Most companies that have achieved certain a level of growth and/or maturity, recognize the need to shift the responsibility of administrative and operational functions that divert organizational focus and resources away from their core business. Wherever possible, companies seek to outsource these functions – real estate and facilities management being one of the most significant in terms of time, complexity and cost.
In addition to considering organizational growth and/or maturity as a decision-making factor, companies need to assess the risk transference variable, or the risk they own versus their service provider(s), which is even more important in the context of COVID-19. A strategic facilities management partner allows an organization to devote its resources and efforts to ensure business continuity during the pandemic while delegating all facility-related issues and activities to its facilities management provider.
Facilities management support involves:
- Strategies for preventing and preparing for a crisis or emergency
- Managing equipment and facilities during a crisis
- Supporting business continuity during and after a crisis
Studies consistently demonstrate that real estate is the second-largest cost item companies face, behind payroll; and facilities management encompasses a major portion of real estate costs. In times of uncertainty, a facilities management provider can play a key role by exploring ways to increase operational and economic efficiencies related to the client´s workplace and services provided to its users. To the degree an organization seeks to drive efficiency, mitigate risk and restructure its financials, it is well-advised to assess its real estate and facilities management model.
Hard Services versus Soft Services
Services that comprise the overall management of a building are categorized as hard or soft services. Hard services–such as HVAC, lighting and electrical systems–impact workplace quality and employees. Though employees may not directly interact with hard services, they are aware if any of the services fail to function properly. Conversely, employees do interact with soft services, including janitorial, meeting room management, cafeteria/food services, grounds maintenance and many others.
Siloes versus Integration
Company executives, who recognize the value of outsourcing hard and soft services, may initially adopt a Facilities Services approach, where each service is treated as a silo. A company contracts with multiple vendors for differing services: janitorial services, electrical systems, catering and others. Depending on the geographic distribution of its real estate portfolio, a company may need to contract with a different set of vendors for each site.
By definition, a siloed approach indicates little to no communication or collaboration among different providers. Additionally, without a holistic facilities management practice, there is no centralized strategy or budget, no process standardization and a lack of a unified performance management or continuous improvement plan.
In contrast, a Facilities Management approach is a precondition for reaching a higher state of real estate and facilities management maturity. This approach integrates a company’s array of hard and soft services at all sites across its portfolio. The company contracts with a single provider with expertise in the full range of services required by its portfolio. The provider then tailors and designs a standardized site management and service management approach for the company’s unique business and culture.
The benefits of integrated Facilities Management
One common misconception about the decision to outsource facilities management to an integrated provider is that it is a suitable option only for large enterprises. In reality, it is a practical choice for any business seeking to ensure consistency, gain transparency, effectively manage risk, reduce costs and improve efficiency across its portfolio.
Through a structured discovery process, a facilities management integrator serves as an eye-opening agent with deep facilities expertise, introducing ideas and technologies of which a client may have been previously unaware. A business’ decision-makers need to understand the current state – what facilities services are already in place, existing costs and risks to which the company is presently exposed.
With the visibility provided by an integrated facilities manager, a company can identify previously unknown risks; and understand, holistically, office or production-facility spending as well as cost-saving opportunities in the form of sustainability and energy management initiatives. With an understanding of a business’ culture, an integrated facilities management partner can introduce new ways of conceiving the workplace. Studying how employees interact with the space, a facilities manager can conceptualize ways to increase productivity and employee satisfaction – a topic especially important to businesses competing to attract and retain talent.
Crucial to delivering real, ongoing value in an integrated, strategic facilities management approach is the provider’s ability to develop Key Performance Indicators (KPIs), which measure the performance of property and people, and identify the links between them. For instance, a strategic partner may combine data and benchmarks to drive improvements in energy usage.
When a company considers its wide array of real estate and facility-related functions and services, from plant and equipment maintenance, energy consumption, and technical maintenance to employee workplace experience, outsourcing makes sense. Once the decision to outsource has been made, the next step is to adopt an integrated facilities management model and partner with a provider with relevant expertise and resources. Facilities management allows a company to manage its portfolio in a strategic, standardized and proactive manner, while transferring responsibility for assessments, risk mitigation and cost savings to an experienced service provider.
Sales and Change Management Managing Director