Does your FM strategy actually support your wider business objectives?

Unlocking Strategic Value: A New Approach to Facilities Management

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.

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 the 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 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 which develop their businesses in this direction will have an estate which 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 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, collect and use the data, and help to put in place the right measures to be able to achieve these benefits.