termpaper of om 2003

8/8/2019 Termpaper of OM 2003

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TERM PAPER ON

FACILITY

MANAGEMENT

2010

5/8/2010

SUBMITTED BY :NAME:=> IMRAN HUSSAINREG. NO.=> 10902893STREAM:=> M.B.A II sem.SECTION:=> RT1902A20

SUBMITTEDTO:

MISS.MANEETKAUR


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ContentsContents ............................................................................................................. 2

INTRODUCTION ........................................................................................................... 4

Technology of building automation ............................................................................. 6

Administrative vs. Technical Management ................................................................. 6

Theoretical framework for positioning FM ................................................................... 9

EMERGENCE OF FACILITY MANAGEMENT .............................................. .................... 11

OBJECTIVES ............................................................................................................... 14LITERACTURE OF REVIEW ............................................................ ............................. 15

Factors in positioning FM ................................................................... ....................... 17

Influences of contextual factors on FMPractice ......................................................... 19

Facility features ................................................................................................. ....... 20

The Cost of IT Facility Mismanagement .................................................................... 26

The Need to Control Facility Management ................................................................ 27

HOW HP IS USING FACILITY MANAGEMENT ............................................. .................. 28

CRITICAL ANALYSIS ........................................................................................... ........ 30BIBLIOGRAPHY .......................................................................................................... 31

ACKNOWLEDGEMENT2


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I feel immense pleasure to give the credit of myterm paper not to one person as this term paper isthe integrated effort of persons who are concerned

with it. I want to thanks all those individuals whoguided me to move on the track.

I would like to express my deep sense of gratitudeto MISS.MANEET KAUR under his guidance I amable to complete my term paper.

Last but not the least, I would thank all my friends,who giving their precious time and helped ne tocomplete my term paper on time.

8 th May2010

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INTRODUCTIONFacility management is an interdisciplinary field primarily devoted to the

maintenance and care of commercial or institutional buildings, such as hotels ,

resorts , schools , office complexes , sports arenas or convention centers . Duties may

include the care of air conditioning , electric power , plumbing and lighting systems;

cleaning ; decoration ; grounds keeping and security . Some or all of these duties can

be assisted by computer programs . These duties can be thought of as non-core or

support services, because they are not the primary business (taken in the broadest

sense of the word) of the owner organization.

It is the role of the facility management function (whether it is a separate

department or small team) to coordinate and oversee the safe, secure, and

environmentally-sound operations and maintenance of these assets in a cost

effective manner aimed at long-term preservation of the asset value, and also other

janitorial duties such as making sure the environment is properly cleaned and

sanitized for its tenants. In those cases where the operation of the facility directly

involves the occupants and/or customers of the owner organization, the satisfactory

delivery of facility-related services to these people will be an important

consideration too; hence, the term "end-user satisfaction" is often used both as a

goal and a measure of performance.

The term facility management is similar to property management although not

exactly the same. While both manage the day to day operations of a facility the

property such as cleaning, maintenance and security, similar to Janitors, one must

not confuse it with such a title. The property manager has an expanded role which

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http://en.wikipedia.org/wiki/Interdisciplinaryhttp://en.wikipedia.org/wiki/Hotelhttp://en.wikipedia.org/wiki/Resortshttp://en.wikipedia.org/wiki/Schoolhttp://en.wikipedia.org/wiki/Office_complexhttp://en.wikipedia.org/wiki/Sports_arenahttp://en.wikipedia.org/wiki/Convention_centerhttp://en.wikipedia.org/wiki/Air_conditioninghttp://en.wikipedia.org/wiki/Electric_powerhttp://en.wikipedia.org/wiki/Plumbinghttp://en.wikipedia.org/wiki/Lightinghttp://en.wikipedia.org/wiki/Cleaninghttp://en.wikipedia.org/wiki/Decorationhttp://en.wikipedia.org/wiki/Groundskeepinghttp://en.wikipedia.org/wiki/Securityhttp://en.wikipedia.org/wiki/CAFMhttp://en.wikipedia.org/wiki/Property_managementhttp://en.wikipedia.org/wiki/Interdisciplinaryhttp://en.wikipedia.org/wiki/Hotelhttp://en.wikipedia.org/wiki/Resortshttp://en.wikipedia.org/wiki/Schoolhttp://en.wikipedia.org/wiki/Office_complexhttp://en.wikipedia.org/wiki/Sports_arenahttp://en.wikipedia.org/wiki/Convention_centerhttp://en.wikipedia.org/wiki/Air_conditioninghttp://en.wikipedia.org/wiki/Electric_powerhttp://en.wikipedia.org/wiki/Plumbinghttp://en.wikipedia.org/wiki/Lightinghttp://en.wikipedia.org/wiki/Cleaninghttp://en.wikipedia.org/wiki/Decorationhttp://en.wikipedia.org/wiki/Groundskeepinghttp://en.wikipedia.org/wiki/Securityhttp://en.wikipedia.org/wiki/CAFMhttp://en.wikipedia.org/wiki/Property_management


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includes leasing and marketing activities whereas the facility manager role focuses

on existing tenants who usually are owner occupants. An important feature of

facility management is that it takes account of human needs of its tenants in the use

of buildings and other constructed facilities. These softer factors complement theharder factors associated with the maintenance and care of engineering services

installations.

According to Atkin and Brooks [1], an important concept in the facility management

field is that of outsourcing , where the owner enters into an arrangement with

external organizations to provide one or more services in preference to their being

provided through internal arrangements. The reasons for this action can vary,

including lack of in-house resources, lack of expertise and pressure to reduce costs.

Unfortunately, confusion can exist because of the close association that facility

management has with outsourcing. The two concepts are not synonymous; rather,

outsourcing is one means for providing facility-related services to the owner

organization.

Facility management is performed during the operational phase of a buildings life

cycle , which normally extends over many decades. As such, it will represent a

continuous process of service provision to support the owners core business and

one where improvement will be sought on a continuous basis. It is essential that

decision-making in the preceding design and construction phases is therefore

properly informed about operational requirements if the facility is to provide

optimal support to the owners business. In this connection, facility management

can be seen as an integral part of a coordinated and controlled process of design,

engineering, construction and operations. Where a facility is provided on a

turnkey basis, for example design-build-finance-operate ( DBFO ), the consortium

responsible for the delivery of the physical asset and then operating the core

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service will need to understand implicitly the day-to-day demands in managing that

facility. Under such arrangements typically public-private partnerships (PPP)

owner-operators must fully integrate operational thinking into early design

decision-making.

A major challenge facing facility owners is reducing demand for energy for

economic reasons, but also because energy consumption goes hand-in-hand with

carbon emissions . Reducing energy during the operational phase of a facility's life

similarly reduces carbon emissions. When considering that 30-40% of a country's

total carbon emissions is attributable to buildings and other constructed facilities, it

is clear that operations and, hence, facility management have a significant role to

play.

Technology of building automationAdministrative vs. Technical Management

The support of administrative facility management through information technology

is identified as Computer Aided Facility Management (CAFM ), Facilities

Management Systems, or Computerized Maintenance Management Systems.

The collection of monitoring and supervising devices, control and regulation

systems, and management-optimization facilities/mechanisms in buildings within

technical facility management are identified as Building Automation (BA). The

goal is to accomplish functional processes in the overall industry independently

(automatically), according to pre-adjusted values (parameters) or to simplify their

operation and monitoring. All sensors, actuators, control elements, users and other

technical devices in the building are interconnected in a network.

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Workflows/sequences can be summarized in scenarios. Characteristic feature is the

decentralized structure of control units (DDC) as well as the integrated networking

via a bus system (usually EIB/KNX or illumination (DALI))

Movement to technical management has been rapid in some industries while other

industries still rely on the antiquated administrative approach. Industries with more

linear structures and processes typically are more inclined to implement technical

systems because ongoing management of these systems can be maintained by a top

down organizational structure. Industries that are not as linear have tended to be

slow adopters of technical management because of the belief that the system cannot

be implemented or maintained effectively. Industries like commercial office and

retail often tend to have the most challenges in implementing and maintaining

technical systems because their organizations reflect a great deal of diversity with

owners, brokers, managers, and tenants typically being from different organizations

with disparate interest and priorities. Recent trends have shown a dramatic increase

in the use of technical management largely due to research demonstrating the

tremendous cost savings of converting to the technical approach. In addition,technical management providers who are capable of matching the organization's

processes, constituencies, and provide comprehensive setup and maintenance

support throughout the life of the system have delivered significant advantages and

reduce the number of early project terminations and underutilized or "orphaned"

systems

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Components of best in class systems may include:

Certificate of Insurance Incident Tracking Project Management Preventive Maintenance Automated & Mass Communications Visitor Access Security Fire & Life Safety Accounting

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Theoretical framework for

positioning FMThe main idea of this paper is that the position of FM should not simply be decided

by the generic building technical ervice assumption, intuitive or common practices

from other buildings. Rather, selecting the position of FM requires a systematic

framework and decision tool which address the multiple factors in holistic

approach. Positioning FM refers to the process of identifying FM roles, function

and scope of FM in relations to the organisations fundamentals, i.e. core process,

support activities, nature and contexts, and external environment including local

culture, law and regulations, economy, and market. This paper proposes a

theoretical framework for positioning FM. The framework aims to provide facility

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managers with a structural framework for identifying profile of FM practice that

fits to the context of organisation, and to assist the organisation in making

decisions concerning FM arrangement. The theoretical framework for positioning

FM shown in the Figure 3 is based on the concept that FM function and positionshould link to the core business through the facility demand-supply model. The

framework adopts a stepped approach. The features of facilities and organisations

operation process are identified in the first stage of the framework to identify the

scope of support services required for the organisation. To identify the criticality of

the facility, the relative significance of facility to the core operations is analysed.

FM policy and strategy including service delivery method should be formed and

selected based on the levels of criticality and tolerance. Both internal and external

factors are the key inputs and criteria for the decision-making throughout the

process. Once these fundamental issues are identified, the profile of FM including

function, role scope, organizational structure, level of authority, performance

measurement policy, can be projected or selected. To cope with the dynamic, the

Implementation of periodic reviews is included at the end of the process. As a part

of PhD research, the framework will be verified for its validity and practical

applicability in the further stage. In order to prove the applications of the

framework, a serial case studies research has been conducted. Theoretical

framework for positioning FM Positioning facility management. The decision

method and tools for positioning FM will be developed based on the refined

framework.

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EMERGENCE OF FACILITY MANAGEMENT

Determining the history of Facilities Management (FM) is as challenging as

defining the discipline itself. As no one can criticise me for leaving anything out.

Most people think that FM started in the late 1970s.

4000 1000 BC

The first civilisations and cities emerged from around 4000 to 3500 BC in

Mesopotamia. The emergence of social organisation coped with the complexities

of administration, the production and exchange of goods, expeditions and defence

of territory. Here we can find evidence of FACILITIES such as major public

buildings, stores of agricultural products, and workshops for manufacturing

activity. Where was BIFM and IFMA while all this was going on? Lets just say

they were late starters! So from the very beginning we have Economy, Politics and

Culture.

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While the cities in Mesopotamia were the first, they were soon followed in 3000

BC with similar civilisations in Egypt, the Indus Valley (Pakistan and North West

India) and by 2000 in China and then the Americas (Mexico and Peru) around 1000

BC. Also, around 1000 BC we have the Iron Age. To archaeologists andhistorians, this is the single most important mark of the advance of mankind both

technologically and culturally.

1001 0 BC

By about 600 BC Greek merchants had sophisticated trade routes and practice

with truly international expansion. Countries are trading with countries around the

Mediterranean Sea. We see the introduction of coined money. In the 5th century

BC Athens was the most densely populated State in the Ancient World with about

a quarter of a million people. About one third of these were slaves mostly

working for facilities management contractors! But this period is relevant not only

for the commercial dawning.

1 1000 AD

The Monty Python team posed many big questions, such as: What did the Romans

ever do for us? A few years ago a presenter of BBC TV history programmes,

Adam Hart-Davis, spoke at the BIFM Conference and presented What the

Romans did for us. Well, what did the Romans do for FM?

They brought us unprecedented feats of engineering and atria! And with no

electronics orglass they were much easier to look after. From the 8th century on,

the significant Treaty of Verdun (note the French connection) established wholly

new States in Europe with a huge growth in the economies thus paving the way

for EuroFM a late-comer to the FM party!

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1001 1975 AD

Moving swiftly on - into the last millennium Probably the most significant event

in this period was the creation of what must be the mother of all Asset Registers

The Domesday Book. In 1086 King William I ordered a survey of the whole of

England and a census of every horse, cow, pig and hen, bringing about the

overhaul of land tenure, crown estate and TAXATION! The structure of the data

was impressive providing William the Conqueror with a reliable reference system.

As you might guess there was no appeal process the assessors view was final and

binding and it was recorded in a short form of Latin, so not understandable tomany much like the M&E asset registers we see today! Perhaps the most famous

Facilities Manager round the turn of the 17th Century was Samuel Pepys! Pepys

submitted detailed incident reports of the Great Plague and the Great Fire of

London. Pity he didnt think of doing a risk assessment first! He was a Facilities

Manager of the first order. Through sheer hard work and incredible talent for

administration he rose to be the Chief Secretary to the Admiralty and his reforms

are regarded as important to the professionalization of the English Navy. (Pepys

also liked to receive an occasional case of Port for his procurement favours!)

1976 2009 AD

And so we come to the modern history of Facilities Management only 30 years or

so ontop of the 6,000 years we have just cantered through. The one person I must

mention, who I still see occasionally in America, is George Graves. In the 1970s

George took the initiative to meet with fellow office administrators from other

companies in Houston to share business issues and problems, and those meetings

led to the establishment of IFMA and the rest is, and will be, history!

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Marshall McLuhan, the Canadian educator & philosopher, is famous for describing

in the late 60s how technology has contracted the globe into a village. The Global

Village has come to pass! As a result, people all around the world have anexpectation that their quality of life should improve. In FM terms, technology now

enables us to measure and attribute cost and use of assets and resources, in real

time anywhere in the world.

OBJECTIVES1) To identify the factors in positioning Facility Managementand their

influence on Facility Management practices.

2) To study the use of IT Facility management, the cost of IT Facility Mis-

management.

3) To identify the need to control of Facility Management.

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LITERACTURE OF REVIEW

Linda Thomas (1986) It is necessary to identify the appropriate location,

shape, size and building systems and furniture for the creation of a successful

office building but it is not sufficient he way in which the physical resources of

the office facility are managed after initial occupancy is critical, the four types of

survey organization, information technology, design strategies and facilities

management and the organization profiles by which facilities managers could

first identify and then rate their own organizations performance .D.

Fritsch(1994) The evaluation process of existing systems is still in progress andCAFM computer aided facility management) systems are still being developed. All

these systems have to handle the problem of geometrical dimensions. Most of the

systems represent databases only without any spatial link. The first step in order to

get an operational Building Information System is to examine the requirements of

the potential users. We created a questionnaire that helps us to examine the task

stock/requirements of the users . It was sent to a group of employees who were

selected as a key group. In addition interviews were taken to maximize the

feedback rate and quality of answers.Secondly a market study is undertaken to get

an overview of possible system candidates. In the meantime we sort all

questionnaires by different criteria such as workflow, main topics, analyses with

time, 2D, 3D and simple database queries. After the sorting we get an overview

about the relevant criteria that help us selecting the appropriate system. Dennis

Kniery ( 1999) Hewlett-Packard Company (HP) began the reinvention of the

entire company to provide an infrastructure which would respond to the demands

of an ever-changing industry. This paper presents an in-depth case study of the

successful partnership between HPs US Field Sales Office Facility Maintenance

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support team and Trammell Crow Corporate Services. The initial goal was to

achieve a more efficient method of managing facility operations and

maintenance.HP created the programme focus, touch points, processes and

strategies. What happened was a complete reinvention of the methods that HP usesto accomplish facility support. While traditional maintenance models will always

have their place inindustry, this case study provides evidence that there are

incrediblebenefits available for those industries that have the courage tochange in

radical ways. Sarich Chotipanich(2004) This paper pointed out the importance of

fitting FM practice with particular characteristics and environments of the

organisation. It explained thesignificance of organizational factors and local

contexts in FM practice and arrangement. The case-specific nature of FM practice

has been emphasised here. It makes a case that the selection of FM practice and

arrangement should be based on these key factors, rather than adopting standard or

best practice FM. Blending the generic FM principles and concepts to the

specific contexts is crucial. FM practitioners should pay attention to the balance of

the generic framework and the specific issues by taking contingency approach. JIM

FLOYD(2005) As people work through their daily lives, they interact with a

variety of organizations. Some of those interactions are successful, and others are

dreadful. And managers of organizations tend to look at their own organizational

successes and failures and hope that the successes outnumber the failures.

Managers observe that most of the successes come from the highest performing

employees, and the failures tend to emanate from the worst performers. So, they try

to encourage the worst performers to become better team players or be moresensitive to the customers needs, and hope that they eventually get it. Some

will, and most will not. And then one day, a manager interacts with an organization

that goes the extra mile and provides a great service or product, and he/she

fantasizes about what it is that makes this organization.

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Factors in positioning FM

To adopt the contingency approach into FMpractice arrangement, it is necessary to

identify keyfactors concerning FM practice. The factors of Cluster of support

servicesPositioning facility managementSarich ChotipanichLee (2002) indicates

three important factorsinfluencing FM practice including organisations

objectives, core business needs, and source ofvalue. Nutt (2002a) identifies key

factors related toFM practice including facility type/facility sector,stakeholder,

market context, cultural andcontextual issues. Schindler (1998) notes thatthere are

a few factors that affect the approach oforganisation concerning FM provision,

which areculture and objectives of organisation, physicalsize of the organisation,

characteristics andactivities, of FM functions within managementhierarchy.Cotts

(1999) notifies four factors, which are sizeof organisation, size and location of

facilities,ownership right over the facilities, and controlissues, that affect the

structure of FM practice ofan organisation and position of facility manager.He also

argues that either small or largeorganisation facility managers must performthe

same basic functions to their companies.The facilities department must reflect the

needsof the parent organisation.Bennett (2000) identifies six critical factors in

positioning support services for an organisation.The factors include operation

process, logistical relationship with primary operation, supportservice products,

resourcing of the operations,control, and coordination with organisationstructure.Hinks (2002) underlies many importantfactors in aligning FM with organisations

corebusiness including external factors such asbusiness climate, business needs and

priorities,organizational situation/circumstance: upsize ordownsize, diversify,

restructure, and scope andlimitations of your facilities.Krumm et al. (1996, 1998)

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identifies severalfactors that can influence the position of real estateand FM

functions such as business processes,structure of organisation, size of physical

asset,validity of the physical asset to the organisation,and organisation plan. They

also notify that thechanges within the business processes, and inthe structure of corporations, have consequencesfor the position and role of the support staffand for

the alignment of corporate physical assets.Barrett (1995) highlights key factors

influencingfacilities department organising. They include thesize of the

organisation, the location of site, scopeof support services, the conception of

organisation,the choice of service provision, background offacilities personnel, and

external influences such aslegislation, techniques, knowledge, and externalcontacts

with contractors.Based on the above views, the key factors in FMpractice can be

categorised into two groups:(1) internal factors including

organizationalcharacteristics, facility features, and businesssector; and(2) external

factors including economic, social,environment, legislation and regulation,

FMmarket context, and local culture and context.

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Influences of contextual factors onFMPractice

In order to establish an appropriate arrangementof FM, it is essential to understandhow the factorsaffect FM practice. Four key factors are analysedin this

section.Organizational characteristicsCharacteristic of an organisation has the

majorinfluence on the needs on facilities and supportservices of each organisation.

Atkin and Brooks(2000) and Stephens (1994) notify that evenwithin the same

business sector, each organisationis likely to have different needs in facilities and

FMfunction. The characteristics or natures of theorganisation reflect its business

objectives,operation process, and the organizational culture.They influence the

organisations needs andmanagement method of its facilities. Kennedy(1996)

suggests that the extent of scope of supportservices under FM depends on how

theorganisation has evolved in its allocation ofmanagerial responsibilities, as well

as its particularneeds and requirements of the organisation.The support services can

be given priorityaccording to the role they play in support of keybusiness

activities.The goal, priority and role of FM are likely tovary by the particular

characteristic of theorganisation due to many factors such asorganisations goals,

characteristics, constraints,operation process and so on. It is essential toFM

practitioners to recognise and address thecharacteristic of organisation

specifically.In addition, the characteristic of an organisationshould be addressed

from time to time because theorganizational objectives and characteristics can

beshifted or changed by business cycle and externalenvironment (Lee, 2002).Nuttnotices that it should be expected that FMwill serve the organisation differently at

differentstages in its life-cycle. In the stable periods, theFMfunction is to secure the

routine operations. Sooperational management and maintenance arelikely to be the

dominant function during stableperiods. But in unstable periods, i.e.

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organisationexpansion, restructuring, or attempting to enternew markets, or

expanding the business, FM canbe a key strategic function in reducing risks

andgaining advantages for the organisation on facilityresources issues (Nutt,

2002a). Planning, strategicdecisions and contingency arrangements arerequired inthese unstable periods. In this case,FM should be able to contribute to developing

thecompetitive advantage of the firm (de Valence,2004).FM can be required

differently in relation tobusiness conditions. Hinks (2002) argues that FMfunction

can differ for the same organisation whenit operates in different business scenarios.

He findsthat organisations in stable business, which refersto a business operating in

a broadly unchangingstate, may require stable business support services.FM

function may provide best value for thebusiness by being stable. Differently,

organisationsin dynamic business may require an agile supportservice to allow it to

adapt quickly. FMfunction inthis situation needs to be more responsive

andproactive than the one in the former situation is.The strategic tasks of FM

function seem to occurand vary from time to time.

Facility features

Facility is normally designed or selected based onthe needs of the operation

processes of theorganisation. The features of facility normallyreflect the specific

needs of occupying organisationand occupants. Facility can differ by many

aspectssuch as building type, architectural design, andbuilding engineering

systems, scale of thefacility, location, and ownership on the facility.The physical

features of facility cause differencesin approach and methods to FM and should bea

primary concern of facility manager. It shouldbe reviewed, selected and operated in

an efficientmanner which addresses the needs of thebusinesses (McGregor,

2000).Business sectorBusiness sector has also been regarded as a criticalissue in

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FM practice. It is a majorfactor in selecting facility and support servicesneeded.

Type of business affects operationprocesses of organisation, in turn influences on

theneed of facility. According to operationsmanagement literature, different

operationprocesses require different transformationsituations and facilities(Harrison, 1993; Slacket al., 1998; Adam and Ebert, 1992).Grimm (1994) notes

that in some industries thesupport functions attract little attention. In otherindustrial

sectors, the support services mightsignify a crucial operational element in the

successof that company. Role and function of facility andsupport services,

therefore, vary by fundamental ofthe business environment that organisation

islocated. Some business sectors, such as hotel,commercial mixed-use, and leisure,

are muchmore facility-based than others.Price notices that facility services will be

foundimportant, where customer impact of the facility ishigh (Price, 2004). In turn,

business sector hasconsiderable influence on prioritising FMpurpose, function, and

roles and responsibilities.For instance, maintenance function seems to becrucial to

facilities and organisations that have highoperational risk of failure, e.g. acute

hospital andnuclear plant. In other businesses, the conditionsof facility resource can

be important to university.Whilst quality of facility services is important

tobusinesses, where the customer impact isimmediate, such as retail sites and

hospital.McLennan (2004) notes that business sector is akey factor determining the

criticality of facility tocore operations. He also suggests that FM practiceshould

also be tailored to meet the particular needsof the business sector.Culture and

contextWhile FMhas recently become a normal practicearound the world, cultural

issues and contextualfactors have come to the notice of FM practitionersespeciallythose whowork or implement the practiceoutside USA and UK.Wong (2000)

indicates thatthe culture influence on FMpractice in Asia in termsof standard,

perception, and quality.He pointed thatthe differences in conditions and

specifications offacilities, standards, costs, and culture can affectFMpractice, and

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also emphasised thatFMpractitionersneed to be sensitive on cultural issues. For

instance,Southeast Asian countries seem to have lowerstandards compared to those

of the UK and USA,due to their economic capacity and culturaltolerance as well as

local preference.Different capacities and conditions of FMmarkets in differentcountries can be found.The capacity of FM market in terms of servicesavailability,

supplier capability, and availabletechnology can affect the decision-making

andchoice of service delivery method.These cultural, legal, environmental,

economicand social contexts would also give rise to differentsets of national and

regional priorities concerningFM practice and arrangement (Nutt, 2002a).They are

important issues of the FM practice. FMpractices in different countries should be

adoptedand adjusted differently in respect to preference,belief, value, local contexts

and paradigm,standard and local practice.Organizational needs on facility and FM

reflectthe influences of the internal and external factors.These factors affect the

decision-making, choice,priority, and constraints of organisationconcerning FM

practice. They are interrelated,and can influence each other hypothetical

relationships and influences of theinternal and external factors to FM

practice.Aligning/linking FM to the organisationThe idea of linking FMto the core

business of theorganisation is common and has been emphasisedbymany authors

(Alexander, 1994; Krummet. al.,1996; Barrett, 1995; Then, 1999, 2003;

Thomson,1990). Stephens (1994) emphasises that positioningfacilities and

facilities organisation to fit with theorganisation context is crucial toFMpractice

and toits contributions to the core operations.FMfunctionneeds to find an

appropriate position that fits to theparticular organisation, local culture andcontexts tosupport and serve the core process of theorganisation effectively.

Stephens points out thatunder-positioning FMfunction seems to limit itspotential to

support and provide positive responsesto the organisations key values and success.

On theother hand, over-positioned FM function may resultin redundancy of work

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process and inefficientresource utilisation. The proper position of the FMfunction

will enable the FMfunction withappropriate delegation and authority to provide

theright environment for the organisations corebusiness, which results in effective

resourcemanagement and provision either in long- orshort-term.It is clear from theliterature review that manyauthors believe that aligning FM function to thecore

business of an organisation is a crucialconcern. Bennett (2000) emphasises the

need ofdeveloping and further study on strategicframework for positioning support

services.Then (2003) stresses the need for framework tointegrate business resource

management with theprovision and management of the corporateoperational assets,

and associated facilities supportservices, in their business settings.Many have

suggested framework for linking FMto the core operations. Barrett (1995, 2000)has

developed a generic model of FM practicethat describes the linkage between the

facilitydepartment and the core business and the externalenvironment. The model

suggests that FMfunction should interact with the core business atthe operational

level by meeting the current needsof every department on a regular basis, and in

thestrategic level by scanning for possibledevelopment within FM arena as a

response to theexternal environment and future business change.He suggests that

the key in linking FM to the corebusiness is a two-way communication between

theorganisation and FM practice group.Lee (2002) suggests that FM practice can

belinked to the core business through a valuetree model, in the model, the linkage

to the corebusiness is through key business issues such as customer satisfaction,

business continuity,operating efficiency, and the organisations keyobjectives such

as income maximisation,minimising risk with optimum costs. FM needstounderstand the core business needs, the source ofcompetitive advantage or value,

and to identifywhat is critical to the business, its customer andstakeholder value.

FM must be aware of thebusiness objectives, the nature of products and/orservices,

the processes to achieve them and plansfor future growth and development. There

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is aneed of clarity in the requirements for FM andsupport service. To be of

strategic relevance FMmust align itself close to the core business needsand close

the gap between the businessdemands and the delivery of facility

solutions(Loosemore, 2004).Atkin and Brooks (2000) have developed amodel thatidentifies the basic relationshipbetween core and non-core business with linkageto

the core business based on business strategy,innovation strategy, capital,

customers, markets,and the organisations management structure.Then (1999,

2003) proposes a conceptualframework for integrating FM service withstrategic

business planning and operational assetmanagement, the so-called integrated

resourcemanagement framework. His integratingframework for FM is built on the

creation of acontinuous dialogue between the strategicmanagement of core

business development andthe operational management of business resources.It

aims to put an appropriate physical resourcestructure in place that matches demand

withappropriate support strategies. Then also stressesthe crucial relationship

between strategic decisionrelating to facilities provision driven by corebusiness

drivers, and tactical-operational decisionsrelating to support services provision and

theirmanagement within the real estate portfolio.The model also takes account of

external realestate market dynamics in relation to resourceallocation of the

organisation.Although a number of general conceptualframeworks for linking FM

functions to theorganisation have been identified, however, thereare still gaps that

need to be filled. First, thosegeneral frameworks have still uncoveredoperational

linkage with the routine requirementsof organisation on facility. The existing

frameworksmust focus on linking FM function to the corebusiness in strategiclevel. Arguably, FMis asupport function that should be capable ofsupporting both

core business operations and othersupport units. Second, the available

approachesand frameworks tend to focus and prioritise on theinternal factors. Most

of them there, haveundervalued the importance of the external issuessuch as

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economic, social and culture, climate andconditions, legal context, and FM market

whichaffect FM practice both directly and indirectly asidentified In an age where

computers shape business performance and can represent almost one-third of

capital costs, no company can afford to underachieve through underutilization of itsIT resources. The fact that companies are annually losing billions of pounds by

failing to control and optimize one of their biggest resources has got to be a critical

IT facilities management concern. The question is: why are FMs continuing to

ignore the problem? Worse still, why are they letting IT departments call the shots?

The dangers of putting IT departments in the drivers seat were neatly summed up

by top international computer systems consultant, Too many IT departments

continue to provide the level of service that they imagine the business community

require rather than provide the levels that the business community actually wants.

They provide a service based upon the imagination of IT and not the reality

required by users. His comments at the time were levelled at the results of a recent

survey of Help Desks in Britain and the US, which showed that 80 per cent had

been established without consulting departmental managers! But why push all the

blame on the poor engineers? Surely, as the person ultimately responsible for the

provision of in-house facilities to management, FMs must be ultimately responsible

for driving their customers requirement.

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The Cost of IT Facility Mismanagement

IT facilities management is undoubtedly the mostcritical cost issue facing

businesses today. One ofthe most obvious but also most neglected areas isjust

keeping track of what assets are available.Here FMs have a major role to play in

controllingthe vast array of small, expensive and portablepieces of computer

equipment in the workplace.The scope of this asset management problem ishuge

and the costs continue to rise dramatically.This year more than half of British

industrys10bn asset mismanagement bill will go intosupporting rocketing IT

costs. According to arecent survey carried out by the DTI, ICL and theNationalComputer Centre, theft and softwarevirus-related security breaches will exceed

1.2bnin 1994. The Association of British Insurers(ABI) also estimate computer

claims on lost orstolen equipment will rise by 50 per cent by yearend. Since 1991,

they have more than doubled.Added to this, the ABI say that companies

whoserecords show that they are unable to keep track oftheir assets can expect to

pay significantly higherinsurance premiums based on the increased levelof risk the

insurer has to take.While computers have revolutionized theworkplace, figures like

these certainly suggestthat they have done little to improve themanagement

systems and procedures whichcontrol them. Few companies today havecentrally

integrated and computerized assetmanagement systems which effectively

trackcostly and transient equipment at work and in thefield. Fixed asset

management has not kept upwith the computer revolution. For a start, fewassets

with the exception of buildings andmainframes are fixed these days. So what

haveFMs been doing to safeguard what probably istheir organizations most

important resource?Why are so many companies still working in theDark Ages on

paper-based asset management,performing depreciation calculations onequipment

they cannot find? This is theInformation Age, we now have the

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mosteffectively met within the available budget. Thesystem must also be flexible to

customer needs

(Accountants will require financial information,security people want to know what

is missing,purchasing may want order processingdetails, etc.).While FMs mustinvolve departmental heads atthe planning stage to clarify the main

systeminformation objectives, no system is going towork if it is designed by

committee. The role ofthe FM will be to streamline these objectives intoa single

and integrated workable solution which iscost effective, time efficient and,

mostimportantly, accurate, reliable and user friendly.Usefulness will also depend

on whether businessmanagers are provided with across-the-boardpolicies and

procedures for updating, managingand maintaining asset information on the

system.

HOW HP IS USING FACILITY MANAGEMENT

In the spring of 1999, the entire organisation was broken up into discrete elements.

The facilitymanagement (FM) functions were then reassembled into three key

functions: Facility Planning, Facility Delivery and Facility Maintenance. The FM

function faced the following challenges:

The FM support came primarily from local office personnel.

The FM needs required 137 on-site employees plus the part-time contributions

of many others.

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Repair and maintenance spending exceeded $16m/year on vendor services

supporting 209 offices housing approximately 15,000 employees.

The spin-off of Agilent Technologies would represent approximately 30 per

cent of HP. The offices were a hybrid of 18 owned, 80 full service and 111 triple-net leases.

The Agilent separation and the transition to the Next

Generation Workplace would result in reducing US office space by more than 44

per cent from 3.6m square feet to approximately 2m square feet.

The vision of the HP leaders and their apparent confidence in the FM staff

capabilities suggested a staffing model smaller than any performing the task could

imagine. A turning point was reached when the Work Place Solutions manager

asked: If your staff were reduced by 96 per cent to 6 people, how would you

manage the FM program? With this new question, the focus shifted to address

needs to support the future vision instead of coming up with reasons why it could

not be done. A business fundamental was revisited: Begin with the end in mind or

If you are getting what seems to be the wrong answer, maybe you are asking the

wrong question. With enthusiasm to accomplish something great and

apprehension of venturing to unexplored places, the FM team was formed and

began to meet several immediate challenges:

The restructuring of employee responsibilities would be instantaneous.

FM was the first program in HP to convert its support from the traditional local

support to completely remote.

There was neither trail to follow nor any data to support optimism. There were no external models to copy (There were no rules for how it would

work. No roadmap. No infrastructure to guide the evolution. Questions had to be

approached from the desired results standpoint. This was critical to the success of

HPs programme transition.)

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The organisation was faced with continuing the implementation of the Y2K

remediation initiatives already under way. If the organisation face the need for

radical FM restructuring, consider doing it sooner than later. One of the big

benefits of this structure for HP was that it liberated over 300 employees to focuson supporting other functions essential to HPs reinvention success without being

distracted by maintenance issues. The HP FM transition began in May, 1999.

When one considers todays challenging business climate, it is most comforting to

know that so many transition steps are already completed.

CRITICAL ANALYSIS

This study pointed out the importance of fitting FM practice with particular

characteristics and environments of the organisation. It explained the significance

of organizational factors and local contexts in FM practice and arrangement.

It makes a case that the selection of FM practice and arrangement should be based

on these key factors, rather than adopting standard or best practice FM. Blendingthe generic FM principles and concepts to the specific contexts is crucial. FM

practitioners should pay attention to the balance of the generic framework and the

specific issues by taking contingency approach. The review of a number of

literatures found several key factors related toFMpractice, including organisations

characteristics, facility features, business sector, and environmental factors. These

factors construct the constraints to and the criteria for FM practice and decision-

making. Hence, establishing FM practice should be concerned with both internal

and external factors. Since the factors are interrelated, positioning FM should take

a holistic approach. This study reviewed the availableFMpositioning frameworks.

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It identified the major gaps remaining to be filled. Finally, this paper proposes a

theoretical framework for positioning FM.

The systematic framework adopts a holistic view and a stepped approach to assist

the organisation and facility in selecting an appropriate FM arrangement based onits internal and external factors.

BIBLIOGRAPHY

www.emeraldinsight.com

www.ssrn.com

www.proquest.umi/login.com

[email protected]

www.iiqp.uwaterloo.ca/archive/RR-01--08 www.web2.concordia.ca/facilitymanagement/tools/pdf . www.mcgill.ca/files/models.pdf
http://www.emeraldinsight.com/http://www.ssrn.com/http://www.proquest.umi/login.commailto:[email protected]://www.iiqp.uwaterloo.ca/archive/RR-01--08http://www.web2.concordia.ca/facilitymanagement/tools/pdfhttp://www.mcgill.ca/files/models.pdfhttp://www.emeraldinsight.com/http://www.ssrn.com/http://www.proquest.umi/login.commailto:[email protected]://www.iiqp.uwaterloo.ca/archive/RR-01--08http://www.web2.concordia.ca/facilitymanagement/tools/pdfhttp://www.mcgill.ca/files/models.pdf

termpaper of om 2003

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