Facilities Management A Strategic Management Discipline

Facilities Management

 

A Strategic Management Discipline

Aim

•       To analyse the strategic role of facilities management in business performance

•       To provide advice to student members of RICS on aspects of their practice so as to embody "best practice", i.e. procedures which in the opinion of RICS meet a high standard of professional competence.

•       To analyse strategic management procedures for Facilities Management(FM) professional tasks.

Definition of Facilities Management

•       “A discipline that improves and supports the productivity of an organisation by delivering all needed appropriate services, infrastructures, etc. that are needed to achieve business objectives."

     CEN (Comite Europeen de Normalisation) European Committee for Standardisation.

•       “…..refers to buildings in use, to the planning, design, and management of occupied buildings and their associated building systems, equipment, and furniture to enable and enhance the organisation’s ability to meet its business or programmatic objectives. Facility management thus refers to organisational effectiveness”                                                       Franklin Becker [1990]

 •         “The practice of co-ordinating the physical workplace with the people and work of an organisation, it integrates the principles of business administration, architecture, and behavioural and engineering sciences”                                                                                           US Library of Congress (1982)

•         “The practice of co-ordinating the physical workplace with the people and work of the organisation”                                                                                                                           British Institute of Facilities Management

•         “The process by which an organisation delivers and sustains support services in a quality environment to meet strategic needs”                                                                                 Centre for Facilities Management

•         “The integration of processes within an organisation to maintain and develop the agreed services which support and improve the effectiveness of its primary activities”                                        BS Institution BS EN 15221-1:2006

         Common Elements in Definitions

·         co-ordinating the physical workplace

·         people and work of an organisation

·         services

·         principles of business administration, primary activities

 

Definition of Strategy

•       “The direction and scope of an organisation over the long term, which achieves advantage in a changing environment through its configuration of resources and competences with the aim of fulfilling stakeholder expectations."                                                                            Johnson, Scholes and Whittington, 2007

 

Other definitions also:-

•       “A strategy is the pattern or plan that integrates an organisation’s major goals, policies and action sequence into a cohesive whole.”                                                                                     (Mintzberg and Quinn, 1996)

•       Grant

•       Ohmae

 

Strategy Models

•                 Position, choice and action (PCA) model Johnson and Scholes and Whittington.

•                 Strategic Alignment Model  Robert Osgood or McKinsey 7S framework.

•                 Strategic directions (Ansoff)

•                 Hamel and Prahalad’s (1990) core competences.

•                 The Whole Life Cycle Costing Model through Capex and Opex.

•                 Porter’s generic strategies on Competitive Advantage through Costs or Differentiation.

•                 Porter’s industry analysis: the 5 forces model.

•                 Abell and Hammond’s Investment Opportunity Matrix

 

 

RICS Guidance Note

The guidance note separates the facilities management(FM) cycle into five separate areas of:

•                 strategy;

•                 sourcing;

•                 operational;

•                 review; and

•                 continuous development and change management

 

Enablers

•       Underpin an action or series of actions.

•       The context or the demand constitutes the environment surrounding the boxes.

•                 legislation and statutory compliance,

•                 culture,

•                 sustainability, and

•                 external stakeholders.

•       these factors can exist anywhere in the space surrounding the boxes.

 

Action or Process of F M

Can take place efficiently and effectively through:-

1.   Leadership and governance:-

·         Structure,

·         Rules,

·         Responsibilities and

·         Decision Making.

2.         Resources

·         Capacity and

·         Capability

3.         Management information systems and data.

                  Increase transparency and information;

 

 

 

Without the Right Information-

•       No one can make decisions,

•       Improve processes,

•       Go to market,

•       See how quickly they can react to call outs, or

•       Have any knowledge of the total cost of occupancy, or

•       The value for money characteristics, or to gauge the spend optimisation, whilst improving asset value.

•       How any service has financially improved over time.

Summary

•                                                            Defining the organizational model;

•                                                            Defining all resource responsibilities and

•                                                            Defining all processes.

Developing the FM Strategy

•       Understand property resources

–  Identify existing property and key details

–  Evaluate its current performance and future potential

•       Understand the wider picture

–  Availability of finance, changes to the market or ways of working,  external risks

–  Enhancing governance and risk management

                                               

Risks

                                               

FM Strategy Process

Scope for the Facilities Manager

•       1980s…role and scope have both changed dramatically.

•       Fully understand their role and Plethora of responsibilities in this context ranging from:-

•                 The development of a FM strategy through the necessary technical skills

•                 Working with other professionals in the property cycle.

•                 The management and review of strategy at board level

•                 Communication skills up to the main board level.

•                 Implementation and service delivery of a broad range of core and non-core services.

•                 Runs and operates a business, either from within, or

•                 In partnership with, an organisation geared toward continuous improvement within the host organisation.

Strategic Facilities Management

•       Major driver of business needs and efficiency through genuine commercial returns.

•       Substantial financial or service improvements as appropriate, by supporting and improving the effectiveness.

•       Ensures compliance to CSR while protecting the organisation and helping to provide a significant contribution for the environment.

•       A strategic influencer within an organisation (rather than a mere cost category).

•       Aligning with an organization's core business strategy, and primary activities as the core thrust.

Facilities Management Core?

Whole Life Cycle Costing

FM Strategy; Strategic Planning

•       An overview road map in the property cycle has to be developed and understood.

•       To focus on short and long term vision, mission, values and operational drivers.

•       High-level strategic key performance indicators into the service requirement documentation to be introduced.

•       The FM strategy will be constructed in and signed off by the highest appropriate authority within that organisation.

 Refer to Derby Strategic Management Matrix (accessed 2010)

Strategic Alignment

Strategic Alignment Model cont.

Evaluating Strategic Facilities Management Options

•        Mission and values

•        Customers and markets

•        Products and services

•        Distinctive competencies

•        Values and cultures

 

•        Quality-cost, quantity and location of space

•        Technology of space

•        Property practices

–    CRE/FM staff

–    ITC

–    Financial models

–    PM processes

–    Change management

           

Reading List

•      Building Research Board, and National Research Council, 1993, Fourth Dimension in Building: Strategies for Avoiding Obsolescence Studies in Management of Building Technology, National Academies Press

•      Cole, G. A. (2004) Management: Theory and Practice. 6th Edition, Thompson, UK

•      Exploring Corporate Strategy – Gerry Johnson, Kevan Scholes, Richard Whittington, 8th edition, 2007, Pearson

•      Friday S. 2003, Organization Development for Facility Managers: Leading Your Team to Success, Amacom/McGraw-Hill Book Co. Maidenhead, Berkshire

•      Harvey, R.C. and Ashworth, A. (1997) The Construction Industry of Great Britain.  Butterworth-Heinemann, Oxford.

•      http://www.ce.cmu.edu/pmbook/03_TheDesign and  Construction Process .html

•      Martin J. 2009, Life Cycle Costs and Sustainability, Building Cost Information Services of RICS.

•      Porter, M. (1980) Competitive Strategy: Techniques for Analysing Industries and Competitors. New York: Free Press.

 

Reading List (contd.)

 

•    Porter M. 1998, Competitive strategy: techniques for analysing industries and competitors

•    Rasiel, E. and  Friga,P. N. , 2001, The McKinsey Mind: Understanding and Implementing the Problem-solving Tools and Management Techniques of the World's Top Strategic Consulting Firm, McGraw-Hill Professional, Columbus.

•    Reid, E (1988) Understanding Buildings: A Multidisciplinary Approach. Harlow: Longman.

•    RICS ISURV 2009, The strategic role of facilities management in business performance 

•    Riley, M., Cotgrave, A. (2004) Construction Technology 2: Industrial and Commercial Building. Basingstoke: Palgrave Macmillan.

•    Thompson Strickland 1996, Strategic Management Concepts & Cases

•    www.derbymanagement.com/knowledge/pages/strategic/audit.html – An example of a checklist for evaluating strategic capabilities