Life after Carillion

FMJ and leading FM company Salisbury Group brought together a group of senior client-side FMs under Chatham House rules to discuss the sustainability of FM contracts and how to deliver mutually beneficial partnerships for clients, service providers and subcontractors

PARTICIPANTS

• Sara Bean (chair), Managing Editor, FMJ
• Nick Platt, Managing Director, Salisbury Group
• David Tarbuck, Head of Communications and Content, Salisbury Group
• Charlotte Bovill, Operations Director, Salisbury Group
• Stuart Bonner, Senior Director, Investigo
• Mark Lishman, Head of Facilities, Safestore
• Jon Ellis, Head of Property and Facilities, AA
• Vicky Thorp, Head of Facilities, CLS Holdings
• Lucy Hind, Facilities and Sustainability Director, Covance
• Simon Francis, Head of Estates, London South Bank University
• Glyn Jones, Head of Facilities, Stevens & Bolton LLP
• Ian Wright, Head of Soft Services, University College London
• Robert Crawford, Group Head of Facilities Management, Pattonair
• Paul Mullins, Head of Facilities, Travers Smith
• Andrew Alderson, Head of Property and Estates, Bluefin Insurance
• Joseph Delap, Head of Property and Facilities, Nuvia
• Adell Vass, Head of FM and Projects, Landmark

The reputation of outsourcing within the FM sector has taken something of a beating following the collapse of Carillion. The damning conclusion of an influential group of MPs was that “recklessness, hubris and greed” led to the construction and FM firm’s collapse. The ongoing enquiry by the Public Administration and Constitutional Affairs Committee has warned that a similar collapse could happen again unless lessons are learned about risk and contract management, and the strengths and weaknesses of the outsourcing sector.

Given this kind of negative publicity, we began our discussion with the question of what services suppliers can do to help win back confidence in the sector.

According to Nick Platt, Managing Director at Salisbury Group, one of the most important areas to address is that of transparency. “In the procurement process you might have hungry sales and procurement people who agree on the price but not the level of service. This is why due diligence must be done during the tender process. Suppliers want to win business but they need to see beyond that and sell the value-adding benefits to the business and not just the cost. This means some [contracts] might come in at a higher cost but work out much more positively. This is how you build a good trusting relationship.”

Participants agreed that you need to establish a partnership arrangement throughout the supply chain to avoid situations where procurement walk away after hitting their target, leaving FM to deal with the consequences. Said a senior client-side FM: “It goes back to the relationship thing again because we’ve got to trust our supply chain is delivering what we asked them to, and that will only come about if we’ve got a good contractual relationship.”

It was proposed that one of the biggest challenges revolves around how FM is perceived within the client organisation. The FM pointed out: “If we’re just here as a cost centre then it’s about draining everything down to the bottom line, when it should be about how we can add value to the business and support our core business to deliver its objective.”

It was established that yes, cost is important but it is only a small element. “It’s important to work closely with procurement to make sure the percentage of quality far outweighs the cost to achieve the most economically advantageous tender, rather than the one that is the cheapest.”

Q: How can FMs convince their client organisation that the costs are worth the investment?

Ideally FMs would put a business case in front of the board which clearly demonstrates that productivity will increase if the workplace environment is improved, but that’s difficult to prove. However, as a head of FM explains: “Read the corporate business plan and ask yourself what you can do as an FM to support year one, two or three and build your FM business plan around that. Look at the business as a whole, involve the practice groups and present the CEO with ideas on future developments; for example, space innovations to help the business work better by helping to create a more comfortable workplace for occupants to spend their day.”

Health and wellbeing is growing in importance within the sector and it’s an area where FM can have a real impact on productivity. An FM reported they were “working closely with HR on an analysis of the number of people off sick, why they’re off sick, the environment in which they’re working and ways of providing the right working environment that helps keep staff more healthy and motivated”. Accurate data is vital for this kind of process, which is when a close partnership with a supplier can help the facilities people monitor data to provide feedback to their organisation on everything from the room usage within the workplace to the quality of the ventilation.

The client FMs in the room agreed, however, when clients ask service providers to invest they’re also asking them to take the risk at the end of the three- or five-year contract. As one FM client described it: “I might have to say, ‘sorry, the money has been turned off.’ This means I’ve not been transparent or honest and therefore the market might take the view ‘this is a bit risky so I’ll price accordingly’. We have to have a partnership relationship and ring-fence the money, as shouldn’t client-side FMs also gain their service supplier’s trust?”

The discussion moved on to the importance of investing in a good software system which can help make assets last a lot longer. However, it was pointed out that it’s vital to ensure data is inputted correctly, which “requires as much investment in the time it takes as the cost”.

When it comes to ownership of data, it was suggested there has been a change in the marketplace whereby if the client is a large enough organisation they’ll buy in their own CAFM system. As one head of FM described it: “This is because when a large contractor provides their own CAFM platform, you leave them and they provide you with a load of unreadable data in HTML format from over the past five years. This is because many of the larger providers dress everything up within that system, meaning you simply can’t sieve through the data.”