Lecture to students at Liverpool John Moores University in December 2013 on Cost Saving Strategies and Innovation in Facilities Management.

1. Facilities Management
Innovation & Cost Reduction in
FM
Author: Mark Whittaker
Date: Tuesday 10th December 2013

2. Lecture Content
1.
Getting to know each other.
2.
The FM Market
3.
Innovation in FM
4.
Cost Saving Strategies
5.
Careers
6.
Questions and Answers.

3. To start ….a question about YOU
How many of you have a firm idea what career path you wish to
take, post graduation?

4. My Career Path

5. When I was 18……..my career choice…

6. Yes, I was a University Student Once

7. My Path into FM

8. M.W.I.M.

9. 2. The FM Market

10. The basics
What is Facilities Management?
“Facilities management is the integration of processes within an organisation to
maintain and develop the agreed services which support and improve the effectiveness
of its primary activities”.
(CEN the European Committee for Standardisation)
Facilities management encompasses multi-disciplinary activities within the built
environment and the management of their impact upon people and the workplace.
It contributes to the delivery of strategic and operational objectives. On a day-to day
level, effective facilities management provides a safe and efficient working
environment, which is essential to the performance of any business – whatever its size
and scope.

11. What is at the core of Facilities Management?
"A profession that encompasses multiple
disciplines to ensure functionality of the
built environment by integrating people,
place, process and technology."

13. History of FM

Cost-cutting initiatives of the 1970s and 1980s led organisations began to
outsource ‘non-core’ services

Integration of the planning and management of a wide range of services both
‘hard’ (e.g. building fabric) and ‘soft’ (e.g. catering, cleaning, security,
mailroom, and health & safety) to achieve better quality and economies of
scale

Formation of the BIFM in 1993, followed by the development of specialised
training and a qualification

Step-change with the Private Finance Initiative (now Public Private
Partnerships), becoming an integral part of large-scale projects to manage,
replace, and upgrade the country’s infrastructure and public service
facilities. This new approach was swiftly followed in the private sector and
abroad.

14. Current Market Size
Estimates vary; market research suggests that, in the UK alone, the
sector is worth between £40bn and £95bn per annum
“We need to let more people know just how important the FM
industry is in the running of the country as well as the contribution
the FM industry makes to the UK economy. We represent £40bn in
turnover and over 500,000 employees; 5% of GDP is a significant
amount.”
Chris Hoar, Chief Executive

15. Who are the major UK FM players?

16. A Question
Why do you think Facilities Management is often overlooked in the
UK Corporate Boardrooms?

17. Future Trends
The report also mentions that public expenditure, climate change and
economic growth will be amongst those with the biggest impact on the
industry
“Some single service providers may lose share in the medium term as larger
clients seek to reduce their costs further and move toward a preference for
‘bundled service provision’.”

18. The Future?
ISS 20:20 Vision
1.
Capitalism Reinvented
2.
Great Transformation
3.
Sustainable Business
4.
Fragmented World

19. 3. Innovation in FM

20. What is Innovation in FM?
“Innovation in facilities management is the introduction of a
new product or process, which delivers tangible and
measureable benefits in terms of operational cost reductions,
increased efficiency and optimising building usage and
performance.
It is not merely process improvements.”
Can you do better?

21. How do others define “innovation”?

22. Why is Innovation important?

23. Is Innovation being delivered in the UK?

Cost , innovation (86%) & local
supply chain most important in
tender evaluation

77% of cases innovation
happening

24. Highlights

25. The “Innovation Environment”
“an external supplier might bring
innovation and efficiencies that are beyond
the scope of the existing team. They will
also be more familiar with procedures for
help desk, customer relationship
management and the handling of change
Requests.”
During the design stage of buildings, the
prospective accommodation is modelled to
assess its effectiveness to occupy, its
efficiency to heat, cool and light and to
gauge whether the resultant environment
will stimulate innovation and productivity
for its prospective occupants”

26. Some Barriers to Innovation





Finding the right partner
Cost
Lack of finance- internal & external
Lack of qualified personnel
Uncertain demand

27. Key Innovations in Facilities Management

28. (1). Building Information Modelling (BIM)

29. (1). Building Information Modelling (BIM)
BIM Benefits:

Co-ordination & Collaboration

Easier Maintenance of Building Lifecycle

Greater connection between building designers & end users

Greater customisation and flexibility

Easier conflict detection & resolution

Optimisation of cost

Improved asset database & understanding

30. Golden Thread
GSL will be mandated in 2016 for all central government projects
(new build and large refurbishments)

31. (2). Space Utilisation

Greater analysis of how building
assets are being used.

Identification of cost savings as
companies downsize operations

More scientific measurements of
space utilisation, particularly in
building design

A key driver in the design of new
properties, particularly within the
education sector

32. (3). Flexible Workspaces

“Hot desking” more common

More flexible shift patterns

Greater home working

Greater focus on enjoyable working environment
& the impact on businesses performance

33. Agile Workspaces

34. (3). Flexible Workplaces – Media City

35. 3). Flexible Workplaces – 1 Angel Square

36. (4). Greater Collaboration/Partnership

Private Finance Initiative (now Public Private
Partnerships) with crucial element of building life
cycle costings.

Longer term contracts encourage investment

Greater outsourcing

Shared targets and goals & reward schemes

37. Advantages of Longer Term Contracts

Partnership Approach & Relationship Building

Joint Goal and Target setting

Stability and reliability

Supplier Investment

Innovation in Service Delivery

Reduced Procurement costs

Flexibility in service delivery

38. (5). New/Enhanced Technology





LED Lighting
Voltage Optimisation
More integrated Building Management
Systems
Smart Energy Meters
Data Loggers

39. (6). Outcome Based Contracting
“A shift in focus from activities to results and from how a
programme operates to the good it accomplishes.”

40. (7). Sustainability

The ‘Green Agenda’ will grow in importance in the future

Helping customers achieve their Carbon Reduction Commitments

Green Technology, such as biomass boilers, Combined Heat & Power (CHP)
systems

Focus on Ethical Trading, Bio-diversity and Waste Management and recycling

41. (8). Social Media in FM

42. Most significant FM Innovations?
“I think the biggest impact has been the way the new
technologies - GPS/Tablets/Social media etc. have been
utilised by different organisations to eliminate wasted
process and provide smarter service.” Martin Pickard,
FM Guru Consulting
“The biggest change for me has been the development of the
outsourced market. There are a number of suppliers in the
industry who now really understand what FM is all about and
are providing a service that matches the clients’ needs.” Julie
Kortens, Head of FM,Channel 4
“The one area which does look as if it will impact is the advent of
Building Information Management systems, albeit that these systems
are very much in the infancy and current CAFM technology is not up
to speed with it.
Iain Murray, Principle Consulting

43. Five Key Benefits innovation can deliver in
FM?

44. What can stifle innovation?






Price based procurement
Short term contracts
Lack of partnership/collaboration
Mistrust
Lack of internal support for FM at Senior/ Board
Level
Being afraid to take risks

45. What does the future hold?

More flexible & better utilised workspaces

Buildings designed & built with greater engagement with
users and Facilities Managers

Greater outsourcing in a bundled service provisions

Greater building and asset knowledge

Greater focus on larger, leaner FM providers delivering cost
reduction strategies

Professionally recognised “Collaborative Working”
standards

Longer term contracts

Joint “Innovation Strategies”

46. 4. Cost Reduction Strategies

47. 5. Question
With the introduction of Tuition Fees how can UK Universities save
money on their FM Spend ?

48. Clashing Priorities

49. Question
So what practical steps can a UK University take in the current
climate to improve cost efficiency of their FM spend?

50. Cost Saving Strategies
Testing the
Market
Reduce
Operational
Costs
Fix not cure
Cost
Saving
Obtain
Efficiencies
Re-organise
Reprioritise
capital
spend
Reduce
Service
Scope

51. Practical Steps

Review operational spend:
? Space Utilisation/ mothballing
? Utilities spend and enter new contract with guaranteed savings?
? Reactive spend
? Altering equipment settings
? Reduce courses and spaces
? Maintenance spec reduced ?
? Investment in Capital Expenditure Projects such as BMS, lighting, voltage
optimisation

52. Practical Steps

Review Operational Delivery Model:
? Worth re-procuring both Hard & Soft FM services?
? Altering of shift patterns/opening times.
? Can more services be outsourced?
? Will an integrated FM model a deliver improved costs or de-bundle
services?
? Can the delivery be smarter? (Up-skilling people).

53. Practical Steps

Exploit other revenue streams?
?
Attract greater numbers of foreign students to make up shortfall?
?
Gain rental income from buildings/sub-let?

54. University of Liverpool experience
The current situation





550 students down in 2012/13. 10% down
£1.6 million revenue down.
3no sites mothballed & 1no partially empty.
Refurbishment plans put on hold for halls of residences (£250,000)
Revision of capital expenditure plans
The answer




Ongoing analysis of property usage
Selling off of property to raise funds
Reduced maintenance (statutory only) on under used buildings
Targeted attraction of foreign students (Chinese)

55. 5. Careers

56. Careers In FM
An excellent source is:
The guide specifically deals with:
1. What is FM
2. Career Paths
3. Qualifications
4. Skills
5. Company Profiles

57. Common Twitter Hashtags

58. My advice
1.
2.
3.
4.
5.
Research the market you want to work in & seeks the views of others
Identify your personal strengths
Identify what potentially excites you about FM
Build good networks through social media & BIFM
Be different, distinctive & sell yourselves, “what benefits could you
bring to an organisation”
And finally “persevere lad…. you’ll get there.”




Take the knocks
Be flexible
Stay positive
Move on

59. And Finally……Do keep in touch
Whitbagsinfm
@Whitbags
http://whitbagsinfm.wordpress.com

60. 6. Questions & Answers