FMJ Facilities Management magazine providing industry-specific intelligence to FM and property professionals
Retendering is often the first port-of-call for facilities managers who want to understand whether they are getting value for money from their service providers. John Brownless, Partner at LitmusFM looks at the alternative option of benchmarking
In a post-pandemic environment, facilities managers face significant changes with increasing economic and environmental pressures. Many FM service providers play a decisive and positive role – especially when they are embedded within an organisation – by suggesting, implementing and encouraging the adoption of best practices, technological improvements and alternative ways of working.
However, for many FMs it is difficult to understand if they are receiving value for money from their current FM service providers compared to other similar settings. Even for those establishments which are achieving top performance levels, there can still be savings and other performance opportunities identified.
As businesses start to recover from the uncertainty of the crisis, ensuring the best value is being achieved is more critical than ever. But what are the options?
Retendering is one, but this can mean starting over with a new supplier relationship rather than building on the current relationship. This isn’t always the answer as it may not be a relationship issue; more an issue with the systems, processes or agreed service levels in place. It also often causes a level of disruption – to both workflow and employees.
Every time a retender takes place, facilities managers start afresh and have to allow time while the new service provider gets to grips with the operation, systems and ways of working. This doesn’t happen overnight. It also has potential to lead to significant disruption for employees at a time where they too have faced uncertainty around their jobs and what the future holds post-pandemic. Rather than creating
more disruption, the focus will be on rebuilding and creating a stable future once again.
BENCHMARKING
This is where benchmarking comes in. The use of benchmarks offers a tried-and-true approach to homing in on the efficiency and quality of both combined and individual facilities management services. Benchmarks help make informed decisions; decisions that will encourage stability and strength moving forwards.
Like I’ve said, for many facilities managers understanding if value for money is being received is hard to understand. But this doesn’t have to be an unknown. There are consultancies that have years of experience, data and knowledge and can help ascertain if value is being delivered.
We’re not just talking about cost. Yes, cost plays a significant part, but benchmarking goes much deeper than simply pennies and pounds; detailed benchmark analysis is proving to be critical to the successful management of broader transformational change, including cost management initiatives, reengineering of business processes and implementing quality control measures.
Benchmarking also focuses on how to better the partnerships already in place. Partnerships that were built before the pandemic, remained throughout the crisis and continue post-crisis. Cultivating long and lasting relationships with service providers brings far greater reward than switching to a new service provider constantly. If both parties work collaboratively and are committed to each other’s success over the long term, it is likely to bring much richer results and innovations.
Another benefit that benchmarking brings is an understanding of what others in the sector are doing. Drawing learnings and comparisons from what others are doing, helps ensure new ways of working are successful and right for an organisation.
It’s also essential that once benchmarking is complete and operations are streamlined, that they continue to be measured and monitored on an ongoing basis so there is confidence that they are delivering. The mantra when undertaking a benchmark project should be: benchmark, negotiate, measure and monitor.
Benchmarking is for all establishments, from those in need of dramatic overhaul to ensure a prosperous future, to those performing strongly and only needing small tweaks to their operation. Where things are at now, doesn’t need to be where they are at a year down the line. Taking stock, stepping back from the day-to-day and taking the time to review where changes could enhance the overall performance, will help business rebuild and regrow as we all look ahead to the future.
CASE STUDY
A large aerospace company that employs 34,800 people and works with more than 7,500 British companies had one single FM supplier. The contract had been in place for approximately 20 years and had developed and evolved over this period. As a result, internal discussions had taken place around “best value” and whether the FM services should be market-tested.
The Litmus Partnership was asked to carry out a Total Facilities Management Services review and audit of the existing contract. The brief was to review and carry out benchmark audits across the entire UK sites with the aim being to carry out the audit in a phased approach due to the size and geography of the locations.
The first stages were to review the current solution and then capture and evaluate the FM services within the south of England, which comprised of over 31 sites. The FM provider was asked for the current specifications and costs to enable benchmarking against the sector. To enable credible benchmarking data, a series of national survey data and a Litmus database based upon 25 years of procurement management from over 2,000 FM tenders was consulted.
Following the completion of each stage of the review, the client was provided with a detailed report, providing a clear view of the value they are receiving from their supplier. This is enabling the company to have a clearer FM Service strategy for the future, which has enabled it to integrate the approach to the delivery of FM services into the overall Estates strategy going forward.
