship established between the organisation and the service provider. Through a more traditional contract the level of control is limited. For more control, a partnering arrangement may be appropriate.
Whatever arrangement is put in place, technology has a part to play in the delivery of reliable management information. It is through available and accessible information that many of the control issues can be solved. In so doing, value can also be added if the management information is delivered as a consequence of service provision and is therefore available without cost or, at least, for a nominal sum.
Any significant change in the number of services that are outsourced will have an impact on the structure of the department or organisation; in the case of outsourcing all real estate services, a small core management team is required to control and co-ordinate the activities of the external parties. In this instance, the role of management changes from direct management to the management of the output of others: the performance measurement of deliverables. The main tasks then become the management of the respective contracts and the definition and development of policy and procedures. These, along with relevant standards, are vital if the respective contracts are to meet the expectations of customers and are not to encourage malpractice or other kind of irregularity.
The most appropriate management structure will be the one that ensures both economy and control for the organisation over its facilities. Clearly, the management of contractors is different to the supervision of directly employed personnel and should not demand as high a level of resources. It is acceptable that some personnel will have to be retained even where the organisation has opted for total facilities management by a single contractor since the informed client function (ICF) must be maintained. This should be a major factor in the drive to have personnel who are trained to act as competent client representatives and, if organisations find such expertise lacking, they should adopt recruitment policies that recognise the specialisation of facilities management and seek individuals who have undergone appropriate education and training. The role of managing the client-contractor interface includes the following duties:
Where services are retained in house, it is essential to ensure that the management structure facilitates a split between purchaser and provider, with the purchaser acting as the objective and informed client in order to monitor the performance of in-house service delivery. Policies and procedures must be formalised within this management structure to ensure that customer expectations are met and malpractice and other kinds of irregularity are actively deterred. The most appropriate management structure will be the one that ensures both economy and control for the organisation over its facilities. This means that organisations will need to determine exactly the number of personnel and their functions for managing the provision of services.
If buildings and other facilities are not managed, they can begin to impact upon an organisation’s performance. Conversely, buildings and facilities have the potential to enhance performance by contributing towards the provision of the optimal work and business environment. There is no universal approach to managing facilities. Each organisation – even within the same sector – will have different needs. Understanding those needs is the key to effective facilities management measured in terms of providing best value. Furthermore, once established the facilities management strategy should be a cornerstone of an organisation’s accommodation strategy, not adjunct to it.
In choosing the most appropriate solution consideration must be given to direct and indirect costs of both in-house and outsourced service provision so that a complete financial picture is gained, with comparison made on a like-for-like basis to enable a decision to be taken on best value grounds. A long-term and integrated view of service provision is essential to effective facilities management.
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