It’s only $29.74. That’s maybe the price of a decent bottle of wine, or a pair of cheap sunglasses. But this $29.74 is what separates being the best from being at the bottom. According to a 2010 Aberdeen Group study work order costs for a best in class operated facility was $4.18, whereas the laggards outlay was $33.92. That’s a very significant delta!
Seeing such a huge gap between the best and the worst performers, has us turning our attention to the key attributes of facilities management best practices.
Becoming a Best-in-Class Facilities Management Organization is almost impossible to prescribe or describe. There are so many potential elements to achieving this stature.
Most organizations have a vast list of operations and elements which best practices can be applied to. It’s virtually impossible to do them all, let alone being the best at them all.
What metrics or measures go into determining if you are best-in-class or not?
Are overall financials the best indicator? Your share price? Your profitability? Unless your entire business and revenues are 100% FM it’s not a good measure. Even if your business is solely FM, share price is not comparable because of many external factors. As well, profitability is often not as sustainable as it might seem.
Better to use internal operational measures. They should be more sustainable and they drive the fundamentals of your business.
We ask what are there any key indicators or attributes of best-in-class? What best practices are more important than others? What seem to be the most important or most common attributes of best-in-class FM organizations?
The Aberdeen Group’s 2010 FM study categorized companies into: Best in Class (top 20%), Average (50%), and Laggard (bottom 30%) based on the performance of these key metrics: cost of a work order, plus the percentage of change in ops costs and change in energy consumption over 12 months. The study highlights that:
Everyone had the same goals of reducing operating costs.
Only the B-I-C were able to make a significant impact.
As we highlighted in our previous post, B-I-C is not about strategy in FM but is all about execution of strategy. Some of the common themes of the B-I-C organization include:
Measurements (in all of these the B-I-C were twice as likely to apply these measures):
They link their facilities metrics to the companies financial metrics.
Monitor and measure energy consumption and link it to decision making.
Accurately forecast, track, and report on their facilities budgets.
Processes: processes are standardized. Measurements in place to see the performance.
Organization: there is strategic sponsorship from the executive team for FM decision making. There is operational support to ensure alignment with corporate strategy and goals. All needed support is given.
Technology: B-I-C organizations are twice as likely to have specific FM systems technology. This technology specifically supports their function rather than adapting and utilizing other corporate systems. Technology helps with:
Streamlining operations and day-to-day processes.
Having energy management measurements and solutions aligned with investment decisions for improving energy efficiency. Validating the ROI keeps the process on track and mitigates drift.
Integrating workforce management solutions which allow for effective space and asset management.
Performance management: supported by technology, B-I-C organizations have the ability to easily track and measure performance, in the field and to do exceptional reporting. They focus on managing the time it takes to do different activities.
There’s no secret recipe for becoming B-I-C. There is supposed to be “best practices” for everything you do, from preventative maintenance around HVAC systems to how you clean toilets. Ultimately it’s all about doing the fundamentals well, and aligning everything that you do with strategy and related goals.
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“If you are deliberately trying to create a future that feels safe, you will willfully ignore the future that is likely.” ― Seth Godin