Proving VFM in FM a tough task

12 June 2013

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12 June 2013 | Rebecca Ellinor

Proving value for money when buying facilities management (FM) services is one of the toughest challenges facing experts in the field.

At a roundtable debate in London yesterday, hosted by SM and sister publication FM World in association with Office Depot, FM and procurement practitioners and consultants discussed the areas affecting the two professions.

Andrew Lofty, head of construction, sourcing and supplier relationship management at Carphone Warehouse, said it was about finding ways of extracting value through innovation not only in the first year of a contract but carrying it throughout a three-to-five-year relationship.

Hannah O’Reilly, category manager (FM, refrigeration & transactional sourcing) procurement at Sainsbury's Supermarkets, who echoed sentiments on the service-value-cost conundrum, added: “Another challenge is how do you differentiate between suppliers who are all talking the same talk and delivering the same services in the total facilities management [TFM] world we’re operating in today?”

Richard Warner, commercial director at Cushman & Wakefield FM, said he believed the most significant issue is preventing FM from being commodity and price-focused and putting value back into FM service delivery. John Bowen, consultant at Gulf Haven who works in procurement and FM, agreed the biggest challenge was about getting value from what’s provided and linking it to business objectives.

Head of FM consulting at Davis Langdon, Craig Little, concurred it was essential to ensure arrangements were aligned with the overall needs of the organisation. “And once the contract is in place,” he added, “you must ensure continuous improvement is built into those deals and collaboration works as it should.” And Qusharat Hussain, commercial director, Servateam, agreed the chief challenge was to demonstrate value for money.

Paul Crilly, managing director of Not Just Cleaning, said he saw the key issue as “chronic mistrust” throughout the industry. “This is inside customer CRE [corporate real estate] and FM groups and between procurement functions and FM. It’s a reputation the supplier industry has probably earned over time, but it is an issue.”

Capita principal consultant and subject matter expert for FM, Marcus Hill, raised the challenge of engagement with the true stakeholders in the organisation. “There tends to be many that have ‘wants’ as opposed to identifying those that actually have true ‘needs’, so it’s trying to articulate between the two. The other issue is the whole procurement function’s still very process-led. I’m amazed at some of the PQQ documents I have been asked to put together that have fundamental questions like 'are you VAT registered?' and ‘have you got insurance?’ Some questions are irrelevant and the PQQ process focuses on the wrong areas. There’s too much emphasis on box-ticking and not enough emphasis on value, service quality and innovation.”

Jon Hickey, procurement manager at Office Depot, who heads up indirects for UK and Ireland, said moving away from being seen as a process-driven function to being recognised for the commercial benefit and skill set it brings was the chief challenge for FM procurement. And Jason Wakefield, procurement manager at UPP Residential Services, said the key challenge was to ensure more of a collaborative approach in terms of specifying what is actually required.

Colin Caulfield, chief operating officer for TFM services at Cleanevent Group, said the biggest issue was providing quality services against the tough economic backdrop. “Sometimes contracts are so hard to deliver you both (client and service provider) suffer as a result of tough financial tendering.” 

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