Service efficiency - Key driver for profitability improvement

Transcription

1 Service efficiency - Key driver for profitability improvement Matti Malmberg, Building Services Northern Europe and Service Efficiency Capital Markets Day in Frankfurt November 19, 2013

2 Contents o Building systems in o Arrow heads in service: ServiFlex, Facilities Management, Control Room o Improving profitability o Improving cash flow o Summary

3 Building Systems Services in We create and maintain desired conditions inside properties. We aim to be the leading and the most efficient building service provider in Europe. Deliveries for the entire life cycle of the buildings Service and maintenance Facility management Building systems services and all technical building system installations All technical disciplines Heating, ventilation, piping, cooling, electrification, security, automation and fire fighting systems, among others Additional customer value through Energy-saving services Preventive maintenance Remote control and demand based services Service concepts based on customer needs Facility management Plan preventive maintenance and annual repair budget responsibilities ServiFlex Ad hoc services - hourly 3

4 s service business in numbers Over 30,000 contract based sites served 250 branch offices 13 operating countries 750,000 sales invoices sent per year 3,500 sales invoices sent per day 3,000 mobile devices in use, with the number increasing constantly One million Total number of service orders per year 100 ServiFlex offering contains more than 100 different building services in more than 20 technical disciplines. 4

5 What is Service Efficiency? Key elements Common processes and tools in use in all operating countries: work management, planning & scheduling, mobile solutions Efficient metrics in place: personnel-level follow-up in throughput times, work duration and quality, additional sales results, customer satisfaction Personnel rewarded based on their individual / team level performance in selected performance indicators Work done at the first customer visit within target time and costs 5

6 Arrow heads in service: ServiFlex, Facilities Management and Control Room

7 All About Service: ServiFlex ServiFlex is a scalable, multidiscipline agreement that helps customers bundle the required building services into one agreement. offers more than 100 different building services in more than 20 technical disciplines. The customer gets A single point of contact for all technical issues Prevention of damage and operational disturbances. Difficulties with technical installations are noticed before severe damage occurs. Better sense of well-being and increased productivity with an optimized indoor climate Help to predict operational costs Documentation that meets the requirements of authorities Prolonged operations and increased value of the building s perspective: ServiFlex is easy to sell and manage Co-operation between disciplines: combines all areas of expertise Pre-designed service descriptions and work instructions Ready-made tender calculation tools All items included in one contract Existing contract customers Increasing the fixed part by including new services into fixed contract Significant potential for additional repair sales 7

8 Strong focus in Facility Management Facility Management (FM) at is an integrated offering of all required facility services for both property users and owners. Better opportunities for wider service agreements and increased revenue Wider scope of services and larger contracts Wider geographical scope of agreements Attractive for customers operating nationwide Contract size: from EUR 1 million to EUR 10 million - also significantly larger contracts exist Typical contract period: 2-3 years, with expansion option. Average total contract life-time > 5 years Higher customer value compared to traditional technical maintenance agreements is responsible for the whole service scope Utilization of energy-saving services and remote monitoring Competition in wide FM agreements is lower than in smaller local technical maintenance agreements. 8

9 Control room services Additional value for customers 24/7 alarm monitoring and processing HVAC process inspections Energy management Additional value for Creates bond between and customer (i.e. FM customers) Key in energy efficiency services - providing data for follow-up, analyses, improvement proposals and adjustments Additional work generation - additional works can be generated based on condition data, not only customer contacts Additional value for customers Elimination of unnecessary energy consumption - savings in energy costs Property value retained better: continuous condition review and preventive maintenance Professional 24/7 property monitoring & support 9

10 Improving profitability

11 The goal is to increase the share of long-term contracts ServiFlex concept offers more than 100 specific building services in more than 20 technical disciplines Same structure and same terms for services in all disciplines in all our countries of operation Control room and energy efficiency concepts Approximately 10,000 buildings under 24/7 remote monitoring in all operating countries On-line monitoring tools create basis for energy improvement proposals and additional sales Technical FM concept Taking care of customers properties with guaranteed price level FM is integrated offering of all required facility services for both property users and owners 11

12 Service concepts vs. length of life cycle Property value Modernization Fixed contracts: FM, plan preventive maintenance (Ppm) and Serviflex FM The scope of works packaged to fixed price agreement 30,000 buildings under agreement based maintenance Zero level development Investment Ppm + annual repair budget ServiFlex Ad hoc service Ad-hoc services Often sold as add-on services to contract based customers, but also sold separately based on hourly rate Life cycle model: Incorporating services into project deliveries ServiFlex Ad hoc Project Project Modernization Modernization years Time After designing and delivering the total building systems project we can service the building throughout its entire life cycle 5-10 years 12

13 Focus on contract customers: the business mix Tendered Sold Contract customers Frame agreements, one-time customers Additional sales for contract customers 13

14 Actions to increase profitability #1 Higher service margin #2 Lower cost structure #3 Improving the topline Higher prices through selectiveness in sales: focus on correct business mix, no lowprofitable customers Higher sales prices due the value added services (energy, control room) Invoicing practices: develop contract terms and invoicing instructions, consumables, start-up fees etc. Special focus in low-performing units: close, merge or restructure Special focus on utility rate and costs Increase technician efficiency though better work planning and scheduling Efficient field services: increase the mobile device coverage among technicians Streamlined back office processes, covering purchase invoice handling, material process and sales invoices Profitability from new and innovative customer offerings: ServiFlex, FM and Control Room Additional sales though fixed contracts Connecting the customers with Control Room: possibility to find potential repair works form customer sites Energy saving and modernization projects 14

15 Improving cash flow

16 Releasing working capital Lean approach in service process Clearly defined roles, task descriptions and common process for service Efficient tools supporting lean thinking own workload always visible Defined metrics to follow process phases and people Throughput times in sub processes Work queues number of service orders in each sub process Financial follow-up: value of service orders in each sub process Objective: minimize the WIP in the process with faster throughput time 16

17 Actions to reach negative working capital Faster back-office process in sales invoices Provide easy view to back office personnel to see their own to do list (Mobile Dashboard) - create stable and constant invoicing flow Increase the level of automation in sales invoices handling - difference in service orders Continuous reporting and follow-up on a individual level High-quality & online reporting in field services Used materials and working hours reported after each service task completed Support with efficient mobile solutions for technicians Mobile attitude Develop sales concepts to support fast invoicing Develop sales concepts to support fast invoicing Turn the industry thinking from cost+fee to price lists and ready-priced service packages Business mix focus on shorter payment time and easier invoicing process 17

18 Summary

19 Short-term actions for profitability and working capital improvement Developing new service arrow heads Reaching the full potential in ServiFlex sales Stronger focus on Facilities Management Creating additional value for customers though control room services and energy efficiency Increasing profitability Higher project margin: selectiveness, value added services, efficient invoicing Lower cost structure: restructuring, high utility rate Improving the top line: additional sales, new concepts Reaching negative working capital Faster back-office process in sales invoices High-quality & online reporting in field services Develop sales concepts to support fast invoicing 19

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