Unit 5

1. Unit 5 Assessing the Performance of FM for the Future

2. Overview • Using the context of PA as the vehicle to consider how FM may develop into a more strategic dimension of business in the future • Focus on the PA usefulness and discusses the difficulties of designing and demonstrating useful FM

3. Learning Outcome • Clear view on what FM is, how it can be viewed as a discrete strategic function, and what needs to be planned, managed and assessed in order to confer usefulness on current and future FM • Appreciate the complexity of the mismatch between the KPIs preferred by the FM industry (i.e. facilities oriented aspect of FM) and those KPIs that the core business is interested in (i.e. business outcome oriented issues).

4. Introduction • Develop from a 1999 paper entitled “FM in the future – A Speculation on Key Performance Issues” by Dr. John Hinks

5. FM in the future? • Consider first the future use of the term “FM” • Will FM converge into a singularly definable activity? Or perhaps into a numbers of distinguishable clusters of activities • Secondly, the future of FM probably hinges upon the external perspectives of FM held by the business world • Thirdly, bearing in mind that the evolutionary history of FM is characterized by turbulence and adaptation, is it reasonable then to presume that the possible form of FM in the future will be recognizable viewed from today’s perspective? • The answer is probably yes because business will have to recognize FM in the future as emerging and growing from the FM of today • This in turn raises two clear dimensions of business need into the future

6. Dimensions of business need into the future • First dimension: Relates to the nature of continuous needs. • Mode and form of delivery may change but are likely to remain fundamentals to the operation of business. • Probably develop into the future (change over time incrementally) by means of the clustering of activities and the attainment of best practices • Here the success criteria for FM may relate to CIP, reliability, consistency, cost minimization, quality and time • But this scenario invites stagnation in the development of novel approaches

7. Dimensions of business need into the future (cont’d) • 2nd dimension: Relates possibly to developing business needs • Here the success criteria for FM are more likely to be associated with innovation. • Speed of delivery is the determinants of competitive advantages • A bespoke attunement of the FM service to the user’s needs would be more valuable. • This means the emphasis on FM is in the arena of business innovation. • Here the predominant features of good FM in the future may major on value, adaptability, novelty, support for new processes or timeliness.

8. Dimensions of business need into the future (cont’d) • 3rd dimension: Another dimension to distinguish the FM of the future is how it is used by business • E.g. consider the support service context of FM. • Business needs for support services require different priorities and hence different weightings of FM. • This approach may be an appropriate way forward for distinguishing FM in the future – noticeably less focused, less preoccupied with what it is – and more focused on how it is used by the business. This may lead to the performance assessment of FM in the future being based upon how useful FM is to the business

9. A concept of “useful” FM • Consider a business that is operating a stable process and in an unchanging state • Able to make most use of an operationally efficient and cost-minimized form of FM. • Facility usage and demands on other aspects of the business support services may be stable and align well with the operational and facility-oriented face of the FM industry • FM needs are predictable and stable • Little investment plan for the purposes of change • Reactive rather than proactive FM with little strategic input to the business • For this type of situation, the performance indicators may remain broadly the same as they are now

10. A concept of “useful” FM (cont’d) • Consider the same business undergoing a change in its core process • Here the adaptability of the core processes may be more critical to the future competitiveness of the business. • Provision for investment need to be plan • Proactive FM foresight and a strategic understanding of the inter-relationship between the business and FM is valuable to the business. • Any stagnation / unresponsiveness caused directly by the nature of FM provision could severely limit its usefulness to the business during the change / changed phase. • Such limitations may derive from the nature of the contractual arrangements for the provision of the service and/or the remoteness of the FM service from the core business

11. A Concept of “useful” FM (cont’d) • The measurement criteria and KPIs would differ for the same business and same FM organization in these two scenarios. • This may suggest the need for FM to be divided according to what its priority role is in the context it is being viewed in • It also suggests that a FM provision designed for one mode of service need may contain too many critical compromises to allow it to achieve the required performance profile in another mode. Evidently the value of the outcomes depend somehow on the balancing act required in the process

12. Modeling the key elements of useful facilities management • It would be impractical then to produce a strict set of performance assessment parameters for FM provision • The measurement of performance may be more appropriately considered in terms of the robustness or efficacy of the FM supply to meet the business demand • The usefulness of FM in this context is also likely to be assessed in terms of outcomes (not outputs) • This outcomes will be the result of complex and systematic inter-relationships between the FM and the changing business process. • Strong co-operation between the FM and the business will confer agility and adaptability on the business whilst preserving resilience and robustness of the core process • Hence the future of FM and the future of performance assessment of FM are inter-twined

13. Summary • This unit has speculated on the future of FM in the context of the future of business needs. • The focus of contemporary performance assessment separately from the business has neglected its interactive value. • A shift in the emphasis will have to occur in the foreseeable future towards the assessment of the usefulness of FM, using business-oriented criteria for the quality of the business support service • Using performance assessment techniques such as Balance Scorecard Approach, Management by Variance Approach etc. may help FM achieve the level of usefulness in the business processes and outcome.

14. Summary (cont’d) • In the increasingly global business market, the combined variability of political, economic, social and technological environments, and internal-to-business responses to these environments, mean that the usefulness of FM will depend upon its ability to adapt and achieve synergies in conjunction with the core business processes. A shift in the emphasis will have to occur in the foreseeable future towards the assessment of the usefulness of FM, using business-oriented criteria for the quality of the business support service

15. Summary (cont’d) • In these circumstances, the target business value of FM may reside in its usefulness when applied strategically for competitive business advantage. Hence the KPIs for FM of the future may have to be directed towards business outcomes, and could converge with core business performance indicators such as agility, flexibility, business continuity and/or transition management • For changing business, the nature of FM needs & priorities will also change • Where there are tensions over resources balancing, a flexible approach to interpreting the criticality and contribution of individual aspects of FM becomes necessary

16. Summary (cont’d) • Overall FM would probably be polarized into: • FacilitiesManagement: characterized by a predominantly operational service supply industry (probably also predominantly provided through outsourced specialists offering similar types of service and competing on cost or value) and • Facilities Management: characterized by an in-house strategic, consultancy-oriented, mediating form of management • Along with these polarization, the suites of KPIs required for publicly assessing each form of FM in the future, would be significantly different