The Challenges of Cross-Border Tendering

As an independent consultant (and previously both a client and a service provider) active in the FM sector for may years, I’ve been lucky enough to develop something of a niche position with regard to outsourcing and tender management. Much of my work has spanned EMEA as well as tending to be at the larger end of the scale, and as a consequence I’ve become a little sceptical when I listen to others suggesting what can and cant be achieved in these (admittedly complex) areas of practice.

With that in mind, I thought it might be useful to explore a few of the issues that tend to cause concern, and to offer some guidance that will serve to maximise the chances of success for anyone embarking on a cross-border tender exercise.

Communication Management

Effective communication is probably the most underestimated component of tender management, particularly with regard to projects that span a multitude of international borders. It’s therefore vitally important to establish an effective communications matrix at the outset, and to ensure that both central and local requirements are addressed. There are three primary areas that need to be considered:

Governance
In any client organisation, there will be a specific process for decision-making, and that will usually entail seeking periodic sign-off from a panel/board of senior managers. Identifying that group, and ensuring that there are clear lines of communication both individually and collectively, will save a lot of headaches as the project progresses through its various phases. Agreement as to the number and type of decision gateways and other process requirements also impacts on the programme, so this needs to be clearly established from the outset.

Local management
As one spans international borders, there can be issues (be they cultural or operational) that cause concern to local management teams and – if unaddressed – can have an adverse impact on the level of cooperation and “buy-in” achieved. I favour an approach where a specific point of contact is appointed in each country, with that contact then becoming the in-country representative for all things project related. Aside from demonstrating respect and concern for their views and perceived requirements, it also makes certain parts of the process (for example, data collection and site visits) far more manageable than they would otherwise be.

Socialisation
Any large-scale project will inevitably impact stakeholders and managers who are not directly involved in the process itself. Whilst governance issues may have been addressed, it’s therefore also important to understand the nature and extent of the wider stakeholder group and to ensure that they’re aware of the nature, scale and objectives of the exercise. This applies not just at the outset, but also as key milestones are achieved and well before any new solution is due to be implemented.

Programme and Logistics

Allowing enough time for the integrity of the tender process to be maintained is fundamentally important. Whilst it’s always possible to “squeeze” certain process activities if absolutely necessary, lack of time will put pressure on both client and bidder teams and can result in errors being made, requirements being misinterpreted and excessive risk being costed into the bids. Key elements to consider are:

Data collection
This can be the most painful part of any tender process, and in my experience the quality, extent and accessibility of data is overestimated in almost every project. With a multi-geography tender each data set has to be replicated in every country, and whilst this is a difficult and time-consuming process it’s also one that is inevitable. Understanding when and for what purpose data is required means that some of the work can be deferred and carried out when the tender is underway; for example, there will be requirements for the business case, the tender pack, pricing analysis and mobilisation, so some of the data is actually needed in final form many months down the line. It also pays to be pragmatic about what’s actually available; the classic 80/20 rule can be applied here.

Scale and location of portfolio
This has a fundamental impact on the time that needs to be allowed for (in particular) familiarisation, site visits and pricing, and effectively means that the timing for the development of bid submissions needs to be longer than might be considered normal for a single-geography tender process. I’m generally quite happy to set aside a couple of months within the overall tender programme in order to allow solutions to be properly developed, and to give bidders an opportunity to remove as much risk as possible from their pricing methodology.

Recognition of key geographies
Whilst a portfolio might span any number of countries, it’s often the case that the bulk of space, expenditure and key/critical locations exist within a far smaller geography. Recognising this is important, because it can lead to a far more manageable approach in terms of site visits, pricing and mobilisation. It also allows for critical areas of risk to be addressed in a more effective way, and this alone tends to provide a level of comfort to senior stakeholders that can preclude unnecessary obstacles arising with regard to sign-off and approvals.

Supplier Selection

No room for dogma
Many clients I meet have a predetermined idea as to the type of delivery model they favour, i.e. either self delivered through a “prime contractor” or a more traditional managing agent approach utilising a third party supply chain; however, when I ask them why I rarely get an answer that justifies a dogmatic stance in this respect. I believe that it’s far more important to think in terms of the deliverables and the outputs than on the delivery model itself, because if service requirements are properly specified it should then follow that one can focus on best value without worrying unnecessarily about issues that shouldn’t impact objectives being achieved.

Encourage variety
It then follows that – at the initial RFI stage – one can include suppliers from both the FM and property sectors; suppliers with perceived specialism in either hard or soft services; and suppliers who tend to favour both self-delivery and a third party supply chain. The benefit of this is that, when bids are received, there should be a variety of solutions and models that each present a different option and a different approach to value engineering. Very often, the solution that seems to offer the best fit is not the one that might have been predetermined at the outset through a more blinkered approach to supply chain strategy.

General Approach

Aside from the key issues above, there are a number of more general points that, if taken into account, can make the process of cross-border tendering more manageable and more likely to deliver the required results.

Planning
Whilst much focus will be on the tender process itself, ensure that you allow enough time to properly address the initial business case and the activity required to support and develop it. This includes the data collection element, might incorporate the RFI and certainly requires early and effective communication/socialisation.

Engagement
Don’t be afraid to engage fully with the various bidding organisations; on the contrary, I believe such engagement should be encouraged and maximised as there’s no better way to understand an organisations culture, approach and values than to get o know its people. This can be in the form of bidder briefings, site visits, Q&A sessions etc.

Resources
Large-scale tenders are always resource-hungry, and cross-border projects tend to be even more so. Client side resources can rarely afford to devote as much time as necessary to the development and management of the process so it’s usually the case that external specialism is required in a consultative/advisory role. Whoever might be engaged in this capacity, they should demonstrate not only a bulletproof process but also the knowledge and experience necessary in order to manage the issues and obstacles that will always arise.

And that, of course, is where I come in…

FM Insider

I’m delighted to have been featured in the September issue of the Facilities Management Journal, having contributed the the regular FM Insider column in my usual inimitable style! Why not make a coffee, sit down for a minute or two and read it here?

Addressing BIFM’s International SIG

Large-scale outsourcing seems to strike fear into the hearts of both client organisations and fellow consultants alike. This can be for a number of reasons, many of which I’ll touch upon in a presentation to BIFM’s International Special Interest Group taking place in mid-September. The talk will focus on the challenges and pitfalls associated with cross-border tendering and – using case study evidence – will demonstrate the tremendous benefits that are achievable when a robust and professional approach is adopted.

The title of the Presentation is “Being European: Can FM Provide a Joined-Up Model” and although tickets for this event are now sold out I’d be happy to discuss the issues relating to such projects with anybody that has an interest in the subject. Certainly, if you’re on the client side and are thinking about a similar initiative, please don’t hesitate to get in touch using the form that you can find on the Contact page of this blog and I’d be delighted to talk through the issues with you.

Thinking time

Another project was successfully concluded last month, and as is often the case at such times it gave way to a degree of introspection. In fact, with two substantial pieces of work occurring back to back, this is the first time for some eighteen months or so that I’ve actually been able to stop and consider the high (and very occasional low) points, and the learning to come out of each.

Both projects presented what might appear to be logistical difficulties. The first was a total FM outsource encompassing nearly 100 sites and some 15 countries within Europe; the second – again, a total FM outsource – comprised some 2,200 sites, all in the UK but subject to a programme at least 30% shorter than would have been ideal. In each case, the client was initially uncertain as to whether the objectives that were set at the outset were realistic, but ultimately those objectives were exceeded by some margin. Despite the differences (and the two organisations were like chalk and cheese in every respect), successful delivery was based upon a few consistent principles.

Absolute understanding of the tender process, and particularly the critical path that remains constant from project to project

Appreciation of how that process needs to be adapted to suit the nature and scope of very different organisations, sectors, portfolios and indeed, cultures

The ability to convert client requirements into tangible service specifications, service levels and outputs; and to do this in a way which the supply chain is able to embrace

Experience of working both on client and supply sides, and utilisation of that experience to foster a relationship based on partnership and the proper balance of risk & reward

The knowledge that there’s no issue that will ever arise that can’t be managed, and the wherewithal to manage those issues when they do (inevitably) arise

However, another thing that was common to both both of these examples was the quality of the relationship between client and adviser, because when we really have the client’s trust, and when we’re really empowered to work as a member of the internal management team, the process becomes so much easier and so much more rewarding – for all parties.

In fact, the last eighteen months have probably been the most rewarding of my career, at no time more so than when the bid leader of a very impressive (but in this case unsuccessful) supply chain organisation told me that she’d never enjoyed participating in a tender process as much as the one that had just come to an end. Indeed, every project is to some extent about building relationships, and it’s the thing I love most about what I do.

Here’s to new challenges, then, and new relationships. And to another 18 months like the last.

No turning back the clock

Yet again, the sound of magazine landing on mat has resulted in me posting on this blog. In fact, this will be three posts within a week, which brings new meaning to “prolific” and reminds me of the days – many years ago – when I was quite well known (in the blogosphere’s anonymous way) for a personal blog that achieved a degree of notoriety. And no, I won’t tell you how to find it.

Anyway, FM World was the magazine in question, and the leader by Martin Read was the specific article that prompted a reaction. In a well-written piece, Martin bemoans the demise of the office of old; alive with the sound of hard-working salary slaves, and a thriving centre of social interaction. A place where we could all engage in a meeting of minds and a sharing of ideas, such that simply being alongside our colleagues would ensure that we achieved the very best that we could.

Martin’s view is that “technological trends are working against the priceless social cohesion that the office has traditionally provided”. He cites Instant Messaging, and the propensity for people to communicate electronically instead of face to face, for the disfunctional offices (my term, not Martin’s) that we find ourselves working in today, and concludes that “organisations should think really hard before committing to a future based upon flexible working”.

I can’t help feeling that Martin has missed the point here, because there’s no turning back the clock. Technology has revolutionised the way we work and will continue to do so; the issue is no longer whether it’s a good thing, but more how we can harness it in a positive way, rather than simply using it because it’s there. And if this means that we continue to rethink where property fits within the corporate environment and culture, so much the better, because the costs of commercial property are such that any increase in occupational efficiency can only be a good thing.

Now, I’m not for one moment suggesting that the days of the office are dead; on the contrary, a physical focal point for a corporate entity, and a hub for activity that requires interaction with others will always be required. But providing accommodation for all when many people can work more efficiently elsewhere is nonsensical. Indeed, the time and cost of traveling alone can mean that the traditional working day is inherently inefficient.

Where technology is implemented in the workplace, it has to be for the right reasons. In other words, we should be utilising technology because it makes us better at what we do, or at least more efficient in the way that we do it. And where technology is introduced, it has to go hand in hand with guidance and instruction on the manner in which it’s to be utilised. Indeed, it needs more than just instruction, because technology has brought about massive change in terms of organisational culture. To get it right, we need collaboration that involves not only an organisations leaders but also IT, HR and FM; all have a part to play in determining what a business needs; how those needs are going to be addressed; and how the resultant change needs to be managed.

Getting this right opens the door for effective flexible working. This might mean that people are no longer required to sit at a desk every day of every week, but if that’s the case it should be because a better alternative has been provided. And there are countless other types of efficiency that can also be realised, from video-conferencing instead of traveling the length and breadth of the country to removing the contraints of a corporate IT network whilst still enabling access to files and documents. In other words, escaping the physical constraints of the traditional working environment.

Perhaps we’re still learning what this means, and how we might best harness the power of technology without becoming it’s slave. However, the old days are gone, and I for one say “good riddance”. How can anyone not be excited about the future?

More good news on “professionalisation”

Some time ago, I wrote about the progress made within BIFM with regard to a meaningful qualifications framework. I now see that a further level (Level 7 – Certificate and Diploma in Facilities Management) is due to come onstream during 2012 along with a number of other new products as yet unknown.

BIFM state that these “have been approved by Ofqual and are regulated qualifications on the Qualifications and Credit Framework” and that they ” also form an integral pathway leading to a MSc in Applied Facilities Management which will be launched by Liverpool John Moores University (LJMU) School of the Built Environment in September 2012.” You can read more about them at the BIFM website and also by having a look at the course in detail over at LJMU.

I can’t stress enough what good news this is for the FM discipline. I’ve been banging the drum of qualification – and the professionalisation of FM that it will lead to – for years now. BIFM’s old framework that lead for some to BIFMQual clearly needed overhauling, and that’s just what the Institute has done. We now need to see plenty of take-up because, with the other higher/degree level opportunities around, it’s never been easier to bolster experience with learning. And we need to be able to demonstrate to those alongside whom we work that we really can add value; that FM isn’t just about sourcing the cheapest toilet paper.

When I graduated, it was as a mature student with a demanding job and two young children. It was difficult to juggle work, family and study but it was an incredibly rewarding experience and one that I can’t recommend highly enough. Go on… take the plunge!

Musings on a Saturday morning…

I just had my first Saturday morning cup of coffee (okay, I may have had a Marlborough Light with it too). On this particular Saturday I had the bonus not only of a quiet household as both kids and fiancé were still quietly tucked up in bed, but also of reading the FMX interview with David Emanuel. In fact, it was the magazine landing on the mat that woke me from my own slumber.

I’ve always liked David, partly because I think he’s a good guy with an engaging personality, but also because he’s not afraid to rock the boat, or to challenge the conventional wisdom. I’ve been called both a maverick and an iconoclast myself in the past, so I guess it’s not surprising that I respect those who have the courage to question those things that disturb them and to seek the truth where others might just fear to tread.

In fact, I thought that the interview was fairly low-key (damn you, David). It did raise one or two issues about which I found myself nodding in agreement, however, and it prompted me to seek out my quill and ink in order to summarise those thoughts here. (I should really do this more often, of course, but life just seems to get in the way!)

On Chartership – personally, I just about side with the “it’s a discipline, not a profession” camp but to be honest I haven’t lost too much sleep dwelling on whether or not Chartership is the right thing for Facilities Management. What I do think is that BIFM now needs to make known it’s intentions once and for all, and either progress the issue of Chartership to a conclusion or put the matter to bed.

On qualifications – for far too long, I’ve listened to the argument that qualifications are a waste of time, and that in FM its experience that counts; almost always, those arguments are put forward by those without qualifications and who are unwilling, unable or just unmotivated to achieve them. For me, it’s a no-brainer; the higher the percentage of FM practitioners that are qualified, the more seriously we’ll all be taken. And by that, I mean taken seriously by those who are genuinely responsible for strategic decision-making; yes, the Board, where FM’s don’t sit and likely never will. (Don’t get me started on that one.)

On communication – BIFM, RICS and FMA need to understand the notion that the whole is greater than the sum of its parts. All three organisations have a part to play in the future (and the future growth) of FM, and whilst it may be something of a pipedream to imagine them all working in harmony, and with common objectives, it’s a laudable pipedream. We need strong leadership from all three, but we also need forthright, honest and regular communication; many of us would say that this form of communication has been lacking in the past, and that’s simply not good enough.

On FM and property convergence – dear god, how long will we be talking about this before something positive happens as a consequence? I’ve been fortunate to work in an advisory capacity with some of the world’s largest corporates right down to SME’s, but one consistent theme is that there’s rarely enough concrete and accurate data on the property portfolio. Indeed, in every major outsource that I’ve managed getting consistent and reliable property portfolio data is always one of the hardest tasks. Yet without that, how are we in FM to identify opportunities; to provide the added value expected of us; or to properly define the services that will best serve the business? We need to be working hand in hand with our property cousins, and we need to be doing it now!

There… I’m now going to make myself another coffee (I’ve let the one I was drinking go cold) and carry on reading.

The European Conundrum

I see that yet more research on workplace changes has now been published, this time in the form of Johnson Controls’ Collaboration 2020 report. JCI based their findings upon the responses of some 1,700 people in 7 countries (respondents were from the US, UK, Germany, Australia, India, Canada and China) – not a bad number, and one that should be able to provide a pretty clear indication as to whether expectations are continuing to change as technology becomes increasingly available.

The findings indicate that team working, and the use of collaborative technologies, is on the rise (no surprise there, I guess). At the same time, the demand for traditional meeting spaces is likely to drop, with a decrease of 13% in respect of likely demand for such facilities in 2020 compared to today. Even the ubiquitous desk phone seems set for obsolescence in the not too distant future. Key findings of the survey included:

• Web conference – 19% reported high use currently, with 57% anticipating higher use in 2020
• Two-dimensional video conferencing – 18% to 51%
• Team spaces with incorporated collaborative technologies – 20% to 52%
• Dedicated collaboration room – 18% to 36%
• Instant messaging – 33% to 54%
• Traditional meeting room – 40% to 27%
• Desk phone – 50% to 33%
• Three-dimensional video conferencing – 44% of office workers anticipate high use in 2020.

This all seems like pretty conclusive stuff, but I was struck by one of the quotes from the report that was included within BIFM’s summary in FM World Daily:

“Failure to invest in collaborative technologies and updated workspaces will hamper productivity. This has an impact on people designing new workspaces or retrofitting existing ones today.”

To my mind, this highlights a deficiency of the report, in that it took its samples from a very limited geographic footprint; in particular, very little from mainland Europe and nothing at all from the central European belt or east thereof.

I’ve had a fair amount of experience in dealing with both FM outsourcing and office redesign/fit out across Europe, for some of the world’s largest corporates. What I’ve tended to find, though, are two things that hamper the harnessing of efficiencies through intelligent design and sensible utilisation of technology:

1) “Local” management operates with a large degree of autonomy, and is usually adamant that it will “re-engineer” central process and approach to suit.
2) Central REFM functions are unable to insist on a common approach and methodology across geographic boundaries, as to a large extent their role is advisory (less so in terms of acquisition/disposal, admittedly, but certainly in terms of the issues under discussion).

The inevitable consequence is that objectives get diluted, and that – particularly in central and eastern Europe where views tend to be a little more traditional than here in the UK – opportunities to embrace new ways of working are lost. What starts out as an admirable intention to drive the organisation into a new age becomes a whole lot less than that.

I’d be interested to hear the experience of others who have worked across Europe, and have encountered similar difficulties. It’s an interesting and challenging issue, but until the large multi-nationals determine to address it I suspect the consequences are inevitable.

A quick update to the Twitter debate…

Yes, I’ve done it – I’ve taken the plunge and joined the flock. You can find me here!

An Institute Coming of Age?

Some time ago, my involvement with BIFM was far greater that it’s been of late. I spent a couple of interesting years as the corporate representative on Council; was actively involved in the Knowledge and International SIG committees, and well as the Corporate sub-committee; and regularly attended events and conferences in order both to enhance my learning and to network with my peers.

More recently, I’ve been less involved than I would have liked, but my desire to do anything more that watch from the sidelines was to some extent limited by what I felt was a tendency towards bureaucracy, and a structure & public face that seemed far to entrenched in tradition. That now seems to have changed, and I for one am delighted to see it happen.

I can cite two immediate examples of this (although, bearing in mind that this is a blog, I’d be delighted to hear your views on the subject too). Firstly, the qualification framework – whilst still in relative infancy – is clearly much more fit for purpose that it’s predecessor, the BIFM Qual; the latter was to my mind singularly unsuccessful, with limited take-up and suffering from the constraints of being non-accredited. The second example is the introduction of the “Certified” status of CBIFM for individual members. For too long, I believe that members have felt that the focus on corporates has been to the detriment of the individual; however, CBIFM now means that members with tangible knowledge and experience can make themselves known. (As an early adopter and beneficiary of those post-nominals, I would say that, of course!)

Recently, I accepted an invitation to represent the Institute as one of a small number of EuroFM Ambassadors, a role I was delighted to take on in the light of my changing perception of BIFM. I’m looking forward to what will be a more direct involvement than I’ve had for quite a while, and am happy to give of my time for an organisation that seems to be heading in the right direction.