savings initiatives in integrated facilities services...

Savings Initiatives in Integrated Facilities

Services/Management Deals

Terry Mills,

GVP & Head of Corporate Clients EMEA Region

Areas to be covered

Typical Sourcing Drivers

Indirect Benefits

Direct Benefits & Savings Initiatives

Managing Quality

Summary

IFS increasingly demanded and important for customers

3

2006E 2009E 2012E 2015E

Global outsourced facility services market by contract type

Single services Multi services IFS

CAGR

’06E–09E

2%

3%

2%

7%

CAGR

’09E–15E

6%

7%

5%

10%

DKK Trillion

4.7

4.4

5.4

6.5

2015E 2012E 2009E 2006E

Simplicity and trust

“Quality is worse with third parties. They are either exploiting staff or the package becomes more expensive.” HR manager, Spain

“In our experience self-delivering IFS providers deliver the high quality we need.”

Facilities manager, UK

“Self-delivery get us better control, quality and responsiveness.”

IFS Customer, UK

“We want self-delivery because it leads to higher quality and better security for us.”

Operation manager, Finland

“Trust goes down and prices go up when third parties are involved.”

Administrative manager, India

“We plan to move towards IFS because its easier, faster and more convenient to have one contract and one invoice from the services.”

Facilities manager, Sweden

Source: Management estimates based on market studies

• Faster time to market (vs internal route)

• Catalyst for cultural change (acquisitions)

• Increased flexibility

• Improved operational quality / stability

• Focus on core business

• Transfer of Risk

“Out task” “Out Source”

•Direct cost reduction

•Procured against activity based

specifications

•Reduction in Total Cost of Occupancy

•Leverage Real Estate/Production

Single service GRE IFS

“Retain”

Typical Sourcing Drivers

Maintain acceptable service levels and perceptions

Provide acceptable transfer conditions for personnel in scope

Provide systems, tools and solutions not available in-house

Typical Strategic Savings

Optimise retained organisation

Move from managing delivery to results and contract

Shift focus to higher value activities

Fewer more strategic interfaces with Suppliers and Business

Transfer in-house delivery, reduced HR load and liability

Need right skills in right “places”

Need to allow for transition and initial transfomation

Rationalise supplier base

Finance Admin and Procurement

Agility

Large changes more predictable and manageable

Greater tolerance to smaller changes

Faster support to acquisition integration

Faster realisation of tactical benefits

Transparency

Risk Transfer

Warranties and insurance liabilities

Personnel

Assets and Technology

Continuous Improvement

Typical Tactical Savings Expectations

3

Years

ARD, Transition, CAFM Excluded

Ex

ce

lle

nc

e a

nd

be

st

pra

cti

ce

in

itia

tive

s

Business systems innovation

Our best practice and knowledge sharing Defining and documenting knowledge

Example of cleaning best practices

SimISS planning and calculation system

Methodologies and work processes documented

· Resource Mgt

· Training &

Development

· Motivation

· Absence Mgt

· Employee Relations

· Employee Retention

People

Management

· Financial

· Quality of Service,

Product & Process

· Satisfaction

· Improvement &

Innovation

Performance

Measurement

& Reporting

· Contract Operations

Manual

· Record

Management

Business

Documentation

· Employee Surveys

· Customer Surveys

· Feedback Analysis

Satisfaction

Assessment

· Selection

Management

· Performance

Management

Supplier

Management

· Strategic & Tactical

Planning

· Alignment to

Customer Changes

· Realising Contract

Potential

Contract

Planning

& Review

· Relationship Mgt

· Contract Awareness

· Communication

· Problem Solving,

Performance &

Innovation

Contract

Retention

· Business Continuity

Planning

· Disaster Recovery

· Action Planning &

Testing

Business

Continuity

Management

· Service Definitions

· Service Levels

· Performance

Indicators

· Expectation

Management

· Organising for SLM

Service Level

Management

Co

re D

eliv

ery

Pro

cess

esP

lan

nin

g P

roce

sses

Su

pp

ort

Pro

cess

es

Added Value

&

Customer

Satisfaction

· Self Assessment

· Management

Process Audit

· Service Audit

Process

Compliance

· Record Management

· Exit Planning

· Knowledge Transfer

· Decommission of

Contract

Exit

Management

· Responsibility

· Communication &

Training

· Risk Management

· Improvement &

Initiatives

· Reporting

Safety, Health &

Environmental

Management

· Document Changes

· Maintain Contract

Framework

Contract

Change

Management

Customer

Requirements

Continuous

Improvement Management

· Facility Management

· Cleaning Services

· Office Support

· Property Services

· Catering Services

· Security Services

Service Delivery· Resource Planning – People, Consumables, Equipment, Tools

· Work Plans and Schedules

· Management Integration

· Delivery Integration

· Initiation

· Planning & Design

· Execution

· Monitoring & Control

· Completion

Workforce

Management

Project

Management

Integration

Se

rvic

e D

es

k

Service Desk

· Incident Mgt

· Service Request Mgt

· Complaint Mgt

· Notification Mgt

· Escalation Mgt

Trolley and materials

7

Process innovation

Service innovation

Example, Business Focused Maintenance

Full visual and “supply chain” review of engineering assets

Plant assessment from a business outcome rather than an engineering

system's perspective

Assessment and rating of consequence of failure, likelihood and time to

failure.

concentrating on single points of failure and effects to prioritise resources

Continuous review to identify the likelihood of failure and highlight items

deteriorating faster than normal

Application of maintenance levels based on these risk and consequence

ratings

Frequencies and degree of CBM, IL&C and PPM adjusted accordingly

MTBF and MTTR feedback included in forward fine-tuning

Actual Example

0

1000

2000

3000

4000

5000

60005547

29982578

4296

1445

2133

Example: Engineering System PPM Pilot Scheme Erskine 2010

Maimtenance Hours Planned

Maimtenance Hours BFM

010002000300040005000600070008000 7088

5997

2578

5876

4677

2133

Example: Engineering System Reactive Pilot Scheme Erskine 2010

Maimtenance Hours Reactive

Maimtenance Hours BFM Reactive

Example, Service Integration

ISS Workflow Planning Tool

Multi skilling or Same skilling ?

Based on PPM principle with focus on tasks on same skill level

Applies sensitivity to when tasks can be done

Brewing industry – Case Study

Hard savings 11% over traditional model

Soft savings – more full time employment

Reduced staff turnover

Reduced recruitment and training costs

More engaged employees – higher productivity

Building Business

•IN

TE

GR

AT

ED

S

OL

UT

ION

S

•SPACE & CLIMATE •Enhancing the productivity of your workforce.

Maximise Performance the next generation

•ENERGY SERVICES & MANAGEMENT •Maximising the energy efficiency of your operations.

•NATURAL RESOURCES & CARBON •Minimising the environmental footprint of your business.

•INFRASTRUCTURE & ASSETS •Optimising the whole life cycle value of your assets.

•INFORMATION & COMMUNICATIONS •Creating an “anytime, anywhere, any place” culture.

•Contract

•Scope Definitions (List of Services)

•Key Performance Indicators

•Performance Values (and method of measurement)

•Processes & Procedures

•Specifications

•Tools, Technology, Equipment and Materials

Customer

ISS

Cost &

Liability

Service

Delivery

Balance

Point

Components of Service Level Agreement

Tracking to joint results

Service Desk/CMMS Statistics, Audit, User Polls, Response Times (contracted measurement)

GRE Client Assessment – monthly, (contracted/governance)

User Groups / BU Managers , Audit & Guidance - bi-annual (governance)

User Satisfaction (survey) – annual (contracted, governance)

Criticality

Frequency/Time

ISS Global Corporate Clients Governance Model

Purpose Frequency

GLOBAL

REGION

COUNTRY

SITE Facility Managers, site based

support staff Site based Customer reps

Programme Managers, Account

Managers/FM (Divisional

Managers, Branch managers)

Regional & Country Programme

Managers

Country HSE, Account

Managers, FM

Country Programme/Category

Managers

Contract Management

Delivery & Compliance

Audit, Reporting

Contract Management

Delivery & Compliance

HSE, Eng. Mgrs., Programme

Managers, Reporting &

Benchmarking Managers

Global Head Ops/Procurement

/(CEO, CFO etc)

Global Programme Directors/

(Head of Procurement, Head of

Ops)

Regional Directors/ (Head of

Procurement, Head of Ops)


Managers


Managers

Group CEO, Regional CEO,

Group CCO, Head of CC

Head of CC, Global KAD

Programme Director &

Programme Managers/(IFS

Directors/Divisional Directors)

Regional KAD (Regional

CEO/Country Managers/IFS

Directors)

ISS Customer

Relationship/Strategy

ISS' Customer Governance Model

Strategy/Steering/Escalation

Steering/Escalation

Contract Management & Delivery

Delivery, Development & Compliance

Audit, Reporting

1-2 times/year

4 times/year

Monthly

Monthly

Monthly

Monthly

Monthly

Daily/Weekly

ISS Value Proposition as an integrator

Geographic Footprint - Country-based structure and local delivery

- Regional/global BD, Transition & Account management (Corporate Clients)

- Global and local collaborators (IVA-MAAS, MCS, Diversey, etc.)

Processes & Systems - Business Process Framework

- CC Process Playbook

- ISS Facility Management System

- Route-based systems

References - Segment experience

- Local and regional experience

Degree of Self Delivery - Ability to integrate

- Low system margin (no management & margin-on- management & margin)

- Knowledge sharing

Competitive Price - Integration & Synergies

- Service Excellence

- Strategic sourcing

- Leverage of international infrastructure

Business Critical Services - Technical & hard FM capability

- Datacenters

- Clean room

- Etc.

“Support” Functions - Change Management and Transition

capabilities

- In-country & regional/global EH&S capabilities

- Project management

- Centers of Excellence

- HR (staff transfer)

Global

Cleaning

ExcellenceOffice Support

Excellence

Property Services

Excellence

Catering

Excellence

Security

Excellence

Eastern Europe

CleaningOffice Support Property Services Catering Security

Nordic Asia & PacificWestern Europe & Americas

Central Europe

Global OSKnowledge Forum

Service ExcellenceTeams

Global PSKnowledge Forum

Global CateringKnowledge Forum

Global SecurityKnowledge Forum

Global CEKnowledge Forum





Regional

Country

Integrated Facility

Services Excellence

Global IFSKnowledge Forum

Integrated Facility Services

Centre of

Excellence

Global

Cleaning

ExcellenceOffice Support

Excellence

Property Services

Excellence

Catering

Excellence

Security

Excellence

Eastern Europe

CleaningOffice Support Property Services Catering Security

Nordic Asia & PacificWestern Europe & Americas

Central Europe

Global OSKnowledge Forum



Global PSKnowledge Forum

Global CateringKnowledge Forum

Global SecurityKnowledge Forum











Regional

Country

Integrated Facility

Services Excellence

Global IFSKnowledge Forum

Integrated Facility Services

Centre of

Excellence

Initial

15%

1st time outsourcing

100

85

Client

With ISS on an IFS

contract solution

9%

2nd time outsourcing

76

Client

with FM

Initial

15%

1st time outsourcing

100

85

Client

With ISS on an IFS

contract solution

9%

2nd time outsourcing

76

Client

with FM

Risk Transfer - Outsource delivery risk (insurance, price,

some EH&S)

- Increase flexibility

- Speed to change

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