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

Top 5 Reasons Why FM’s Need Space Management

This White Paper comes from James McDonald at iOffice. Follow the link, sign up and check it out.

http://www.iofficecorp.com/resources/white-papers/5-reasons-fm-software-need

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.

 

My Picks for the Top Facilities Sustainable Trends for 2014, Part 3 of 3

Introduction

 Welcome to the third and final part Top Sustainable Trends for 2014. In my last post, I covered top threads four through six; now we’re on to the homestretch: numbers seven through ten. I applaud and thank you if you made it through the prior to posts.

Here again is my Top 10 list:

 My Top Sustainable FM Trends for 2014

  1. Energy Efficiency
  2. Indoor Environmental Quality
  3. Water Conservation
  4. Workplace Management
  5. Waste Management
  6. Transportation
  7. Materials and Resources
  8. Sustainable Services
  9. Site Impact & Landscaping
  10. Sustainable Roofing

 Benefits of Sustainability

 In part 1 I explained why I believe sustainability is important for facilities management and explained the three primary benefits of sustainability:
  • Financial F
  • Environmental E
  • Social S
 Please read my prior post for more details on each sustainability benefit. As in that post, I list the primary (Capitalized) and secondary (lower case) benefit for each trend. Your situation may be different and you may be able to justify any sustainable initiative by any of these benefits.

Her’s my final four:

7.     Materials & Resources – Efs

While the environment is the big winner when you switch from toxic chemicals and products containing hazardous materials, such as VOCs (volatile organic compounds), you can actually save a lot of money, largely due to contributing to the health of your employees and other building occupants. Other companies will soon follow sustainability leaders like Google, who search and deploy the most sustainable products for their workplaces. In Google’s case, Social is the big reason as they are sincerely concerned about the health effects from toxic and hazardous materials in the built environment.
Here are some basic sustainable things that every FM should implement that require some work, but can usually be justified.
  1. Green labeling – ask your vendors for it – there, that won’t cost you a dime. Make sure that the green or sustainable material labeling is certified by a thrid party and is not just an industry “rubber stamp” to make their products look green. Also, be sure to ask for MSDS, which list all the chemicals of products before allowing them in your facility
  2. Travel distance – seek local sources. Ghandi said it was a sin to buy something from someone farther away then from someone nearby. Maybe, but it certainly is better for the environment and your local economy to procure items locally than from half way around the world.
  3. Embedded Energy – this one gets a bit complex and I honestly don’t know how one calculates the total energy used to produce and deliver a product. Therefore, ask your supplier. If they don’t know, then ask another one. The information is out there, you just need to look for it.
  4. Food – I could (and maybe will soon) write an entire article on food for the workplace. In brief, look for sustainably grown (organic if possibe) food that is mininally procressed and produced as local as possible.
  5. Small, Diverse suppliers– simply put, diversity is good. We’ve all seen pictures of mass produced buildings (think suburban sprawl in this country or fomer Eastern Bloc concrete apartment buildings. You wouldn’t want to live in any of those, so why whould you want your employees to work in one? You may pay a bit more when you give some of your business to small suppliers, but most of that money will stay in the community verses Fortune 500 type companies that usually don’t have that local connection and 90% of their money typically goes elsewhere. Check out this great book that I read late last year, “The Unwinding: an Inner History of the New America”, for more examples about the benefits of small local suppliers.
  6. Employment practices – so you found a great deal on office chairs made halfway around the world. OK, how are they treating their workers? Is it consistent with your sustainability goals or even your “good corporate citizen” values?
  7. Cradle to Cradle – Remaking the Way We Make Things by Michael Braungart and William McDonough changed the way that I thought about all products, not just those for the workplace. Essentially, we need to determine what will happen to products at the end of their initial intended useful life – reuse or re-purpose or have them biodegrade quickly rather than dumping them into landfills or worse, scattering them around the globe, swept under the rug for someone else to deal with.
  8. Natural (virgin) vs. recycled – we usually think that recycled materials are better than new ones. However, there are times that a sustainably produced new product is better than a recycled one. For example, when considering copy/print paper, how much embedded energy is used to use recycled content? Also, what chemicals are used for each process and where does it come from? See Items 2, 5 & 6 above.

8. Quality of Services (Sustainable Services) – Sef

Most likely, you are not completely sure what I mean by Quality Services and how this might be a sustainable trend. In the world of Facilities Management, much of what we do and how our customers experience our profession is through the services that we provide. This really is the foundation of FM and must be mastered before you will be considered for other, more complex assignments and responsibilities. Little things can have a huge impact on how your customers perceive your services. By providing more sustainable services, which are becoming ever more important to our customers, we can oftentimes add to the service quality. Here are some examples:
Cleaning products & practices – since our building occupants spend so much time indoors, little things like strong cleaning smells can greatly effect employee productivity and service impressions as can, of course, the lack or perceived lack of cleanliness. Beyond looking at quality and responsiveness, which are fundamentally important to a clean workplace, using non-toxic chemicals and efficient means to remove dust and dirt can improve your customer perception of your workplace. Consider moving cleaning from after hours to normal work hours as this will show your occupants that someone really is cleaning their space and will reduce the amount of after-hours lighting, which will help save money.
Document management – how many storage rooms do you have at your facility? How many of them contain boxes of old paper records which are needed yet rarely accessed? Best practice is to implement a document scanning and archiving system which eliminates the paper documents altogether. If that may not possible, then research document storage companies to store your documents off-site. I recently did this for a customer where we stored about 1,000 boxes off-site that were being stored in a building that was being closed. There were no start up costs – the document management company inventoried all the boxes, moved them and set up a web-based database for free. In addition, there was no rent for the first year! They make their money primarily when someone needs to access and deliver an historic document, but even that fee was quite reasonable. What makes this sustainable is that you have just freed up hundreds of square feet, thereby possibly avoiding procuring more space and / or building more walls for rooms.
Food – In addition to the items that I mentioned in item 7.4 above, look at how you serve food to your employees. Reusable mugs, plates and silverware are a lot better for the environment than throwaway ones. Implementing washing reusable ceramic mugs while eliminating paper or Styrofoam ones is easy, fast (especially if you already have dishwashers) and sends a positive sustainable message to your workplace occupants.
Other site services that you can offer in more sustainable ways include office supplies and paper (where you can investigate sources as well as material content), mail, shipping & receiving (eliminate waste and look at packaging material, copy and printing services (lots of ways to reduce waste), meeting reservation (optimize usage avoid building more) and the materials used for hard-scape maintenance.

9. Site Impact – Ef

In August 2013, I posted an article that I titled, “Building Siting & the Building Envelope – The Developers’ Curse”  where I detail the problems with today’s buildings where the developer does not consider either the siting of the building (for optimal solar gain/avoidance) or how the building envelope is constructed. We are slowly starting to see siting and the building envelope getting back into the construction conversation, so I’m optimistic that we will begin to see more solar sited sustainable shells in the near-term.
Here are five more Site Impact sustainable trends to look for (or implement):
  1. Landscape maintenance – look at the plants in your landscape: are they compatible with your climate? Also look at how you maintain them. Eliminate in-organic fertilizers, pesticides and herbicides, including Round-Up. Ask your landscape maintenance contractor for MSDS sheets for everything they use.
  2. Rainwater run-off is getting a lot of attention with new projects where Bio-Swells are becoming more common and even mandated as a means to limit and reduce rainwater run-off into urban and suburban sewer systems
  3. Road, sidewalk & parking surfaces – hard surfaces prevent absorption of rainwater and allows the oil and pollutants from autos and vehicles to easily enter the storm drainage systems, which usually flows and pollutes rivers, lakes and seas. When possible, use more permeable surfaces, such as crushed gravel, which work quite well for sidewalks.
  4. Exterior lighting – Light pollution is gaining more attention and will result in more mandates for sensors to turn off exterior lighting when no motion is sensed as well as lights that direct down rather than upward or outward into adjacent properties where it may not be wanted.
  5. Traffic – even in these so-so economic times, traffic levels seem to be higher than ever. Facilities Managers are increasingly being tasked with helping their organizations reduce traffic and provide better alternative means for their employees to commute. Solutions to be considered are: ride sharing / car pool programs, shuttle buses, locating facilities near good public transit, bicycle lockers and showers and discount packages for public transit.

10. Sustainable Roofing – Ef

I have been involved with a considerable number of roofing projects lately as Silicon Valley’s commercial buildings age. (at least the ones that don’t get torn down first). Most roof warranties are between 10 and 20 years) and any 25 year old roof is overdue for a full replacement.
For flat commercial facilities, the four most popular types of new roofs are:
  • TPO – Thermoplastic Polyolefin single-ply roofing have gained tremendous popularity in the past 10 years. See graph. And for good reason: the seam strength is reported to be 3 to 4 times stronger than EPDM, plus it’s white finish reflects abundant solar rays thereby reducing the “heat island effect” as well as keeping the building interior cooler than dark roof surfaces. Also, there are no plasticizers added and TPO does not degrade under UV radiation.
  • PVC roof installations, meanwhile have barely gained market-share over the same 10 year period. One reason is that it is subject to “plasticizer migration”, which causes the sheets to become brittle. However, the most likely reason that PVC roofs have not gained popularity is due to the significant environmental hazards from the toxicity of the manufacturing process as well as the noxious compounds released in a fire such as hydrochloric acid fumes and byproducts including dioxin, a potent carcinogen.
  • EPDM – Ethylene propylene diene monomeris a synthetic rubber most commonly used in single-ply roofing because it is readily available and relatively simple to apply. However it is one of the most costly to install and generally does not have the solar reflective qualities of TPO and PVC. Hence its popularity continues to plummet.
  • BUR & Modified Bitumen –   Once the most common new roof type, Asphalt BUR roofs have been around a very long time, but are becoming increasingly less popular (along with Modified Bitumen). If well maintained, these roof types can have extended lives by applying foam coverings, which also makes them more reflective. However, it’s been my experience that most of these roof types are not consistently well maintained and replacement becomes the only option available. When they are not well maintained, these materials tend to fail rather quickly. Lastly, when compared to other roofing systems, installation of asphalt roofs is more energy-intensive and contributes to atmospheric air pollution (toxic, and green-house gases are lost from the asphalt during installation), making this roof type a poor choice for the sustainably minded FM.

For commercial buildings, a  few other sustainable roofing options exist, such as metal, shingle and tile roofs, but none are practical for large commercial buildings, typical in urban and suburban areas. Lastly, I’d love to see more solar PV and vegetative roofs, but the costs continue to make these choices no more than novelty installations as both require a sub-roof, generally one of the four common types listed above.

Building Siting & the Building Envelope – The Developers’ Curse

Five years ago the Silicon Valley chapter of IFMA created a special suppliant to the Business Journal called “An Inside Look at the Facilities Management Profession”. I recently found a copy of it in my office and an article titled, “Adding Value through Sustainable Practices” got my attention.

In the article I noted “that our building is not performing well – we are 71,000 SF on three floors, and the building was constructed in 2003”, only five years old at the time. I went on, “this was a spec building. It looks great on the outside but when it comes to energy costs there is a lot lacking – for example, the north and south parts of the building are designed the same.” So were the east and west: a square glass cube, with no regards for solar siting. I concluded by proclaiming that, “I am going to encourage people to think more about the design of future buildings – solar design is going to be quite important.” And five years later we continue to construct buildings in Silicon Valley the same old way without regards to the Building Siting or the make-up of the Building EnvelopeThe Developers’ Curse to the Facilities Manager.

Attention to Building Siting and the Building Envelope have been of interest to me for a long time, but like many people, I became complacent in the 1980s and 1990s with the return of cheap and abundant oil. I studied Passive Solar Design in college and only became interested again five years ago after managing the horrible spec building that I described above. Since then, I have joined Passive House (http://passivehousecal.org/), completed a LEED-credited “Green Building” class earned my BPI certification as an Energy Auditor (http://www.bpi.org/professionals_designations.aspx) and my SFP (Sustainable Facility Professional) last year. Thinking about the building siting and its envelope comes naturally to me now and I’m surprised that it doesn’t for more facility managers.

Why is the Building Envelope Important?

Beyond its core function to keep the outside environment (rain, critters, etc.) from entering the facility in a way that would be detrimental to the facility, the Building Envelope is also the main means to minimize extreme hot and cold outside temperatures from effecting the interior temperatures of the facility.

The top three components to designing a facility with a good Building Envelope are:

  • Siting – how is the facility oriented on the site? Ideally, buildings should be oriented east-west with the long facades facing north and south. Western-facing windows should be minimal and northern ones designed to capture indirect natural light. One should also factor in the site’s slope, climate, prevalent seasonal wind directions and natural vegetation as well as adjacent land use and structures.
  • Solar Radiation Mitigation – generally, direct solar exposure to facilities in our climate should be minimized to avoid heat-gain even in the winter. South facing windows are good, but in our climate we need to worry more about too much direct solar radiation rather than collecting it for additional building heat-gain as one would in a colder climate. Reflective roofs or green roofs with vegetation a are great ways to minimize exposure of solar radiation from the roof.
  • Materials
    • Companies like Serious Energy have developed products that help make up for the minimally required building materials (such as single-pane windows) that developers will approve without regards to thermal barriers
    • Awnings are a great, simple way to block unwanted solar radiation for south-facing windows and doors. So are porches, but we don’t seem to be designing very many commercial buildings these days with them despite a legacy of porches in early California architecture, ideally suited for our climate
    • Window Films – a minimally costly way to decrease the U-Value of windows
    • Insulation – more is generally better, but check the material content of the insulation material to avoid hazardous and high imbedded energy materials
    • While not a material, all the triple-paned windows and insulation won’t do you much good if you have a leaky building. A single air gap in the Building Envelope can make the rest of the Building Envelope materials underperform and create an expensive and uncomfortable workplace.

With all these ways to make the workplace more comfortable and save energy costs why do decisions about the Building Envelope continue to be made so carelessly? It usually comes down to up-front costs and the FM willing to accept whatever an inferior product that the developer knows they can likely get away with. When you look beyond the First Costs or Rent, you will likely save a significant amount of money if Building Siting and the Building Envelope are seriously considered during the building’s design.

First Costs vs. OPEX

Many decisions about the Building Envelope are made on First Cost basis only without regard to what it will cost to operate the facility or life-cycle costing. This is especially true with facilities built by developers on-spec, where the Building Envelope decision makers, the developers, will never occupy the facility; they never pay for many of the operating expenses (OPEX), such as heating and cooling costs. When the facility is un-leased, the developer / owner simply shuts off the utilities; when it is leased and occupied, the tenant / occupant pays the utilities, either directly to the utility companies or via the landlord as a pass-thru expense. Either way, the developer wins and the occupants (including the facility manager) are cursed.

Rent vs. OPEX

Too often real estate brokers and their clients only focus on the rental rate when evaluating facilities rather than considering all the costs of occupancy. Utility costs, especially electricity, which generally makes up over 50% of a facility’s utility cost and can approach the monthly rental amount in a poorly designed and constructed facility. A well-sited facility with a well-performing building envelope can result in additional benefits beyond greatly reducing utility and operating costs, including:

  • Environmental Benefits
    • According to the U.S. Department of Energy, 45% of U.S. electricity is generated from coal with another 23% from burning natural gas, both contributing increases of CO2 and other global warming gases. With over one-third of a typical facility’s electricity used for HVAC, considering the facility’s site and building envelope in the design can greatly reduce carbon emissions generated directly or indirectly by commercial facilities.
    • Social Benefits to your organization
      • Every experienced facility manager knows that the top work request is: Too Hot / Too Cold. Considering the Building Site during design and improving the Building Envelope can greatly increase the comfort for building occupants, which can only help improve your organization’s performance.

So now that you know the importance of Building Siting and the Building Envelope, here are some things that you can do next.

  1. Spread the word.
    1. Talk to your brokers and designers if you are searching for new space or developing a new building. Ask them what is being done to improve the energy efficiency via Building Siting and the Building Envelope if you are working or seeking new space. For existing buildings that you are considering leasing, ask your broker to provide you with data that shows how energy efficient the building is or what the landlord can do to improve its performance. Some items, from landscaping changes to awnings to new windows are a minimal investment by a landlord compared to the future rent of a prospective tenant
    2. Talk to your manager and business unit leaders about the advantages – savings, occupant comfort & environmental – of investing in Building Site and Envelope improvements if a landlord won’t pay for them.
    3. Talk to your employees and building occupants. If you are considering improving a space that you currently occupy, then find out how satisfied they are with the cost and comfort of the space. Your EH&S and Human Resource departments should be able to assist.
    4. Benchmark your facility. Even if you obtained a good Energy Star rating a few years ago, update it. If you haven’t done this yet, get started as this may be a requirement for all commercial buildings soon and why wouldn’t you want to know?
    5. If you have recent energy usage benchmarking data, but haven’t done much lately to improve your building’s performance, then pursue a professional energy audit. There are many good companies in our area that can do this for you (several are chapter members).
    6. Contact me if you want to learn more or share your experience with making Building Site changes or Building Envelope improvements. I’d love to hear from you.

6 Key Business Metrics (that every REFM professional should know)

After the U.S. federal government bailed General Motors (GM), then GM CEO and Chairman Ed Whitacre, Jr. told a reporter that he reviews only six metrics to determine the performance of a company or organization. Ed Whitacre, Jr. was the CEO of one of the “Baby Bells” (SBC) when the federal government broke up the old AT&T in the 1980s. He later merged SBC with several other Baby Bells, including Pacific Bell, and eventually acquired AT&T to form the current communications giant that exists today, at&t.[1] After he retired, President Obama tapped him to head up the new GM, which he returned to profitability after years of losses and near bankruptcy.

As a real estate and facilities management (REFM) professional, I have been searching for ways to better communicate performance and impact to executives who rarely understand REFM-speak: the jargon and common ways that we talk to each other and our contractors about space, projects and facilities operations. In order to be successful, we need to speak the language of business and learn how our world affects these six key metrics:

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

Let’s examine each of these metrics and see how they tie into the world of a Real Estate and Facilities Management.

Market Share

Anyone who has read any of Jack Walsh’s books knows what a huge proponent Mr. Walsh is of Market Share. Jack Walsh (and I’m sure many other business leaders) believes that if your product or service is not number one or two in market share, then you have a problem with your business. This is one reason why mergers and acquisitions are so popular because they can be a quick way to gain market share and possibly enable your organization to get to or near the top.

I consulted for a company that had recently consisted of two companies: one was number two in market share and the other was number three. When the number three company announced plans to acquire the number four market share company, the number two company quickly worked out a deal to acquire the number three company (nixing the deal between numbers 3 and 4), which made it the new number one market share company in its industry.

Why is this important? In addition to hopefully gaining some R&D, manufacturing and administrative synergies with the merger, suddenly the company was in the spotlight of the media, Wall Street and its competitors. Instead of being an also-ran company, the expectations for the new number one market share company increased exponentially. This meant that the all organizations, including the REFM group needed to “step it up” a few notches and prove to everyone that it deserved to be number one.

So, look at the market share position of your company’s products and services; are they currently number one or have plans to be? If so, you need to be ready to support them like a top—notch organization or you may become an also-ran.

Revenue

You may think that there’s not much that the REFM organization can do to effect the revenue of the company, but the REFM organization plays a crucial role supporting the organization’s ability to support revenue plans, especially if revenue suddenly increases or decreases. How do you prepare for this? The best way is to know that you have the right amount and the right type of facilities. Are your facility plans in-line with the organization’s revenue plans?

In today’s fast-pace business world, you need tools, such as a CAFM system to be ready for rapid changes. This is your foundation for your strategic facilities plan where you can readily access the data you need to support your plans and how they are aligned with the top goals of the organization.

Operating Profit

Investors look closely at Operating Profit every quarter to evaluate a company’s performance. After deducting the cost of revenue (what did it cost to make or purchase the company’s products), R&D, SG&A and any non-recurring costs, you end up with the operating profit or loss. A small reduction (less than 5%) of the REFM operating budget can have a significant impact on the company’s Income Statement, often improving the EPS by a penny or more. A penny may not sound like much, but it can make a huge impression to investors who can significantly affect your company’s stock price. Therefore, anything that you can do to reduce costs – think sustainability programs – can be quite valuable to your company.

Cash Flow

Cash flow is a financial metric on the company’s balance sheet that indicates the financial health of a company. Obviously, cash is good and if the latest balance sheet shows an increase of “cash and cash equivalents” then generally the company is operating well: revenues may be increasing and / or operations are well-run.

For REFM, continuous improvement in operations, including savings from implementing sustainability initiatives can help improve cash flow. In addition, investing in a CAFM system to better manage space can result in an optimized portfolio and help avoid wasteful investments in excess space. Additionally, managing your vendors well by ensuring that they fully perform their contractual obligations can help you to avoid wasteful spending. While finding ways to improve your company’s cash flow is a worthy objective for every REFM professional, delaying vendor payments beyond the agreed upon terms is not a good or sustainable practice. This is not fair to your vendors, especially small ones that receive a significant amount of their revenue supporting your operations.

Quality

The quality of a product or service can have a significant impact on the success of the company’s offerings. Just as companies can look to 3rd-party unbiased firms to assess and rate products (think Consumer Reports as an example), the REFM organization has its own means to measure the quality of its products (space and facilities) and services.

Benchmarking is a terrific way to measure quality that is an often-used tool in the REFM toolbox. Virtually any part of your facilities, from space to operations can be measured and benchmarked against past performance and comparable operations. There are several ways to benchmark your operations:

  • Start your own benchmark study and invite colleagues to join
  • Hire a company that performs benchmarking studies or participate in one for free. If you participate in IFMA’s benchmarking studies, for example, you will receive the study report for free
  • Use an on-line tool such as the “Energy Star” benchmarking tool to compare the energy performance of your facilities to industry standards to begin understanding opportunities for energy savings

Surveys are another useful way to measure the quality of your operations, which I will cover in the final key metric.

Customer Satisfaction

Just as your company needs to know what its customers think of its products and services, you should know how your customers think of their facilities and associated services. Surveys are the best way to find out. As with benchmarking, you need to establish a baseline of current performance that can be used to set future performance goals and determine where improvement is needed.

Another way to survey your customers is to provide a link to a simple survey after completing every Facility Work Order (FWO). As you gather data regarding your service levels, you will begin to understand your team’s performance better as well as identify problem areas that you can begin to address by discussing performance concerns with your customers. Again, keep the survey simple: I use a scale from 1 to 5 and anytime that I receive a score less than 3, I want to have a conversation with the person who gave us a low score to find out where the problems are, determine how to improve services and ensure that future work is completed in a satisfactory manner.

Communications – Speak the Language

Understanding and incorporating these six core metrics into your vocabulary and reports to your executives will enable you to communicate more effectively with them when you are proposing new projects and changes to your operating expenses. Your executives may prefer a few other business metrics, but start using these six core metrics. Once you begin to speak the language of your executives they will realize that you understand their world which will lead to greater success for you and your organization.


[1]To differentiate between the old AT&T and the new company, the new company is referred to as at&t, all lower case.