The Exit of Benchmarking Cost. FM Target is Quality and Cost
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- Bridget Douglas
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1 The Exit of Benchmarking Cost FM Target is Quality and Cost Remko Oosterwijk, Cluster FM of Capgemini Consulting Oslo, 25 th October 2007 Program Introduction Benchmarking in practice History of benchmarking in the Netherlands and Europe Methodology of Measuring Quality Facility Activities (MKFA) The CEN project Benchmark results Conclusion Questions
2 FM consulting: FM & RE strategy, cost reductions, consolidation and more. Together with clients we..used cost/quality ratio s to define cost reduction possibilities looked into the consolidation strategy in Europe reduced 20% of FM costs by outsourcing parts of their FM organization based on our Business Case Areas of cost reduction in merging FM 1. Per site New fault reporting system Reduce number of suppliers Consolidate contracts and buildings Standardize contracts and service levels Focus on improvements in high cost processes Central strategy on RE & FM 2. Horizontal integration Joint RfP internationally Work internationally together 3. Vertical integration Outsourcing of operational personnel Outsourcing of services, either bundled or completely Reduce total FTE-time currently spent on processes by more efficient co-ordination from external supplier and have proven expertise in We have proven experience in: Facility management solutions in M&A projects Building Business Cases on outsourcing (national and internationally) Defining Strategy on Outsourcing (national and internationally) (Internationally) Defining Real Estate Strategy Defining Facility Management Strategy Standardization of facility management processes (national and internationally) Setting up chain of offices including RE, FM, ICT services in 20 countries Benchmarking cost and quality (national and internationally) Introducing workplace innovation concepts Knowledge of reducing usage of square meters Setting up Shared Service Centers Managing transformation projects Define, standardize and improve facility processes Defining Service level agreements Our expertise can help you in achieving your goals quickly
3 Why clients work with us? The FM & RE consultants have international standardization expertise. Our FM team consists of specialists on international benchmarking, Real Estate and Facility Management Chairman CEN/TC 348. The European Committee in Standardization in FM Chairman NEN Dutch Committee in Standardization in FM Founder of benchmarks Facility Management according to the NEN 2748 Founder of the NFC (Netherlands Index Facility Costs) Founder of the benchmark Quality and Costs Project manager and team benchmark Quality and Costs according to the scientific Method MKFA Dutch representative in the European working group Quality CEN/TC 348 Project leader international FM benchmark Since 1996 we yearly benchmark cost of 160 facility organizations based on the NEN 2748 One of our consultants is Dutch representative in the European working group on FM Quality In 2007 we have performed an international benchmark on FM cost and quality in eight European countries with 35 sites in scope We help clients with our benchmark experience in cost reduction projects Short History of Benchmarking in the Netherlands and Europe Initiatives Standard realized in 2001 NEN 2748 ( building offices) Standard for Health care and Education a few years later European Benchmark initiative in Establishing NFC Index 2005 ( workplace cost ) But: First things First
4 Benchmarking: horses Some results of recent benchmarks (NL) Cost of a workplace Energy (water, gas and electricity) / m2 bvo 10 Cleaning / m2 16 Facility Management between 5% and 10 % of total cost of FM Trendwatch: discussion about insourcing cleaning, security and documentmanagement.
5 Agenda MKFA What? Why? How? What offers the MKFA? MKFA is the abbrevation of: Meetmethodiek Kwaliteit van Facilitaire Activiteiten = Methodology to measure quality of facility processes and service levels The MKFA measures quality objectively on the base of the NEN 2748 The MKFA is a web based tool: On the base of the framework per activity (input, throughput en output). According to the NEN 2748 Measures objectively (quality related to product and organisation) Express quality in percentages The MKFA project took 4 years of research, testing and improvement.
6 Involved parties in setting up the MKFA: Facility Organizations, FM Science and FM consultancy Members: 30 Facility Organizations (profit and non-profit) FM science: Prof. Dries van Wagenberg, CFM Wageningen University Project Management: Capgemini Consulting Reason set-up MKFA: wish of 30 Facility Organizations Understanding of facility cost improved from the mid 90 s (mostly by benchmarking). View on Steering in Facility organizations has improved the last couple of years. Shift from steering on facility cost to steering on cost in relation to other steering dimensions. Organizations participating in benchmarking Facility Cost wished to have insight in cost drivers.
7 The most time consuming part of the project MKFA was to define quality according to the aim of the project A lot of point of views A lot of definitions A lot of perceptions A lot of ways to determine quality A lot of ways to measure quality Etc. Project team question: Which quality issues would you like to measure and why? Measuring quality is part of the steering tools of a Facility Organization Facility cost Supplier performance Client satisfaction Service Level per process Steering the Facility services Employee satisfaction Quality of processes Perception of end user
8 Systematics MKFA Facility theme X Input Throughput Output Effect (Process) Domains and sub domains (INK) Weighted questions The MKFA contains 10 domains/ 25 sub domains in MKFA according to the NEN Building Providing building, grounds and garages Insurance of the building Maintenance building and installations Transform building and installations Usage of energy and water Managing 2. Food and drink related services -Restaurant, -Service on the work places -Coffee, beverage and sweet machines -Catering 3. Risk management -Security -Prevention of calamities -Reception 4. Cleaning 5. Moving 6. Document management -Document creation -Postal services -Document Reproduction -Archives 7. Waste removal 8. Space and auxiliary items 9. Telecommunications 10. Facility Management -Facility Management -Purchase management -Service centre
9 The MKFA offers several sorts of facility steering information Insight in quality of input (staff and material) Insight in quality of processes Insight in service level Insight in cost compared to other organisations Insight in cost/quality comparisons and benchmarks The MKFA contains 75 KPI s for 25 processes on the base of 1200 questions and compares the KPI s with facility cost. The CEN initiative
10 Added value for Facility Management Improve competitiveness in global market Improve effectiveness of primary and Facility Management processes Improve transparency in procurement and contracting Quality improvement of output Supports certification Means of communication between stakeholders Development of new tools and systems Results (1) Standard: EN Facility Management Terms and definitions Content: FM Model, relevant terms, list of services (structure and description) Purpose: Improve communication between stakeholders Improve effectiveness of primary and Facility Management processes structures the service providers in their services helps clients to define their needs
11 EN Definition Facility Management Integration of processes within an organization to maintain and develop the agreed services which support and improve the effectiviness of its primaire activities FM Model evolution BUSINESS PROCESSES STRATEGIC FACILITIES PROCESSES - Space & Infrastructure - People & Organisation C O M P A N Y Corporate Business Units End users D E M A N D P L S A L N A s N I N G TACTICAL OPERATIONAL D E K L P I I V s E R I N G S U P P L Y Internal External P R O V I D E R S
12 Results (2) Standard EN Facility Management Guidance on how to prepare Facility Management agreements Scope: both public and private European Common Market cross-border, as well as domestic, client/facility management agreements or relationships, and the whole range of Facility Management services including planning, management, management and service, service and subcontract or operations. Results (3) Purpose: promote cross-border relationships and produce a clear interface improve the quality of Facility Management agreements give assistance in, and advice on, the drafting and negotiation and in specifying arrangements in the case of dispute; identify types and make recommendations for the attribution of rights and obligations between the parties of the agreement; simplify comparison;
13 CEN/TC 348 organisation CEN/TC 348 Facility Management Chairman: R.W. Oosterwijk (Capgemini) Secretariat: J.R. van der Zwan (NEN) WG 1 Terms and definitions Convenor: P. Stadlöder (GER) Secretariat: J.R. van der Zwan (NEN) WG 4 Taxonomy of Facility Management Convenor: M. Christen (CH) Secretariat: E. Huegentobler (SNV) WG 2 Facility Management agreements Convenor: S. Mitchell (UK) Secretariat: J.R. van der Zwan (NEN) WG 5 Processes in Facility Management Convenor: prof. K. Alexander (UK) Secretariat: C. Molloy (UK) WG 3 Quality in Facility Management Convenor: W. Moderegger (GER) Secretariat: E. Finck (DIN) WG 6 Space measurement in FM Convenor: prof. U. Elwert (GER) Secretariat: E. Finck (DIN) CEN - Facility Management - Views Financial view Accounting Costs WG 4 Taxonomy Supply Demand Provider view Processes KPI Product Client view Quality SLA WG 5 Processes Ressource view Facilities Activities WG 4+6 Taxonomy Space m. WG 3 Quality Draft to show how the four CEN WG s work together
14 FM Value Map Third version Stake holders: Society Customers Staff Owners Benchmarking Benchmarking Impacts: Economical Social Physical Surroundings Satisfaction Cost Productivity Reliability Adaptation Core Business Benchmarking Results: Space Services Know-how Relations Processes: Activities Innovation Communication Coordination Resources: Facilities Technology Manpower Management Facilities Management Benchmarking Facility Management National & International approach Capgemini Consulting Cluster Facility Management Nederland
15 Content 1. National approach MKFA Measuring cost & service levels Examples 2. International approach Scope KPI s Cost reductions? Examples of possible benchmarks from the MKFA
16 MKFA measures service levels Example: Consumptieve Consumption Dienstverlening services - employees Medewerkers & en resources middelen Example: Consumptieve Consumption Dienstverlening services - - Processes Processen Kwaliteitpercentage Capgemini Nederland 80 Schiphol Group Gemeente Amersfoort Gemeente Capelle a/d IJssel Gemeente Dordrecht 79 Gemeente Ede 87 Gemeente Enschede 67 Gemeente Leeuwarden 87 Gemeente Zwolle Ministerie BIZA Ministerie BUZA Ministerie V&W-SSO 62 Provincie Gelderland 87 Provincie Zuid-Holland Kwaliteitpercentage Capgemini Nederland 81 Schiphol Group 62 Gemeente Amersfoort 73 Gemeente Capelle a/d IJssel 86 Gemeente Dordrecht 59 Gemeente Ede 90 Gemeente Enschede 49 Gemeente Leeuwarden 88 Gemeente Zwolle 73 Ministerie BIZA 90 Ministerie BUZA Ministerie V&W-SSO Provincie Gelderland 83 Provincie Zuid-Holland MKFA combines facility costs & service levels Example: Cleaning, quality & costs / sqm Schoonmaak - Eindresultaten & kosten per m2 Bvo Ahrend 15,89 16,56 20,57 16,46 22,55 12,03 11,26 10,40 Ballast Nedam Capgemini Nederland 17,81 16,12 13,40 Gemeente Capelle a/d IJssel Gemeente Dordrec ht 22,16 22,22 17,27 16,77 Gemeente Ede Gemeente Enschede Gemeente Leeuwarden Gemeente Zwolle Horizon College Ministerie BIZA Ministerie BUZA Ministerie V&W-SSO Provincie Zuid-Holland Gemiddeld Kwaliteitpercentage 25,00 20,00 15,00 10,00 5,00 0,00
17 International approach Scope of our benchmarks in countries & Approx. 20 sites in scope Source: Capgemini Group locations summary *Including Edinburgh, Glasgow, Inverness, Swansea, Wynyard Park. Nairn input on Sqm and no of Users not yet available or included **Including Karlskrona, Sundsvall, Nässjö, Kalmar, Luleå and Växjö
18 Scope, FM services We defined property- and user related services Property related services 1. Grounds and landscaping 2. Building structure and fabric 3. Indoor climate and utilities 4. Energy 5. Switchboard User related services 6. Document Management 7. Internal movings 8. Stationary Supply 9. Reception 10. Meeting rooms & video conferencing rooms 11. Safety & security 12. Consumption services 13. Vending machines 14. Cleaning 15. Space planning and Management (incl. storage) 16. Mail handling 17. Other FM services on site Total cost for FM services are calculated Total Cost - Property Related Services 2006 Switchboard Energy Building Structure & Fabric Indoor Climate & Utilities Grounds & Landscaping Cost (Euro) Total Cost - User Related Services 2006 Reception Document Management Cleaning Safety & Security Other Services Mail Handling Meeting Rooms Stationary Supply Coffee Machines Internal Movings Space Planning Consumption Services Cost (Euro) A cost = Manaement, Purchasing/Demand Organisation B cost = Operating Cost - Internal C cost = Operating Cost - External Example: The total cost for FM services 2006 in Country A was 5.2 million Euro for sites in scope
19 Example: KPI s for Energy are calculated Cost / SQM KWh / SQM in Country A Cost/Sqm Country A Country B Country C Country D Country E kwh/sqm Office 1 Office 2 Office 3 Office 4 Average Service Level Service Level Energy Country A Country B Country C Country D Country E Notes Best practice Opportunities SWOT Cost reductions Example: KPI for Cleaning / sqm is calculated Cost/Sqm ( ) Total cleaning costs per sqm UFA, sqm not used excluded Average Service Level Country A Country B Country C Country D Country E Service Level Cleaning Country A Country B Country C Country D Country E Cost/Sqm ( ) Cost per SQM and Service Level Service Level Notes Best practice Opportunities SWOT Cost reductions Country C Country B Country E Country D Country A
20 In a workshops we have interactive discussions on possible cost reductions Possibilities for cost reduction and areas of improvement Consolidation of buildings? Standardisation of services? 1. Reduction of contracts 2. Reduction of invoices 3. Standardize service levels Costs reductions? 1. National reduction of costs per site, per country 2. Horizontal integration: international reduction of costs per service, for example by outsourcing services 3. Vertical integration: national & international reduction of costs by outsourcing FM How can we leverage on the use of technology? How do we create recognition within Capgemini that FM is a real profession? We are thinking about making meeting room management a self service function! We are planning to increase bundling of services! We would like to use outsourcing to free up management resources! How can we professionalize account management in FM? How do we improve environmental friendliness? Conclusion Benchmarking on cost is an added value for most of the FM Organizations End users are interested in quality of services and partly in cost Service providors are focussed on quality and cost International development is Quality and Cost European Standards challenges you into a new focus: Quality and Cost
21 Sponsors Headsponsors: Sponsors: Dutch Ministry of Transport and Public Works Questions?
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