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Facility management: BEST PRACTICES

By: Abhishek Agarwal

Author is working with Ansal Plaza

A best practice as benchmarking is a specific process that works and creates ideas, options and insights for others. The following best practices highlight best practice policies and success stories from across the Ansal Plaza malls that have substantially improved the management of our malls  through: improved financial performance, increased efficiency and productivity, promoted sustainable development, reduced costs and time, saved energy, and supported strategic goals of organization.

Benchmarking is used by many organizations globally as a means of health-checking the deployment of resources. If applied correctly, it will lead to effective value management of facilities service provision. The fact that comparisons are made with an external peer group differentiates benchmarking from budgeting.

The need for benchmarking within organizations can be linked directly to the competitive environment in which we operate. Globalization and information and communications technology advances inevitably mean that organizations must be increasingly dynamic in order to stave off the competition. Over the past ten years there has been a business performance revolution, which introduced novel methodologies and techniques, such as activity based costing, the balanced scorecard, and the business excellence model and shareholder value frameworks, all of which are approaches that many facilities managers will have experienced or even feared.

It is therefore, common for benchmarking to be incorrectly mixed up with performance measurement techniques. The truth, however, is that benchmarking is a systematic process of evaluation; in essence it provides a fluid methodology that uses performance criteria in the search for improvement beyond best practice.

Facilities costs

Typically, the facilities manager is concerned with a wide variety of costs associated with the provision of buildings or premises, business and staff support services.

The property costs are a relatively fixed component of the budget (any movement usually being upwards due to rent reviews) whereas the remaining cost centers (premises, business and staff support services) are managed by the facilities manager. Reducing the costs of any of these aspects of facilities would not automatically result in an addition to the bottom line profits. In fact, unless the savings can be affected without impairing the performance of the organization dependent upon those facilities, the opposite may occur i.e. profits will fall rather than increase.

Therefore, it is important to recognize that the money savings as a result of benchmarking are unlikely to be significant unless quality and the associated risks to performance are taken into account. This reason, combined with the fact that accommodation and facilities management services directly impact upon staff productivity, establishes benchmarking techniques as extremely valuable to the facilities manager.

Mechanics of benchmarking

The selection of the peer group, the parameters to be used and the classification protocols are critical to the success of any benchmarking exercise.

For example, if you were to benchmark maintenance of services, the systems in place have to be of a similar operating quality and the maintenance regime in place has to be of the same standards.

In addition to the selection of the peer group, the benchmark facilitator should also select the appropriate parameters for the benchmarking process. Whereas, the cost of activities such as cleaning, maintenance and security can be compared on cost per square ft .or per capita, the measurement of floor area (i.e. gross or net) still needs to be made correctly to derive at a useful benchmark.

Similarly, facilities such as photocopying, catering and stationery are normally considered on a per capita basis. Again this measurement can be either by full time equivalent, designed occupancy space, etc., but it is critical that the method of calculating this is conform to a standard protocol. The importance of a classification protocol cannot be emphasized enough. It is important that the protocol shows the items included and excluded from the cost centre. In addition, the protocol should clearly indicate in which cost centre the excluded items can be found. This process of highlighting those areas that often lead to mis-interpretation is extremely useful when you are trying to extract the information from, "for instance" the Accounts Department.

Furthermore, a space measurement protocol needs to be applied when benchmarking cost per square ft. There is a significant difference between gross internal area (GIA) and net internal area (NIA).

Overall, well-structured measurement and classification protocols should ensure that cost data are collected and analyzed in an orderly manner eliminating the chance of mis-representation of the benchmarks.

FM benchmarking—the wider perspective

Many people think that benchmarking is only about comparing cost levels, but there are in fact numerous aspects of facilities management that can be benchmarked. Several of these aspects are listed below.

• Space use. Benchmarking the space use is prime as this drives all of the premises costs and the floor areas need to be known for the purpose of comparing costs of maintenance, cleaning, etc.
• FM management. Benchmarking the effectiveness and cost of the facilities management operation on a strategic/tactical level.
• Computer aided facilities management systems. Benchmarking of the costs and effectiveness of the help desk.

The facilities management costs and the space use are often the subject of a "first strike benchmark". This is a benchmarking exercise during which basic information is collated as part of a high level study that is often used to throw up areas where there is clearly something amiss. The "first strike" clearly indicates that the cleaning and security cost are at the top of the peer group range and security is either highly efficient or possibly under-manned. All that this benchmark shows is that further investigation into these cost centers may be necessary, but it totally ignores the possible resource drivers forming the costs.

Ultimately facilities managers need to add value to the organizational value chain. There needs to be a realization that the discipline of facilities management encompasses much more than costs alone. True facilities management benchmarking activities can be largely associated with evaluation of the following aspects assets;

• inputs;
• processes;
• outputs; and
• systems;

Buildings are significant assets and the facilities manager would typically be concerned with issues such as physical, functional and financial performance. There are many evaluation methods to assess asset performance and feeding information into the benchmarking process. Techniques such as building condition survey, post occupancy evaluation, building quality assessment and investment appraisal are all capable of providing data for comparative evaluation. For example, if the maintenance cost of two buildings were compared conform to a classification protocol that included project works as part of the maintenance services, the building condition will be a major resource driver of the costs. If the condition of the buildings differs significantly, the difference in maintenance cost per square ft GIA could be partly explained due to the physical performance of the buildings.

Inputs can be associated with processes and outputs and generally relate to many different circumstances within the facilities managers remit. For example, the procurement of a new building would be a project with inputs (labor/material cost for construction), various interactive activities to make identifiable processes and the final output being the asset or building. Possible measures that a facilities manager might wish to use during the course of input/process/output benchmarking could relate to (examples given are applied to cleaning services):

• cost (e.g. hourly cost of guarding, cost of cleaning activities, total cost per annum);
• quality (e.g. employee skill/experience level, accuracy of management reports, number of complaints, customer satisfaction);
• time (e.g. cleaning hours per annum, response times, time to rectify call outs);
• Risk (e.g. health and safety breach by cleaning staff, injury to third party, loss of business due to bad image as result of cleanliness).

Systems refer to the mechanisms in place to assist with the efficiency of processes. In relation to facilities management service delivery activities a computer aided facilities management system could be in place to assist with the management of processes. As mentioned before, the cost and effectiveness thereof can be benchmarked.

Benchmarking the quality of facilities services

As mentioned before, the "first strike" benchmark only regard the costs of facilities services at a high level. Unfortunately high level qualitative assessments are often unstructured and misleading.

It is therefore necessary to look at the ways in which quality can be benchmarked and how the results can be set out against the costs to accurately appraise "value for money". The principal techniques involve "user satisfaction surveys", "analysis of the service levels" and the "output performance".

User satisfaction surveys are conducted either by questionnaire or interviews. Both tools need to be limited in the number of questions and should aim at not only establishing the user satisfaction but also at establishing the perceived user importance attributed to the different aspects of the facilities service.

Having analyzed the returned questionnaire the benchmarked can present the results in an agreed format to the facilities manager whereby the user satisfaction results and costs are benchmarked.

In results say if you prepare graph of cost vs. satisfaction. For example, the graph may indicate that building F has the lowest level of satisfaction, but the costs are amongst the highest. This representation provides an immediate overview to the facilities

Ultimately, benchmarking could provide the facilities manager with valuable management information to improve the overall FM service delivery at "value for money"