Alan Masterton discusses right-sizing the facility management (FM) organization. He notes that FM organizations must prove their worth through objective comparisons of their service delivery models. The key aspects of structuring a service delivery model include defining enabling processes to translate service needs into delivery, and deciding which services to retain in-house versus outsource. High levels of complexity within the organization can lead to increased costs and errors. Defining the right staffing levels requires breaking down estimates into detailed functions and activities that are allocated to the targets and processes of the service delivery model. Demonstrating value involves aligning results from satisfaction surveys to benchmarks in order to balance service efficiency and effectiveness.

1. Alan Masterton: “Rightsizing the FM Organisation”, IFMA conference, June 10
RIGHT SIZING THE FM
ORG A N I SATI O N
AN APPROACH TO ORGANISATIONAL DESIGN AND RESOURCE
DEPLOYMENT
A L A N M A S T E RTO N , M B A , F R I C S , S C U P
The Global Financial Crisis has sharpened clients’ demands for budget and headcount reductions making it even
more important for FM organisations to demonstrate that they deliver value for money. But these days, demonstrating
good value must go beyond simple marketing slogans; the FM organisation must prove its worth by objective
comparisons of its service delivery model (the structure, skills and systems which it uses to deploy and deliver its services).
To retain its budget or win the contract, it must provide the right size organisation for the tasks required.
Right-sizing an organisation is about balancing cost efficiency and service effectiveness; too efficient risks unhappy
occupants; too effective risks budget cuts imposed by the Board.
Appreciating Different Service Needs
Facility Management, “FM” has an understandable focus on activities within the building.
Nonetheless, FM organisations can contain a wide range of functions and responsibilities, including
security, purchasing, mail, catering and information technology.
The complexity is frequently compounded by the range of stakeholders within the FM service
delivery. From a client’s perspective, low price and top class service can often be at odds with the
service provider’s wish for repeat business, referrals and reasonable profit margins.
Service complexity and conflict can arise from the wide range
of FM services and stakeholders
Service confusion or conflict can result also from internal reporting lines; an FM department
reporting via Finance or HR will likely have a different perspective or bias to one which reports
directly to the main board.
Structuring the Service Delivery Model
A service delivery model, “SDM” defines the “who, where, what” aspects of the FM service.
Early examples of the SDM includes McKinsey’s “7-S” model 1 which famously examined the balance
and impact of strategy, structure, systems, skills, staff, style and shared values. Later, Kaplan and
Norton’s “Balanced Scorecard”, provided a management system to target performance by focusing
on measures for financial performance, customer knowledge, internal processes and learning and
growth. Current examples, such as the Hackett Group’s Service Delivery Model, include elements
1
Refer to “In Search of Excellence”, Peters and Waterman 1982
1

2. Alan Masterton: “Rightsizing the FM Organisation”, IFMA conference, June 10
such as sourcing, process design and governance; all of which are relevant to the modern FM
organisation.
For the FM organisation, enabling processes, i.e. the rules and procedures that translate service
needs into service delivery are arguably one of the most important aspects of SDM design.
The translation of service needs into service delivery via enabling
processes is one of the most important aspects of service design
On the client side, service sourcing, i.e. deciding which services must be retained in-house or
potentially can be outsourced is another key element in the design approach.
Overcoming Complexity
Organisational complexity arises from the amount of differentiation within an organisation due
to authority, controls, staff attributes and the range of services and technologies. High levels of
complexity can lead to longer service durations, higher error rates and higher costs.
Complexity can arise from a number of factors. In addition to the differing service needs and
perspectives described above, complexity can be caused by the number of levels or layers of
management. In a 2001 IFMA survey2, one third of FM departments surveyed had three levels of
management but 40% had four or more levels.
High levels of complexity can lead to long service durations,
higher errors and higher costs
Lack of standard definitions is another source or complexity and confusion. For example,
research by the Hackett Group identified a 72% difference in finance department staffing levels
depending on 100% common definitions versus less than 70% common definitions.
Increasing use of integrated systems is providing a key source of complexity reduction; where the
management of data and rules offer sources of efficiency, process collaboration and risk
minimisation. Many organisations are taking this further, shifting from systems that support the
existing activities and using the emerging field of enterprise architecture to provide the logic and
structure for their entire SDM.
Defining the “Rightsize” Organisation
Staff costs are typically one of the highest costs in FM, therefore in addition to defining the
SDM, organisations must consider the “right” staff numbers to deliver the service. At a macro level,
guidance on staff numbers can be obtained from a number of sources including internal, historic
performance, industry and professional associations.
2
IFMA “Designing the FM Organisation”, 2001
2

3. Alan Masterton: “Rightsizing the FM Organisation”, IFMA conference, June 10
It is important to break down these high level estimates into detailed functions and activities and,
if possible, to allocate these to the targets and processes of the SDM. Such allocations can help
identify where your current key processes may be over or under resourced.
Some industry associations are beginning to align and group such measures to well established
service models. For example APPA, one of the leading associations for FM in the education sector,
now provides its facility performance indicators, including staff and cost benchmarks, in a Balanced
Scorecard format.
Demonstrating and Delivering Value
The Global Financial Crisis has sharpened clients’ demands for budget reductions, making it
even more important for FM organisations to demonstrate how they are delivering value. In theory,
the price that should be paid for a service is the price of the next best alternative and plus or minus
the benefits of your service. The challenge is to adequately identify and quantify these benefits.
Surveys are especially useful when aligned to the corresponding
service processes and benchmarks
One important approach is the use of service satisfaction surveys. Correctly designed and
targeted surveys can provide powerful insights into the adequacy of your services and provide
leverage to overcome executive opinion and financial pressures.
Surveys are especially useful when their results are aligned to the corresponding service processes
and cost and staff benchmarks, enabling the FM organisation to best balance these critical elements
of service efficiency and effectiveness.
Summary
Rightsizing the FM organisation is a wide-ranging exercise, requiring an appreciation of different
service needs and stakeholders, deciding on and structuring an appropriate service delivery model
and overcoming organisational cost and complexity.
Defining and demonstrating the value of the “right-size” organisation is a particularly important
challenge. This can succeed by aligning the results of detailed service satisfaction surveys to the
results of service process benchmarking. This provides the astute FM manager with evidence on
which to balance service efficiency and effectiveness and satisfy the demands for service levels and
margin protection.
3