More often than not, FM providers and consultants are focused on specific tactical outcomes and fail to deliver effective support to an organisation’s overall business strategy. It doesn’t have to be this way – FM can offer a lot more tangible bottom-line value than you might think.

When an FM procurement process starts, there’s often an assumption that certain solutions are needed – whether the procurement process is being managed in-house or by a consultant, it’s much more common to request specific elements of the required service than it is to actually set out the challenges that need to be addressed. The level is pretty basic, too – you’d be surprised at the number of times that the scope of the conversation is ‘we need a helpdesk and CAFM’, even when consultants have been involved.

This leads to the tender process having limited effectiveness before it even begins. It means that only solutions which tick the right boxes will be considered when in actual fact those boxes might not be the right ones to tick in the first place. Before the tenders have even been received, there’s already a good chance that the resulting FM solution won’t fulfil its potential to benefit the business, even though on paper, according to the criteria used, it seemed to be a perfect choice.

A more effective way of approaching FM procurement is for briefs to focus on the organisation’s wider business objectives – setting out the ‘why’ rather than the ‘how’. After all, you can only find the right answers by posing the right questions. This is also the only way that innovation can be introduced; prescriptive tender processes only invite standard solutions.

It’s also important that FM providers engage more fully with the potential client, to understand the estate and the business itself, rather than only basing their proposal on what the client wants – it might be that the provider’s perspective can offer fresh thinking. This is a process that can take some time and effort. It’s crucial to take time to look at the way FM currently operates, the financials, the performance of the incumbent supplier, the structure of the organisation, and who’s who, amongst other considerations.

Only with an in-depth understanding of a business can the true opportunities for FM to add value be discovered. We’ve found that most companies have similar objectives initially – save money, improve compliance, improve reactive efficiency – and it’s a case of demonstrating to them the power of FM to make a difference to their bottom line in ways they might never have expected.

Part of this process is also illustrating the benefit of allocating budget to proactive maintenance – which can be counterintuitive to some businesses if they are used to only spending on an asset when it fails. FM does tend to be one of an FD’s go-to choices when looking to reduce costs, for the simple reason that it’s easily understandable and can be easily cut (far easier to say ‘no’ to a repair than to reduce costs by renegotiating with suppliers in other parts of the business). But we can tell many real-life stories where this decision has come back to haunt a company and cost them more in the long run.

I tend to use the car analogy to explain the logic of the proactive approach – if you have it serviced at the recommended intervals, keep an eye on oil and coolant levels, make sure tyre pressure is correct and the tread depth acceptable, and generally keep an eye on its performance, then you’ll find it’s much less likely to break down unexpectedly.

With this understanding in place, we often gain permission to put in an alternative proposal. By aligning our helpdesk service and system to the client’s business objectives, we can make sure that their FM budget is working for them in the most effective way possible.

We don’t just think about how a business currently works, and the corresponding priorities, but look to the future, too. Yes, we often focus on non-trading issues – such as a roller door not working at a trade counter business, or a hot water supply failure at a restaurant – because the inability to take in revenue over a period of time often costs a business far more than the emergency repair itself, but we also take into account where the business (and its industry) is heading.

For example, we have tailored FM strategies to best support programmes of new openings and refurbs so that the client might diversify their offering and appeal to a wider customer demographic, or to support the contraction of an estate and control the cost of dilapidations. And we do it in such a way that the strategy’s effectiveness can be proven with robust data. One particular example of this springs to mind – we had a client who wanted to finish a tenancy early, and the landlord indicated a bill of well over half a million pounds, based on the fact that he thought the client couldn’t demonstrate that they’d been looking after the building to a certain standard. However, we were able to spend just a few hours putting together the data required to prove that the standard was indeed met, leading the landlord to agree to a two-thirds reduction of the proposed costs.

We’re also careful to take into account any longer-term possibilities indicated by disruption in the client’s sector – for example, in the restaurant industry the phenomenon of ‘dark kitchens’, a product of digital disruption in the form of app-based home delivery food sales, will likely have a huge impact. In FM terms, restaurant brands that develop their businesses in this direction will have an estate that is much less ‘visible’ and has fewer seating spaces, and the factors which lead to restricted trading are different (in fact the level of requirement is lower owing to the lack of customers on-site). This will require a shift in FM provision to ensure the best value is maintained.

This bespoke approach requires quite a deep dive into business performance data across an estate, including the turnover and profitability for each property, as well as the customer footfall and expenditure on FM, so that the most lucrative sites can be prioritised – and any loss-making sites, retained purely to prevent competitors getting a toe-hold in that local market, can be dealt with more economically.

It’s not just a thorough understanding of the data that’s required, either. The structure of an organisation has a bearing and it may be that there are crossovers (or uncertainty) of responsibility between the different divisions. FM can be relevant to maintenance, energy, lease and purchase, capital expenditure and internal projects, but if there isn’t clarity and robust communication practices – to ensure that staff look beyond their remit to some extent – then money will likely be spent in a less than efficient manner.

For example, many businesses have separate departments dealing with OPEX and CAPEX. Rarely do either of the departments align their information, creating additional cost by installing new assets via the maintenance side of the business, then removing via the capital project side of the business – simply because information on the building’s assets was not stored centrally, to be accessed by all, and it hadn’t occurred to anyone that there might be a potential crossover of remit. It’s also helpful to be aware of any departmental sensitivities since any move towards self-protection can block efficient working. I’ve seen companies almost miss out on big savings because a department has declined to interrogate costs fully, for whatever reason.

With all this collaboration and transparency, FM strategy can be devised and delivered in a way that can make a tangible difference to a company’s bottom line. But as an industry, we have a job to do to ensure that clients are aware of the scope for FM to support their wider business objectives and help them to put in place the right measures to be able to achieve these benefits.

Need to simplify your FM processes? Call 01183 380 300 to speak with a member of our team or send an email to sales@fmmadesimple.com to schedule a call.

Energy regulations may be mandatory, but that’s not to say they should be viewed only as a stick – there’s a carrot for the taking, too. Derrick Hidden, explains how businesses can exploit the cost-cutting opportunities to be had, rather than merely view compliance as a way of avoiding a ‘green tax’.

Compliance certainly isn’t the first area of business you’d associate with growth and profitability, but to ignore the potential it offers in terms of money-saving is definitely missing a trick. Admittedly, ESOS, Part L and the EU directive on energy labelling for lighting might cynically be viewed as a way to obtain yet more money out of UK business – a ‘green tax’ if you will – and it could be considered that they’re more a way of paying lip service to the UK’s carbon reduction commitment than actually engendering a more positive attitude to energy efficiency and sustainability. However, flip your perspective and the picture becomes a lot more positive.

The energy efficiency measures required for compliance can often pay for themselves fairly quickly and after the payback period the savings build-up – which can then be either be used to fund further energy-saving measures or be redirected to another part of the business requiring investment. Indeed, it can even be worth considering projects that go over and above basic compliance requirements if they offer an opportunity to make further significant savings, to have an even more positive effect on the business’s bottom line.

An important first step in the process is to engage a consultant with the knowledge and experience to tailor all their recommendations to your operation’s needs – industry-specific expertise is important, on top of solid technical credentials. This will make sure all suggested energy-saving measures will be business appropriate, compliant, and are presented in a way that is business-relevant – always an important consideration when there are decisions about expenditure to be made at the board level.

Since many companies find themselves on ‘rollover’ contracts once their fixed rate has ended – and are therefore paying higher tariffs than necessary – negotiating a new deal with their energy provider is often the best first step, as it can save significant amounts of money (and it’s often just a case of asking the supplier to transition the business to a better-value tariff). This may not be a compliance issue but given falling wholesale energy prices it makes sense to begin an energy efficiency drive with the lowest hanging fruit and use the resulting savings to fund further projects (whether for compliance or to raise efficiency levels even further), starting with the options which deliver the biggest bang for their buck.

In fact, only a relatively small initial capital expenditure is required, provided this sort of savvy approach is taken and the energy-efficiency roll-out is well planned. By focusing on the most inefficient areas first and using the saved funds to pay for the next step in the programme, you will eventually reach a point where the whole estate has been upgraded and runs at optimum efficiency, at a minimum monthly cost. Of course, after this point, the reduction in Opex will continue to be of benefit, as the savings can be reinvested in other parts of the business, perhaps even to fund growth.

Low hanging fruit

In terms of energy efficiency projects, LED lighting is a good place to start and could be split into two (or more) phases, depending on the circumstances found across the estate and the amount of Opex savings generated by the tariff renegotiation. The key to success is to tackle the most inefficient areas first, then measure the savings made by doing the initial tranche of works – considering the amount spent on lamps and maintenance, as well as the energy bill saving – and use this to guide the budget for each subsequent phase of upgrades.

Once light fittings have been upgraded (or maybe at the same time as these works are being carried out), consider a better lighting control system, since up to another 60% can be squeezed out of the energy consumption that way. HVAC systems should also come under scrutiny. Could the boiler be renewed with a more efficient model? If you don’t already employ a best-practice maintenance programme with a water treatment schedule, then implementing this simple measure can result in lower energy consumption, while upgrading controls, and ensuring extraction and air condition filters and ducting are properly clean will make a difference too.

Another sensible strategy for reducing energy costs is behaviour change – but this isn’t free, as many people assume; it will take time, money, and – perhaps more challengingly – a buy-in from all stakeholders. Since employee engagement is key to success, good internal communications are critical when it comes to disseminating information about how workers should modify their behaviour, what they should do and when, and also why it is important. More significant operational changes can also help lower energy bills – for example, can automation allow you to reduce the need for people to be working in a certain part of the asset, so reducing heating and lighting requirements in that area?

As well as benefiting from the energy bill savings that can be made from efficiency upgrades and operational changes, when you link this sort of project together with PPM and reactive activity you can find savings in implementation costs, too. For example, while warehouse lighting is being replaced, you could plan to use the scissor lift to clean the skylights and make roof repairs, thus offsetting the cost of the cherry picker to multiple jobs. Naturally, this leads to a greater CapEx cost within a set amount of time, but in fact, better value can be achieved.

There’s so much scope to save money through this cascade approach to energy efficiency measures, and it’s all triggered by the need to comply with the relevant regulations – which are obligatory anyway. So, it’s worth looking beyond the hassle and expense of energy efficiency compliance, and re-framing the task so that its true value can be realised – so many businesses only see the stick, rather than the juicy carrot that’s there for the taking.

Need to simplify your FM processes? Call 01183 380 300 to speak with a member of our team or send an email to sales@fmmadesimple.com to schedule a call.

Are you looking to build a more profitable business? Companies with multiple properties, facilities, and assets strive to streamline their operations, ensuring alignment with their present and future strategies.

Cutting costs or raising prices will not drive performance; reimagining and re-engineering service delivery models to transform change to your services in line with your long-term goals will provide success.

Transformation is a recognised skillet executed by change agents delivering real transformation, working alongside clients, and supporting them to achieve their financial and performance objectives carrying out an initial assessment on the three business pillars—property, people, and the supply chain—to assess the direction of transformation.

Post transformation, you will have improved operating models, based on best practices, lean methodologies, established supplier partnerships and transparent cost models delivering win-win solutions.

To achieve this success the following areas require:

• Access to our IP and estates strategies.
• Opportunity assessments to ensure the possible can create change.
• Professional support and industry knowledge.
• A support function to both procurement and property departments.
• Bottom line improvement and business growth.
• An estates department aligned to business strategies.

With a successful industry track record if you have a requirement you’d like to discuss with our expert managers please contact us by calling 01183 380 300 to speak with a member of our team or send an email to sales@fmmadesimple.com to schedule a call.

Only with an in-depth understanding of a business can the true opportunities for efficient estate management value be discovered. We’ve found that most companies have similar objectives initially – save money, improve compliance, improve efficiency – and it’s a case of demonstrating to them the power of realigning their facilities management to make a difference to their bottom line in ways they might never have expected.

Facilities management estate strategy can be devised and delivered in a way that can make a tangible difference to a company’s bottom line. But as an industry, we have a job to do to ensure that clients are aware of the scope for and support to their wider business objectives and help them to put in place the right measures to be able to achieve these benefits.

Reviewing how an estate is operating can be complex due to the number of moving parts, industry sectors, partners, leadership direction and decisions required all creating a very large operational exercise that must be controlled to forecasted property budgets. Further management concerns align to building statutory compliance where ensuring safe ad compliant properties will be high on any company`s agenda for the protection of all building users, the client’s brand, and management boards alike.

Need to simplify your FM processes? Call 01183 380 300 to speak with a member of our team or send an email to sales@fmmadesimple.com to schedule a call.