Innovation is one of the consistent requirements we see in facilities management service agreements being brought to market. Clients put considerable emphasis on ensuring that, by outsourcing they are buying cutting-edge, on-market solutions.
Outsourcing allows clients to access expertise in a field that is not core to their business, and obtain the greatest value from a skill set and expertise that is unlikely to be present in their organisation. But while clients are demanding innovative thinking, it is still the basics of facilities management that are proving challenging to those responsible for estates.
Clients perceive that by procuring facilities management services in a highly competitive marketplace, they will be buying a leading-edge product; one that offers contemporary responses to their property management and maintenance requirements. They also want this quality of service to be maintained and improved throughout the contract. They often focus on including innovation as part of the contract’s objectives, measured by key performance indicators to ensure that there is an incentive to continue to bring initiatives to the table, enhancing value from the agreement. Similarly, in a highly competitive market, suppliers are straining to differentiate themselves from one another by any means other than cost.
Innovation is one of the consistent requirements we see in facilities management service agreements being brought to market.
Myriad promises and “innovative” solutions are contained in every tender return, some more practical and achievable than others. Although it is important to ensure that the sector, its suppliers and clients consider progressive methods, is there a disproportionate focus on this area? Why is there not greater emphasis on the core delivery of basic facilities management services, and on delivering them well?
The facilities management profession has for some time been in a race to the bottom. The introduction of new frameworks, especially in the public sector, has seen the emphasis shifting almost entirely towards cost, irrespective of technical-to-commercial ratios of evaluation. An apparent inability in most cases to differentiate value from cost has led to thinning margins and a requirement to manage contract sums so tightly that it is detrimental to the basic provision of core facilities management services.
We advocate that the profession should bring added value to client portfolios. Good practice should be shared; collaborative working to enhance the value of the facilities management contract and users’ experience is crucial. However, we need to ensure it is done on a solid platform. From any supplier or client perspective, the primary issue should be: “Are we compliant, and can I prove it?” This should not only concern planned maintenance inspections but also any remedial action resulting from them. Often, we find no comprehensive understanding of maintainable assets, nor a robust change management process for keeping the asset register.
Good practice should be shared; collaborative working to enhance the value of the facilities management contract and users’ experience is crucial.
Faithful+Gould is often engaged by clients when this question cannot be answered. This is usually a reactive request as a result of an audit or incident. More often than not, the findings are due to the basics not being executed, controls not being in place and a lack of client visibility of supplier performance. Clients often have a tendency to accept the management information provided by the supplier without having a process in place to test, verify or challenge its validity. While some would argue that trust is essential to these relationships, the client must also ask themselves whether they are doing everything they can to be sure that the performance and associated level of risk are understood. After all, health and safety legislation cannot be entirely discharged to another party.
A lack of compliance with statutory regulation can result in financial penalties for that failure, as well as personal or corporate prosecution and damage to brand and reputation. Recent trends in the development of the regulatory health and safety frameworks have been to increase the duty of care on employers and those providing services. Criminal law was the primary focus for breaches of previous prescriptive standards, under which an offence had to be proved beyond all reasonable doubt.
The law and supplementary standards, such as approved codes of practice, have evolved so that they are no longer based on regulatory compliance but sit under a framework of a reasonably practical duty of care.
The strict and absolute duty on employers and service providers means that where the breach of a regulation is proved, the only defence against prosecution is to demonstrate due diligence; that is, to show that you have done all that was reasonably practical to avoid the breach.
Deskilling and commoditisation in facilities management has led to the market failing to discharge its planned maintenance responsibilities consistently.
Whether done in house or outsourced, planning and completing statutory and mandatory or regulatory maintenance is notoriously difficult to track and prove. Deskilling and commoditisation in facilities management has led to the market failing to discharge its planned maintenance responsibilities consistently. Root causes for this include poor asset information – collection, verification, upkeep – and poor maintenance planning. This is driven by uncertainty over which standards to apply, poor systems and processes to manage maintenance tasks, and poor training and education of the maintenance workforce. When these market failures are considered in the context of the Health and Safety at Work etc. Act 1974 and the Corporate Manslaughter and Corporate Homicide Act 2007, then the value of independent technical assurance becomes clear.
It is not enough for those who are corporately accountable for safe environments to trust that maintenance is being managed and provided by those responsible. Transparency must be established so the risk can be ascertained and then mitigated or managed. Those accountable must assure themselves that maintenance is being competently carried out and that they can prove it. The consequences of inaction are significant when considered against the potential impact of failure.
For organisations that outsource facilities management provision, further value is created in expanding this assurance to comply with contract. Auditing suppliers against contract requirements and performance standards is important in evidencing whether value for money is being achieved and clients are receiving what they pay for. True innovation in facilities management is applying new thinking to the same old problems. We should not be experimenting at the edges with technical solutions; we should be turning our thinking to how to bridge the fundamental divide between client and contractor to provide assurance and ultimately to improve performance.