Michael Mainelli, The Z/Yen Group
[A version of this article originally appeared as "Facilities Management Should Clasp the ASP to its Breast", Opinion, The Facilities Business, issue 8, Volume 2 (September 2001) page 12 .]
Like adders and asps, facilities management (FM) people often speak with forked tongues. Out of one side of their mouth FM people tell of the immense advantages of single-source supply of multiple services. Out of the other side of their mouth FM people talk of the immense gains from buying 'best of breed', while they 'manage' the process. Yet clients seek increasing returns to scale, not additive ones. Are facilities managers snake oil salesmen, or is there some justification for these two apparently divergent roles? Perhaps FM people are just confused about how to add value.
Clients, internal or external, are most concerned about what's happening to them in their industries. A myriad of issues affect global businesses - globalisation itself, decreasing customer loyalty, increased competition, plunging margins, industry consolidations and new technologies. In some ways, these issues are common across a surprising range of industries - oil & gas, telecommunications, professional services, publishing, manufacturing or transportation. The client outlook is eat or be eaten, in short a healthy, paranoid terror. If these 'new' issues were not enough, there are the 'running issues' of improved response, improved service, increased flexibility and the ever-pursued cost reduction. More and more clients seek a radical step change in either service or cost.
Into all this paranoia blunders the FM manager talking to his or her client about a 2% to 4% cost reduction, a small capital works budget, a few soothing reassurances about better service and a whinge about needing to be involved in the business strategy. FM mantras about buying in the best, but then managing it, sound like unnecessary overhead in today's lean times. With the match of innocence close to the powderkeg of client wrath, the only surprise is that more FM managers are not dismissed on-the-spot by over-stressed clients. If FM cannot measure the value it adds, it's not adding value. If the client's FM provider is not part of the team delivering radical step changes in performance improvement, then FM is part of the problem.
Adding to this list of problems are rapid changes in technology. For many people in FM, the 'e-revolution' is interesting, but not relevant to them. It is difficult to see how services would be purchased through the internet. How wrong they are! For a start, around half of all corporate expenditure is on staff, permanent or temporary. 50% of potential e-procurement is already underway with recruitment and temporary staffing sites, one of the most mature areas of the web. Other services - booking taxis, buying airplane flights, hiring automobiles, managing fleets, tracking logistics, commissioning reprographics or ordering stationery - are examples of services with well-developed web offerings. New services are emerging - utility purchasing, maintenance and works, emergency repairs, mechanical and electrical servicing. Applications Service Providers (APSs) already provide many of these services free or at cost to thousands of organisations globally. The blundering FM manager is losing his or her client to direct web services, and doesn't even notice it.
Most companies have introduced a snake in the FM grass, whether they know it or not, by promoting the use of intranets and the internet. The ultimate FM customer, the individual at a desk with a telephone and a personal computer connected to the networks, has unprecedented access to outside services. They can see for themselves all the offerings available. Competition for internal FM providers is death by a thousand cuts - reprographics using external image libraries, managers hiring cars online, emergency stationery that's cheaper than normal, even outside catering.
One way of analysing the competition for FM is to look at Professor Shiv Mathur's work at City University. Shiv maps generic competitive strategies by concentrating on the interface between an organisation's offerings and its customers (Shiv, S. Mathur, "How Firms Compete: A New Classification of Generic Strategies", The Journal of General Management, Vol. 14, No. 1, pp 30-57, 1988). In the following diagram the desirable "sweet" spot is the top right, being an integral systems provider. Internal FM services typically begin here, lots of Service with a bit of Product, well into the System quadrant. As part of the business, the internal FM supplier works hard to polish up his or her buildings and their workings. Some external suppliers compete by offering specialist Services - catering, cleaning, security. Other external suppliers compete by offering specialist Products - building management systems, security systems or power equipment. As competition intensifies, Services and Products are bought as cheaply as possible. At some point, the organisation decides that FM is not "core" and outsources it. The tide pushes FM down right into the Commodity box. The only effective way to compete in this world is to swim against the tide flowing from System to Commodity. Innovation is needed to swim against the tide successfully.
Intranets can help FM move to the System quadrant, if FM can change its perspective from "managing facilities" to being Application Service Providers. To date, most intranet FM sites are simple Showcases (here's what we do) or Yellow Page directories (here's what we don't do, so call someone else). A few have begun automating some services such as room bookings, visitor bookings or travel arrangements. None have actually started binding in their customers by being full Application Service Providers (ASPs). ASPs already terrify the existing order of software, data and service providers. People are buying services such as time-recording, website tracking or fleet scheduling online. More advanced services are on offer too, analytical tools, design, document exchanges and repositories (several in construction alone), and financial processing.
The only way to gain the System position is to compete on the intranet. FM managers need to gain control of the technology and then innovate, innovate, innovate. FM managers need to compete to become the "home page of choice" for their customers on the intranet. Some ideas that might help them achieve this objective include:
- publishing on-line, up-to-date schedules of repairs and planned repairs so users can see for themselves that the light in the lavatory is going to be fixed;
- showing plans for building improvements and moves, including schedules of forthcoming free space;
- scheduling online complaints sessions to prepare for supplier meetings;
- using two suppliers for competitive areas rather than one, such as taxis. Suppliers are rated by users. Users are given a choice while the suppliers are fed information on their performance;
- assembling useful information for travellers - given a taxi booking use an internet mapping facility to email back the booking confirmation with a local map. For travellers to another office (captured in the online booking portal), send them office maps, local emergency numbers and pre-register them at the remote reception to make them feel wanted;
- reviewing every imagery project for reusable material and post on the extranet - a corporate corbis.com or gettyimages;
- displaying print schedules and print runs in reprographics to warn fulfillment. Identify large quantities and help ensure people who may wish to add to orders have a chance - imagine avoiding an unplanned second print for your annual report;
- using space and booking information to develop an ASP SPA ("where does a snake try the waters?") which helps internal users find locations for outside events, away days, corporate entertainment or restaurants which suit your business;
- measuring satisfaction often, regularly and randomly. Don't rely on complaints or email - try quick response questionnaires for heavy users, for non-users; rate the supplier(s); run competitions for the best suggestion;
- providing statistics and usage on things you never imagined people would care about - how many incoming/outgoing telephone calls they've had (possible indicator of external connectivity); how many meeting booked/unbooked; visitors received at reception; temporary staff employed per period; taxis used; repairs ordered/fulfilled; etc. Provide bookings and statistics centrally, by department, by person. Make internal comparisons easy.
Even where an ASP is unfeasible, this mode of thinking often provides insights which develop new services. While developing an online ASP service for guest arrivals, one FM client tried tracking through-time from guests arriving at reception to guests meeting their intended contact. When FM began, their guests (people to whom their internal staff wanted to sell or with whom they wished to negotiate) had a terrible impression of corporate lethargy and arrogance. In the early stages measurement caused its own problems - security interfered; reception refrained from signing in guests until the intended contact was almost there; reception complained about persistently late hosts or absent hosts arranging meetings; some guests asked for the wrong host. Each obstacle was dealt with - security was retrained to see its objective as helping wanted guests find their correct host; security helped record actual arrival times; publishing "tardy" host lists and some discreet conversations with secretaries improved hosting; better booking and information packs helped guest connect with the correct hosts. Fully automated tracking turned out to be unfeasible, but many, many problems were cleared up along the way.
There is an old joke where Noah is sending two snakes out from the ark, entreating them to follow God's command to "go forth and multiply". The snakes say "we can't multiply - we're adders". Too often, this is the response we receive from FM managers. We can't add value because … we don't have control of IT; our users don't want choice and selection; it's all too difficult; what if we get this wrong. We can't add value because … we're FM. It is the job of FM to add value. We can add value if we think of innovating to become part of our customers' System. We can add value through ASPs.
Z/Yen Limited is a risk/reward management firm working to improve business performance through better decisions. Z/Yen undertakes strategy, finance, systems, marketing and organisational projects in a wide variety of fields (www.zyen.com), such as recent projects developing a stochastic risk/reward prediction engine and benchmarking of transaction costs across 25 European investment banks. Michael's humorous risk/reward management novel, "Clean Business Cuisine: Now and Z/Yen", written with Ian Harris, was published in 2000; it was a Sunday Times Book of the Week and even Accountancy Age described it as "surprisingly funny considering it is written by a couple of accountants".