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.

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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!

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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.

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Social Media – Yay or Nay?

Well, I’m back to the blog after something of a hiatus, and my intention is to post as regularly as possible from this point on. Yes, I know – everyone says that. But we all have demands on our time, be it work related or personal/family commitments, and this brings me nicely on to the point of my post.

There’s no question that social media has impacted almost every aspect of our lives; indeed, it’s hard to recall the time before Facebook when – if you had some news you wanted to share – you picked up the phone. Well, as an old hand at blogging but not exactly an early adopter so far as other forms of social media are concerned, I’m now seriously considering Twitter as a means of communication. More specifically, as a means of business communication.

The truth is that I can’t quite make up my mind… I haven’t yet determined where it’s benefits lie and to what extent tangible reward will follow the commitment of time and resource that I believe Twitter requires. What I do know is that many of my friends and colleagues in FM have embraced this particular platform wholeheartedly, so if you’re one of them I’d really like to hear your views. Of course, you need to bear in mind that if you tweet your response, I won’t know about it just yet…

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The Cost of Mistakes

It’s a while since I’ve posted on here (I’m nothing if not a master of understatement), not through any deliberate intent on my part but more as the consequence of being particularly busy over the last few months. Generally, I’ve been content to keep abreast of what’s going on within the industry and to discuss developments through the more “traditional” networking channels; occasionally, though, something hits my desk – or the screen of my Mac – which makes me sit up and take slightly more notice; or, indeed, put the figurative pen to paper. One such occasion arose when I read the i-FM report by Elliot Chase published on 23rd September and entitled “Recession drives procurement change”.

The subject was addressed at the latest BIFM Fellows’ Forum, hosted at Deloitte’s City of London HQ, and the main thrust as reported was that the recession has necessitated a shift in the approach to procurement . Attendees heard procurement specialists Martin Laws and Guy Palmer explain the results of both recent research and client experience, which confirmed (unsurprisingly) that cost control was a top priority, and that it would remain so in the foreseeable future. Then came the interesting bit (because, let’s face it, the issue around cost control is not exactly news), and I quote from the article itself…

Deloitte… is seeing a clear move towards increased interaction between buyers and suppliers in order to get the best results from a contract appointment. Increasingly tender decisions… are being made on the basis of cost, plus assessment of capability and fit… a maturing of the decision-making process in that it offers a better balance of previous approaches, specifically the technical-led and the procurement-led.

The pressures of recession… have resulted in more questions being asked, both internally and externally, as the procurement process develops. In many cases, this has had the benefit of working against short-termism, in which cost is the only real decision criterion – though there are still plenty of examples of that approach around, too.

Now, I posted an article on this blog about a year ago in which I expressed astonishment at the gulf that apparently existed between the property and FM sectors, and at the audacity of the former to tell the latter how to suck eggs. Once again, I’ve been left feeling similarly bewildered and bemused at how little understanding there seems to be in the wider world of the most basic of concepts that are the cornerstone of FM. This time, concepts relating to the procurement of FM services.

When I re-launched Edifice at the beginning of 2006, I reckoned that I had a reasonable pipeline based upon clear target clients and some quite decent market knowledge. However, the first company I went to see was one that had invited my previous employer to tender (for a hard services outsource); I’d led the bid but – although we’d been unsuccessful as a consequence of cost – I knew that the fit with the successful tenderer just wasn’t right, and that what had ultimately been procured was impossible to deliver within the accepted cost constraints. Sure enough, the new contract had proven to be a complete disaster and I proceeded to work with that client for over a year to provide a solution that met not just the budget constraints but also the organisation’s requirements in terms of culture, philosophy and customer focus.

To demonstrate this even further, the processes and systems that have been developed within Edifice to steer clients through the critical path of an outsourcing project effectively isolate cost as just one of a number of factors that should influence any sensible decision-making process. In other words, the question is “Right – given that cost comparison is going to be addressed as a discrete part of the evaluation process, what do you really feel about these suppliers? Can you work with the people you’ve seen, and have you actually seen the right people? Do their policies on sustainability, CSR and ethical procurement mirror yours? When they say they recognise the importance of training and development, do they put their money where their mouths are? Do they actually harness technology to demonstrably drive efficiency, or just spend money on systems that then has to be recovered from you, the client? And – critically – what do the clients say after working with them for x number of years? (The list could easily have gone on, but presumably the point has been made.)

Some of these questions are client-specific, but there are always a host of key areas that need to be addressed, and once done, the result is a framework within which “fit” can be accurately gauged. If the cost evaluation then suggests a similar solution, all well and good; if it doesn’t, then at least the client organisation will have the basis for rational and informed debate. In other words, if a decision is going to be made on cost, than understand the consequences of that decision before making it.

The procurement of facilities services can have a massive impact on an organisation’s performance, not just for the term of any contract let but for the additional time it takes to correct a mistake. And getting it wrong can also change the perception of a facilities team, or a procurement department, in the eyes of the end user (or, perhaps, the board). The danger, as I’ve been known to mention before, is in the “commoditising” of FM and it’s a danger that we must all be ever watchful against.

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Bullish Noises For Bullish Noises’ Sake

glass half fullI’ve written before about the “credit-crunch come recession” (have a read of Recession and the P-Word if you haven’t already done so). Whilst I know I’m not alone in doing so, I do sometimes wonder if I am alone in publicly acknowledging the effect that this economic downturn is having (or is likely to have) on our industry. The reason I say that as that (at least until this week) pretty much all I’ve seen in the media is a series of press releases from service providers talking up the market. Advising us that, actually, a global recession is uniquely good for the FM industry.

Strangely, this week seems to be one for telling it like it is. Firstly, i-FM reports that the cleaning sector is feeling the pinch; recent growth figures have hit 14% per annum but this is expected to slow to 2% for the current year and just 7% over the next 5 years. This tells us nothing of the effect on margin, of course, but we all know that higher turnover doesn’t necessarily mean that profits aren’t eroded.

Then there’s FM World, which also seems to be reflecting the true state of the market now. On the subject of projects and capital spend, we find that “Interior Services Group has reported that many of its corporate clients have delayed or cancelled projects due to start in quarter four of 2008 or next year.” No surprise there, and I doubt that it isn’t a picture reflected in many, if not all, of that sector’s order books. More worryingly perhaps, a report earlier in the week shed some light on what’s really happening so far as a response to the present economic climate is concerned: “Businesses across the service sector have reduced investment and spend in their buildings and predict that this will decline even further over the coming months resulting in a spate of job losses across the FM sector. That was the gloomy message from the CBI’s quarterly Service Sector Survey…”

“In the three months to November, firms reported steep falls in business volumes and profitability, as well as plans to scale back employment and investment. Firms selling services to businesses saw the volume and value of their business, profitability and numbers employed fall at record rates – the steepest declines since the survey began in 1998. Companies are also cutting investment plans sharply as worries about future demand intensified.”

Now there’s nothing wrong with being seen to adopt a positive stance in the face of adversity, but that’s not the same as making bullish noises for bullish noises’ sake. The FM sector, like all other sectors, is being hit hard and the position is unlikely to change as we head into a New Year that might well see a number of established players do well to last the course.

To my mind, I do believe that opportunity exists out there, but I would add a large dose of realism to what I’ve seen written by others. For client organisations, it’s time to go back to basics with a review of FM strategy, a reconsideration of business need both in terms of services and service levels, and – out of that – an appraisal of supply options. From my own experience, this process usually becomes part of a “contract life-cycle” but there’s no reason why special circumstances shouldn’t result in a different approach and a different timetable. For service providers, it’s absolutely imperative not only to be proactive, but also to be innovative. Doing nothing will simply result in margins being eroded or – worse still – contracts being lost as clients align themselves with those organisations demonstrating a commitment to delivering better value. That’s “better value”, not “lower cost”, and the two things are not necessarily the same (although I accept, of course, that they often go hand in hand).

One thing I don’t see for 2009, however, is a year of business as usual. Those who pretend that it will be are likely to be the first casualties of the media hype I referred to earlier.

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Today Europe, Tomorrow the World

2008 awards graphic
Mike Liddle and I were very proud to be re-presented with the EuroFM Partners Across Borders Award 2008 at the PFM Awards held at the Brewery earlier this week. It’s always a great night and an opportunity to catch up with old friends as well as to network with new, but having such a personal interest in the proceedings made it extra special. (I well remember Edifice winning the marketing award too, back in 2002… it’s frightening how quickly the years go by.)

Anyway, this award was for work we carried out in support of Microsoft’s initiative to harmonise the management and delivery of facilities services across EMEA. The project started more than two years ago, and it’s interesting to see how the market has changed in that time. It’s still evident that a single-source solution across such a diverse geographic area is problematic, but there’s no doubt that the market is maturing quickly and that a host of the major players have aspirations to extend their reach well beyond the domestic market here in the UK. Indeed, many have already made major inroads, although in my view there’s still a long way to go if we’re truly to achieve consistency in terms of service delivery, the advantages of a uniform approach to reporting and information management, and a real benefit from the migration and sharing of best practice.

Another thing that I find particularly interesting is that those who practice within the “traditional” FM sector are finding that the real estate professionals are now muscling in on what is a growing and valuable market. The benefits of a professionally managed real estate portfolio are vast when one takes a pan-European view and big wins are available to those who are ahead of the game. The danger, as I see it, is that with this change comes an inevitable transactional focus; this might be where the headlines are made but – once FM becomes a bi-product of the real driver behind the relationship – the danger is that operational performance will suffer. Once that happens, the cost to a business can be more significant than any headline savings in real estate because, after all, it’s the people within a business who deliver the profit. Keeping FM on the agenda in such a scenario will itself be a challenge, but it’s a challenge that simply has to be overcome.

I suspect that the next couple of years are going to see a number of large-scale, cross-border contracts coming to the market, and the value of these contracts will inevitably shape the strategy of the more aspirational service providers as a greater and greater number seek to get their hands on a piece of the pie. Such a strategy is fraught with difficulty, with a need to focus on supply chain capability, management structure, training & development, system integration, etc – all across national borders… and that’s in addition to the cultural and legal issues that will inevitably arise in any such opportunity.

There’s no doubt that these are interesting times, particularly with a global recession adding fuel to the fire, and I feel fortunate indeed to be playing even a small part in navigating a way through the transition.

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