Firstly, and at long last, I can finally satisfy your curiosity, World FM Day was a success! Still waiting on the date for World Purchasing day though!
In which case then, we can move onto the equally eagerly awaiting answers to questions such as “how does this fit within the approach of Category Management”? and “what are the options available to us”? Or how far do we want to go in moving from the sourcing of Facilities to Facility Management?
Given the emphasis Future Purchasing places on first class Category Management it’s a good start to understand how this sits within the context of the approach to success.
Depending on the type and nature of the client organization we are likely to be looking at between 5 and 10% of total expenditure coming within the broad heading of Facility spend. The more “Total”, the solution becomes, the greater will be the degree of outsourcing of what is currently classified as internal expenditure, and therefore the greater the spend.
Facilities Management may well be important enough to be considered as a Category Group (Level 1), or seen as a category (Level 2) with sub-categories such as Soft Services (Level 3) and sub sub-categories (Level 4) such as catering. In organizations we have worked at recently we’ve defined it depending on its impact to the business: so for one it was at Category Group Level including Construction so it was FM (including Construction) at Category Group level and in another it ended up as a Category within the Professional Services Category Group, and therefore would have been deemed as level 2.
Assuming Facilities Management is at Category Group (Level 1) then sub-Categories (level 3) in scope could include HR services, security, catering, cleaning and gardening. Property and asset maintenance, Fire services. Environmental, Financial and IT operations, indeed practically any non-core activity or category of spend. Sub sub-categories (level 4) may well depend on how the business/client defines it spend but for example Reception staff may be a subset of HR services, lift maintenance may be a specific subset within property.
This is an important consideration, because a poorly considered category hierarchy can lead the buyer down typical, or presupposed solutions, based on market offerings rather than business requirement.
So back to how to look at FM, and what are the initial options;
We will need to consider this against the objectives and compare with other potential solutions. Alternatives would include looking at each level 3 or level 4 on an individual and more conventional procurement basis. Choosing only to look at those elements, which are already outsourced, looking to improve the performance of existing suppliers or looking to resource and establish sources who are able to combine across level 3 or 4.
Alternatively we could consider looking at implementing solutions based on a geographical criteria, another recent client had a successful solution in place in South America using a supplier who was not able to service their facilities in Southern Africa. Insisting on a global supplier would have led to compromise, however using the same sourcing criteria and process to establish different supplies for the same solution could of course still be considered as global Category Management.
Considering a series of national or regional solutions also significantly increases the supplier selection options, there are perhaps 12-15 truly global players, but that is increased by many multiples if looking more locally.
Effectively FM can be complicated so I recommend following a distinct and rigorous
process. My 5 recommendations to you to help define the right strategy for your business
The great thing about a successful FM project, is that it can only be achieved,
if you use the same tools and techniques as in category management! And don’t assume
you know the answer until the data and analysis provides it!
When you’re ready, and have five positive answers, go for it, whichever outcome you achieve, it will be transformational!
Tagged by topic: Facilities Management
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