Facility management - Appunti

Facility management lab

16 September 2020

Introduction

Building: it’s just one side of the medal, the other one is composed by all the services related to the building itself.

Facility management

Facility Management facilitates the simplification and the efficiency of an organization, this is the reason why it assumes a relevant role in an organization of a company.

It comes from the outsourcing of those services that the company considers: not strategical + not belonging to its core business. To manage building, people and services there is the need to a professional approach: separate the core business and the side related to the functionality of the building.

It’s a real devoted function inside a company, finalized to the management of all the services related to the building. Devoted function such as finance and HR.

Buildings are becoming more and more complex this is the reason why facility management is so important, because it helps in manage complex buildings, allowing to coordinate different activities in order to provide to the client the best service.

Practice of coordination between the place of work, the users and the work done by the companies; a good facility manager is a coordinator. It’s a multidisciplinary approach.

It isn’t base of literature but on model and experience which can also come from other countries; this is the reason why an international approach is fundamental. (business model + experiences).

Building

• Owner.
• Tenant (locatario) client of FM, it doesn’t care about the owner but about the users.

Facility Management has to fit the answers of building, people and services. It has to manage complexity.

FM was born in USA in the 70s, when large private corporations started to feel the need to pay providers able to manage the main and most requested activities regarding the management of their RE assets, in order to save time 9 manage the main and most requested activities regarding the management of their RE assets, in order to save time for core business activities.

Property life cycle

A new cycle:

• Increasing complexity: of projects.
• Increasing complexity: of process.
• The role of the client/end user.
• Point of view of the user has become more and more important.
• Increasing importance of control/monitoring.
• Increased demand of specific real estate skills.
• Increased demand of quality and professionalism.
• Shared standards and practices.

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Building life cycle

Construction activity = we have data about this. (prezzario).

Facility and maintenance = it’s very difficult to have data and benchmark. It’s important learn how to set up the cost of services.

Building life cycle costs:

• 15% initial costs: planning + design + construction + site development.
• 85% future costs: energy + maintenance + staff and operations + renovations.

In 15 years the expenditure for maintenance and operation reaches the same amount spent for design and construction.

NB: If we are able to design building, we are able to design services.

We have to know the design, the way through which doing maintenance in order to understand at the end which is the provider able to give this service.

Added value of FM, data and information that we can get in order to manage the complexity.

Client

Wants to have one single supplier which is a general integrator of all the different services and facilities a global provider able to manage everything.

There’s a single point of contract.

Very important to understand the characteristics of the client! It’s one of the first step.

Main topics

• Demand/supply for facilities management services.
• Facilities management services design.
• Service providers selection.
• Contract models and remuneration systems.

FM’s definitions

The practice of co-ordination between the place of work, the user and the type of work done by the companies; it integrates the principles of administration, architecture, psychology and engineering. (IFMA)

FM includes multiple disciplines to ensure functionality of the built environment by integrating people, places, processes and technology.

FM is therefore the system of knowledge, methods and tools that enabling the optimal management of all the services for buildings/RE assets, in close relationship with user’s need. (Ciaramella) 12

What is FM?

What is FM?

The effective management of place and space, integrating an organisation’s support infrastructure to deliver services to staff and customers at best value whilst enhancing organisational performance. (Rics Professional Guidance)

The knowledge above facility management is a mixture of economy, engineering and law science: integration.

«The practice of co-ordination between the place of work, the user and the type of work done integrates the principles of administration, architecture, psychology and engineering» (IFMA Andrea Ciaramella Andrea Ciaramella)

17 September 2020

Property lifecycle professional figures

FM: steps, organization, models and main processes.

Property Life Cycle investor step 1 owner Asset management Property management Designers, Architects, Engineers tenant End user Building/construction enterprises Facility management.

Each phase of the property life cycle must be managed by a specific figure:

Asset management

I. Asset Management investor, first emerging activity, this phase consists in doing a feasibility study:

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• Market analysis, analysis of the demand and the supply trend, property investments and return of investments.
• Investment strategies considering the main goal of investment and risks that the shareholders want to have.
• Analysis and management of property investment risks: investment, construction risk.
• Investment planning and control: timing and cash flows.
• Management of property development operations: planning and analysis of cost, contractual and control activities.
• Portfolio strategies.

Through the feasibility study, which is done before the investment, it’s possible to understand the situation of the market, its trends and risk.

Property management

II. Property Management owner, adaptation phase, it has the aim to maximize and improve the value of properties, it consists of:

• Property management services.
• Property valorization processes.
• Devoted information systems.
• Valuation of properties.

It must have a strong and good link with Tenant.

It looks for all the activities that could enhance property’s value, such as the technical interventions are considered only if they end up increasing the market value of the property: the rent of the tenant.

So, the approach of property manager is both economical and technical, because a technical intervention or innovation could increase the economic value.

Facility management services

III. Facility Management Services users, composed by all the services devoted to the operation phase. Its aim is to manage the building and all the integrated services.

• Services devoted to: business + buildings itself + users.
• Suppliers’ contracts.
• Service level indicators: KPI.
• Organizational models and professional skills.
• Information technology system and reporting.

Owner vs user

There’s a link between these two, if the owner wants to get money from the tenant he needs to understand the needed of the future user.

Owner:

• Building = income.

User’s need:

• Efficiency.
• Comfort.
• Functionally.
• Safety + Security.

The EN15221 standards define the European facility management market, it defines the basic terms related and the scope of FM:

• Space & Infrastructure.
• People & Organization.

Outsourcing: new approach for enterprises

• During the last decades it has been registered a decrease in property ownership, less and less companies own a building.

Corporate and property ownership

• A lot of companies are more and more oriented towards the lease of properties instead of owning them.
• Companies are more and more tenants in the buildings where they work.

The rate of property ownership has decreased significantly since the second half of the 1990s. In the USA, the use of old Europe is now doing what the US has been doing for the last 50 years. Property has always been very limited.

Why company decide to outsource?

For enterprises a new context.

In the last 20 years companies felt the need to rationalize the use of capital during time, this was possible through: nowadays owning a building asks a lot of money, that can't be use for the core business. So people started being tenants instead of owners.

• Outsourcing services.
• Outsourcing goods.
• Real Estate finance.

This new approach allows companies to have exactly what they need without wasting money. The organization can be changed year by year according to the market. Since these changes are so fast, usually the building can't follow this activity. Flexibility is a good solution.

An example it’s the fact that currently companies instead of own pc, printers, mobile phone for employees; prefer to rent them so, they can have flexible costs.

Fonte: A. Ciaramella, Corporate real estate, Franco Angeli, Milano, 2016.

For companies. Andrea Ciaramella 8

Companies’ goal: outsource what doesn’t belong to their core business, in such that way they could stay focus on their core business and enhance their financial performance.

Rationalize the use of capital over time

Rationalize the use of capital over time Outsourcing of goods: Outsourcing of Real estate finance services:

• Fleet.
• ICT.
• Buildings.
• Organizations.
• Reprographics.
• People (.).

Process n1: real estate properties become financial products. The number of companies who concentrate their core business in investing money in the real estate world. The Real estate world is divided into investors and end users. The ROI is the rent paid by the end user to the owner, so the end user is very important.

All the services not related to the core business of the company but related to the operations and to the real estate part of the company can be outsourced from specific providers. Outsourcing is one way in which companies can get the services they need.

These goods were bought by companies in the past, now they became services: companies don't buy goods but buy services (paying rent). Their business is not in producing machines but renting and selling the service (assistance). Outsourcing: buying goods and services from outside of my company.

Enhance financial performance Enhance financial performance.

Main reasons to outsource

1. Concentration on core business higher efficiency: don’t have to waste time and resources manage and do things for which you don’t have the know-how.
2. Quality of services services are carried out by experience and skilled people.
3. Synergies between internal staff and FM suppliers (external) there’s a mixing of competences.
4. Certainties in spending in compliance with contractual agreements.
5. Efficiency specialists in FM are more efficient because they are specialized, they know how to deliver that kind of work, and at the same time there are penalties for inefficient work.
6. Flexibility having variable costs instead of fixed could be a pro in a lot of cases.
7. Transfer of responsibility companies pay an external provider and so, the responsibility about safety of quality is on their side.

Synergies, certainty about expenses, efficiency and flexibility allow a company to obtain a cost reduction.

NB: saving money isn’t the main goal of companies, which are interested in spending money in the most efficient way, which doesn’t necessarily imply spending less.

Total Facility Management (or integrated services)

Large FM companies’ providers can offer a total FM service, by combining the provision of both soft and hard services.

TFM consists in entrusting the entire responsibility of FM services to a single provider, which can manage the building from development of the property strategy to the management of the operation phase.

The world of suppliers

So, all FM services are outsourced to one single external provider and inside the client company there will be an internal supervisor, the manager of the client company.

In the world of service: we execute, run the service and manage REC 42.

The TFM is just one possible approach, it’s used the most by large corporations they look for a global provider to buy the management of services.

Total Facility Management ok for provider the Multinational companies prefer to use TFM and at the same time the TFM providers are usually big companies.

T.F.M. and processes, integrated services (vertical chain) here we have PM of services, not medium sized enterprises usually need.

Technical plants Energy management Food and beverage mgmt workers Different suppliers for the management Workplace mgmt of the single services.

Services for the reception Document management Building management systems Specialized services integrated family by family Small sized enterprises.

Source: Tronconi O., La gestione di edifici e patrimoni immobiliari, Il sole 24Ore, Milano, 2007.

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IBM example: company that started using this kind of approach.

TFM model/contract

TFM model/contract should have three fundamental features:

1. Only one supplier in that way the supplier can have a global view of the services and can also exploit all the possible synergies.
2. WW partnership common targets between client and suppliers and transparency.
3. Long-term relationship In order to define improvement plans.

How to design FM services = process of FM

1. Understanding the need of the client.
2. Analysis.
3. Planning.
4. Acting.

1. Which are the spaces and services that we need to manage?

What is the core business of the clients?

What is the budget?

At first it’s important to define SLA, KPIs and technical definitions.

SLA: Service Level Agreement, is the quality level set according to the client’s need. It can be expressed in term of:

• Cost.
• Time.
• Frequencies.
• Tools technical specifications.

Need analysis

It’s one of the most important steps that occur in the FM process. In order to build a good quality and efficient partnership between supplier and client company some preconditions are required:

Needs analysis the red one is the most important phase.

• The demand must be clear: the client has to know exactly its needs (services, budget, organization situation) and must report them, in a clear way, to the potential supplier.
• The client must be able to do a market analysis to select the FM supplier that is able to give to the company the best tailored service. The most relevant costs occurred during the initial phase.

It has an impact on costs.

Need analysis’ goal: get a picture of the real needs in term of services.

To do: check areas within the buildings, check plants, define all the services addressed to the different users.

Tools: check list which could take time and money this could take a lot of time, this is why is very important to collect information from the client.

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Data collection

• Get a general knowledge about the building/properties.
• Collection of data useful for the investments.
• Collection of data useful for the management of properties.
• Set-up a dynamic database.

Due diligence check regulatory compliance.

Audit analysis of the buildings and of the organization.

Variables that could influence data collection:

• Size and location of properties.
• Detail of the information collected.
• Time, in which we have to do data collection.

Then we have to plan data collection:

• Organization of the teams, understanding which competences are needed (technical data: engineers; organizational data: ordinary worker).
• Definition of roles, function and level of responsibility.
• Definition of the necessary tools, on the basis of the activity These can be tools and / or systems traditional for the architectural survey; the level required by the architectural survey influences the type of tools.

Analysis

2.1 Data collection is accomplished through interviews with ad hoc responsible for the client’s organization.

2.2 Data processing and definition of problems and critical points of the organization.

2.3 Design of possible solutions through a feasibility study, whose aim is the improvement of the RE management, it’s base on two priorities:

• Ease in implementing the proposed changes.
• Economic importance of the results obtained.

Areas of the analysis

• Use of the building.
• Size.
• Location.
• Technology adopted for constructions or plants.
• Maintenance.
• Compliance with law.
• Document and administrative papers.
• Incomes.
• Urbanistic constraints.
• Environment.

23 September 2020

Organization models and main processes

Organization chart: divisional.

Facility management: something which is linking process of the company, spaces and people multidisciplinary approach, in which it’s necessary to consider different aspects and face with different problem.

Companies have different organization models, so the facility management need to have a devoted function within the organization structure.

Two point of reference: client + provider.

Functional chart: there are different figures, that represent different functions within the project.

Specific product -> specific devoted function.

Organization chart: divisional.

The product X has three devoted functions.

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The project manager could be supported by different specialists that are focused on different specific functions.

The Facility Management?

When you have to manage facility management it’s necessary to make 3 important things:

• Purchase services.
• Manage and control services.
• Execute – operate services.

There isn’t a devoted function.

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In FM it’s always necessary to do these three things.

There isn’t an internal dev