Top IWMS Benefits

There are many benefits to Integrated Workplace Management Systems (IWMS). Here are my top picks:

 

  1. Streamline Processes and Optimize Resources

In every organization there are a lot of processes that help individuals to optimize their contribution to the primary process of the organizations, usually to make sales profitability. While Real Estate & Facilities Management (REFM) professionals rarely are tasked with sales primary processes, their processes can have a large impact on profitability, usually by controlling costs.  Integrated Workplace Management Systems can easily help you to streamline those processes to save time, reduce cycle times for work requests and eliminate waste, thereby lowering operating expenses.

 

  1. Optimize Space Utilization & Occupancy

Real Estate costs account for 10%-25% of an organization’s cost base. As cost reduction programs have made it to C-level, organizations need to have an accurate and timely view of their real estate portfolio to ensure that both current and future  organizational space demands are aligned with their supply. Facility maintenance and operations costs are largely derived from the amount and type of space in its portfolio. Therefore organizations need to optimize space utilization and not serve extra space or under-used spaces. IWMS helps you to quickly identify space vacancies or under-utilized areas of your portfolio, which can be used to improve your REFM metrics and the organization’s bottom line.

 

  1. Monitor Performance to Optimize Resources and Organizational Flexibility

Matching service demand and delivery is extremely important for every organization. You need to be able to monitor both in-house and service provider performance to ensure that you have appropriate resources to support the organization’s goals. In addition, you need accurate, timely data to ensure that the Service Level Agreements (SLA’s) negotiated with your outsourced partners are aligned with performance. Through  custom, easy to generate Dashboards and advanced reporting functionality, today’s IWMS empowers your organization to effectively manage service delivery quickly and accurately.

 

Organizations that haven’t outsourced their service delivery will benefit from the resource planning and allocation functionality that most IWMS systems provide. Team leaders can easily schedule tasks to available resources and effectively plan their workload.  What’s more, resource allocation in IWMS can enable allocating tasks only to appropriate resources and help identify gaps to justify additional resources and training development plans for staff.

 

Lastly, some REFM tasks can be automated by an IWMS. The system reduces the required human interaction and thus, reduces the staffing requirements. REFM organizations can do more with less. This is especially helpful during ramp-up and expansion where a 25% increase in productivity could be achieved via IWMN instead of hiring another staff member. Indeed, expected productivity gains should be a key part of any justification or ROI analysis for IWMS implementation.

 

  1. Minimize Human Errors

Humans make a lot of mistakes. About 80% of all Facility Management and Real Estate processes can be standardized and automated. Standardization and automation of processes in an IWMS ensures a reduction in human errors. Fewer errors also mean faster cycle times, higher customer satisfaction, reduction of redundant work and fewer costs involved with error recovery which has a direct impact on the bottom line.

 

  1. Enforce Organizational Policy

Every IWMS can enforce organizational policies. By enforcing policy adherence,  you ensure that people actually comply with your business goals and regulations instead of only considering them as guidelines.

 

  1. Never Lose Your Data or Waste Time Finding It

IWMS is a central location for all you REFM data. Better yet, the best IWMS systems are SaaS, Software as a Service, meaning that it’s in The Cloud, available whenever and wherever you have internet access. It gets better: because the software and data reside off-site at professional Cloud Providers, you never need to get I.T. approval for hardware, software, updates or changes. You control your destiny, not I.T.

 

With IWMS costs and implementation timelines at a fraction of where they were just a few years ago, there is no reason why any REFM organization is not using a SaaS based system today.IMG_20151111_152326

Mutually Beneficial Contracts – Fact or Fantasy?

Have you ever completed a Request for Proposal (RFP) for a complex service agreement only to realize that you are not satisfied with your best choice? You’re either not sure about the pricing (worried that you are overpaying or underpaying and will get hit with change orders later on) or whether the service provider can truly deliver the quality of service that you expect. I know that I have many times felt this way.

Now what? It may be time for you to pursue a “Mutually Beneficial Contract” with your service provider.

“Mutually Beneficial Contract”(MBC) is a term that I coined when I could not find the type of contract that I describe here after using several search engines.  So you heard it here first.

“Mutually Beneficial Contracts” definition by Ed Novak:

“A Mutually Beneficial Contracts is a contract or agreement between two parties, usually for complex services where a detailed scope may be difficult to define, based on shared values, Key Performance indicators and common goals that usually result positively for both the Service Procurer (buyer) and the Service Provider (seller).”

Since an organization (service procurer) and its suppliers (service providers) should be interdependent with aligned goals in a mutually beneficial relationship, a MBC between them strengthens that relationship and increases the ability of both to add value and ensure success. There are five core shared values in a MBC:

  1. Openness – willing to share information that one may not normally do when negotiating a service contract.
  2. Trust – believing that both parties are working towards a common goal that will be mutually beneficial for both. In typical negotiations, there is not a lot of trust; both parties try to maximize their financial position and believe that the other party is doing likewise.  main driver other is trying to maximize.
  3. Respect – treating each other as equal parties that both bring value to the relationship. One party may understand how the business runs while the other can provide insight on how to improve that type of business. The two parties work as a team to arrive at the best solution.
  4. Honesty – working together to achieve a mutually beneficial goal by sharing information openly, accurately and timely.
  5. Flexibility – willing to change positions and pricing as more information is obtained.

Both parties must practice these five shared values to ensure a successful Mutually Beneficial Contract. In addition, Key Performance Indicators (KPI) must be established prior to final contract execution which will be used as the basis for final financial cost of the service. Sound good? Here is how it works,

Steps for Implementing a Mutually Beneficial Contract

Step 1

The potential service provider and the procurer each submit a Rough Order of Magnitude (ROM) budget on a slip of paper and share the amounts with each other. In most cases, you can split the difference and make that your new baseline budget. Since I already have pricing from the RFP, I have a reasonably good idea what this should cost. Note: if the service provider’s ROM is significantly higher, then further analysis should be performed to determine the reason for the budget disconnect.

 

Step 2

Once you have two budget numbers that are fairly close, the procurer issues a Time and Material (T&M) Not To Exceed (NTE) purchase order or contract for and amount that is the difference between the two ROM budgets. This is not a final budget amount; both parties understand that the final amount will change because the scope requires fine-tuning.

 

Step 3

Part of the T&M expense will be used at this point to help with detailed planning to help get to the next budget, GMP. It’s only fair to pay the service provider for this service, but if planned well, it should more than pay for itself by resulting in a successful move or project.

 

Step 4

As the scope becomes more refined and the service provider has shared his proposed costs for hourly labor, equipment, etc., the service provider should be able to generate a detailed project budget and schedule that will replace the original ROM budget. This will become a Guaranteed Maximum Price (GMP) for the service and will not change unless either the procurer changes the scope or Key Performance Indicators affect the GMP price. OK, under a Mutually Beneficial Contract, the final price is not known until the work is complete because the procurer will place both incentives and penalties in the contract. Work with your service provider early on to establish the KPIs that will go into your MBC. Here are the areas that most project managers would consider when evaluating or being evaluated for a project:

Time & Schedule – Did the work get completed on-time? Were deadlines met? How responsive was the service provider to changes? Were agreed upon down-times met?

Cost – This should not be a factor with a GMP contract, but if your service provider asks for more money that were not caused or initiated by the procurer, then you have a problem

Customer Satisfaction – While I generally like customer satisfaction surveys, I don’t like them as part of the KPI that effects the final payment amount in a MBC because it is too subjective. I can measure time and schedules and waste (see next item) but perceptions are arbitrary.

Waste – In complex projects careful planning is required for flawless execution is required to minimize or avoid waste. If you project has the potential to cause waste to your inventory or product then you should include at least one waste KPI.

I don’t believe in using only sticks – I like to use carrots too. Therefore, if the service provider can exceed the approved KPIs, then it is worth giving the provider some of the money back that we removed from the budget in Step 2.

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Mutually Beneficial Contracts are not for every situation, but they are worth pursuing in the right situation as long as the five core values are shared and meaningful Key Performance Indicators are deployed.

Goals and Objectives for REFM Professionals

At Epicus Group, we are a strong proponent of managing by objectives where our individual goals are tied to the overall company goals and objectives. We tie our individual goals to six key business metrics, which I wrote about last year, “6 KEY BUSINESS METRICS (THAT EVERY REFM PROFESSIONAL SHOULD KNOW)” In that article I wrote that In order to be successful, we need to speak the language of business and learn how our world of commercial real estate and facilities management impacts these six key metrics:

  •          Market Share
  •          Revenue
  •          Operating Profit
  •          Cash Flow
  •          Quality
  •          Customer Satisfaction

In addition to understanding these metrics and tying them into your role and responsibilities as a real estate / facilities management (REFM) professional, your performance should be tied back to at least one of these metrics. To do this well, company or top organizational objectives should have clear goals and objectives that tie to each metric and then cascade down the organization to the goals of the individual.

Take a look at the goals and objectives on your performance development plan (PDP) for this year. Do they tie back to your organization’s top metrics? If not, consider the possible reasons: perhaps your organization is not taking its performance development program very seriously. Or worse, the organization is using the performance development program as a tool to cover themselves when it needs to make organizational changes. If this is your situation, then you owe it to yourself to update your PDP to reflect meaningful goals and objectives.

 

G&) Pyramid

You can follow these three basic steps to generate meaningful goals and objectives.

1. Determine where your current objectives fit into the following Goal Categories.

a. Revenue & profitability

b. Operational improvements

c. Individual skills & education
These three Goal Categories are fundamental to any organization and everything you do should impact one to improve its outcome. If any of your goals don’t seem to fit into one of these Goal Categories, then perhaps you need to develop some new goals. As a REFM professional where your profession touches every aspect of the company or organization, you should have little trouble matching them.

2. Once each of your goals and objectives are matched to a Goal Category, use the following table to match each one to the appropriate metric. Many goals and objectives will tie to more than one metric as the table below shows.

 

6 Key Metrics Table

 

Here are some examples that an REFM professional might have as a goal:

Support market expansion activities as company rapidly gains market share in next year by providing space solutions that meet company needs. (Revenue & Profit -> Market Share)

Ensure that operational space is aligned with revenue plans and activities for the next year. (Revenue & Profit -> Revenue)

Complete 5 capital sustainability projects with ROIs less than 3 years. (Operational Improvement -> Operational Profit + Cash Flow)

Complete “Energy Star” bench-marking to compare the energy performance of every facility over 10K SF and report energy savings opportunities by June. (Operational Improvement -> Quality + Operational Profit)

3. Now that your goals are aligned with your organizational goals, make sure that the objectives tied to them are SMART which stands for:

Specific

Measurable

Achievable

Relevant

Time-Bound

 

Note – Wikipedia lists several alternate words in the SMART acronym, but I was taught these 5 many years ago and believe they are the best. 

Everybody’s goals and objectives can be easily tied back to the top organizational goals. If this is not your situation, then it might be a good time for a discussion with your boss so that you can be sure that your SMART goals and objectives are aligned with your organization. You really can impact the success of your organization, but only if your work is aligned.