Spend Time on Planning FM Procurement, Not on Process

Tom Gregory
There is a surprisingly common occurrence in the facilities management (FM) industry: FM contracts fail. Why should seemingly straightforward service contracts suffer from this trend?

While facilities management (FM) is not about building a complex machine to specification or a niche supply market with limited suppliers, it is more than a commodity. Buildings are complex to operate, service and maintain. If you combine this baseline complexity with volume (large portfolio's), and service delivery across multiple service-line specialisms, then you quickly get to the conclusion that FM is far from the commodity it is currently considered to be.

FM is a complex service category and FM contracts fail for a number of reasons but these reasons can commonly be traced back to the lack of time and expertise spent planning and implementing the results of the procurement.

It's challenging for the buyer to navigate FM procurement. To put the odds-in-our-favour an FM buyer should, for a start, focus on the critical stages of FM procurement. Faithful+Gould's three stage FM procurement model, (aligned to the Chartered Institute of Purchasing and Supply (CIPS)), guides buyers through each stage of FM procurement.

Figure 1: Three Stage FM Procurement Model

The first and last stages of procurement, planning and implementing, are where FM buyers should spend more time. Organisations often jump into procurement (stage 2). Yet time spent on planning (stage 1) and implementing (stage 3) is where long term value of procurement is realised.

Typically an organisation buying FM will apply the same minimum level of resource effort and skills through-out the procurement process. Commonly, effort ramps-up during procurement because it feels like there is a lot to do - develop specification documents, manage the tender, select the supplier etc. While the procurement process is undoubtedly important it does not have the same long-term value to the organisation as the planning and implementing stages.

The first and last stages of procurement, planning and implementing, are where FM buyers should spend more time.

The performance of the organisation's core-business demands that the servicing, operation and maintenance of its operational environment is optimised. Accessing this value by establishing a successful long-term FM services contract far outweighs the up-front investment in the planning and implementing phases.

Faithful+Gould encourage clients to spend more time on the planning and implementing stages of FM procurement. Planning (stage 1) should include:

  • Align your FM strategy with internal business drivers
  • Be clear about the expected outcomes
  • Define the spend under management
  • Carry out an FM market review
  • Analyse current data
  • Where possible, deal with problems before outsourcing

Meanwhile, implementing (stage 3), should include:

  • Plan the project management and on-boarding
  • Agree performance measures
  • Carry out client and supplier resource modelling
  • Carry out lessons learnt

Complexity makes FM procurement difficult as the size of contracts increases, the market grows and commoditisation continues. By focussing resource on planning and implementing, long term value will be realised from your FM contract.