Positively impacting the bottom line and generating long-term value within large businesses continues to be a major challenge for the real estate and facilities management (FM) sector. Handling assets in an intelligent manner offers a simple way to tackle this issue, but where do facility managers (fms) start?
The answer to this question is simple: they can begin with asset related data. Speedy access to accurate data around property portfolios and how they are managed, monitored, and used is at the heart of smart asset management.
Key Business Processes
One of the first steps to this approach is an examination of the core processes of FM. This exercise permits fms to think about situations where key data exchanges occur, which then reveals the tools available to help them tackle the process.
Essentially, there are five pillars to the basics of the FM process.
- Real estate management. This part incorporates portfolio planning, transaction management (the consolidation of sites or the lease, sale, or purchase of property, optimizing or getting rid of space), and contract management (i.e. lease administration and accounting).
- Capital projects and project management. This aspect of the process involves working out the cost schedule and qualifying the nature of the project. Scenarios where this applies can include where land has been purchased and now a building is being constructed; a business is moving into a space and adapting it to the specific needs of the organization; or equipment is being replaced in a building. The goal is to complete the projects at or below the estimated cost and on time—the sooner the space is filled, functional, and effectively used the sooner revenue can be generated from the facility.
- Facility management/space management. Once the facility has been purchased, the owner and fm will need to move in people. This involves generating move orders and deciding exactly who and what goes where.
The effective and efficient management and use of space is critical to saving money and optimizing the opportunity to create value. The occupants then arrive and start asking for copiers, printers, paper, and other office necessities. This all involves the creation of work orders and the exchange of data.
- Facilities maintenance and operations. This part of the business involves the assessment and periodic evaluation of facility conditions. Any deficiencies identified will need to be fixed. Reporting, action, and completion of this process require the effective exchange of consistently formatted data.
- Energy and environmental management. With the increased focus on sustainability and the environment, the efficient management of resources is vital. FM is attempting to reduce energy use, carbon emissions, waste, and water consumption wherever possible. [For more on this subject, see “Sustainable Water Management."] Understanding what is being used and created is the first step towards change.
One Big Data Exchange Headache
Huge challenges surround the efficient exchange of data throughout these core FM business processes across the facility life cycle. This is especially true when professionals are managing a portfolio that may include hundreds of facilities. Not only does each individual process involve a complex set of data gathering and sharing maneuvers, but all of the processes are closely interconnected.
For example, a finance department has an issue on its floor and in order to get the problem resolved, a work order is generated. This will require a system or a person in place that can find out exactly which department is responsible. In another scenario, a maintenance person sees particular piece of equipment worn out and reports a deficiency. This will involve capital planning for the replacement of the equipment.
Add to this the need to work with multiple internal and external service providers (e.g. work management service providers), possibly in different countries, using their own systems, and a fairly daunting picture is painted. [For more on how one corporate giant dealt with this challenge, see “Centralization Case Study: Nokia."]
Centralization Case Study: Nokia
At one time, Nokia had in place 65 separate systems and database tools to support its five core business processes (real estate, capital projects, facility/space, facilities maintenance, and energy/environmental management). The organization was broken down into decentralized siloed operations, which translated into very high facilities costs as well as high carbon emissions associated with 402 locations (totaling 17 million square feet) across the world.
Workplace operations were managed regionally with little consistency in facilities processes, standards, or performance metrics. The 65 systems in place functioned with virtually no interoperability between them, and there was little coordination between real estate management and FM.
By 2002, Nokia shifted to a centralized global workplace, bringing together real estate management, workplace solutions, FM, financial management, and process and tools management. The organization as a whole standardized on a common workplace management system and adopted common processes, workplace standards, and performance metrics, cutting staff from 600 to 127 employees and vastly reducing costs.
Sustainability Agenda To Consider
In the U.S., buildings generate over 45% of carbon emissions and 70% of energy consumption. And in New York City alone, more than 4,000 buildings are owned and managed by the municipal government.
By early 2010, the cost of energy use by these municipal buildings totaled more than $800 million each year and accounted for nearly 64% of the greenhouse gas emissions produced by the city’s government operations.
Understanding and managing energy use is critical, and easy access to accurate data is central to this. The operational inefficiencies across the process spectrum can be enormous, and under those circumstances, the ability to manage assets intelligently is greatly hindered.
Web Based Tools Can Help
In 2003, the Gartner Group coined the term Integrated Workplace Management Solutions (IWMS) in order to describe products on the market that have been built to support the five core business processes. The goal of this exercise was to start resolving the challenges this poses for the efficient exchange of data.
In its 2011 report, Gartner identified an ideal IWMS that would deliver all five of the core processes on a single technology platform. The solution offers enterprise class integration with third parties through a web services interface.
Another Piece To The Puzzle
Automating processes using intelligent software is just the initial step towards smarter asset management. Consequently, some might make the case for a fourth tenet to this system—standards based solutions that deliver the previously mentioned IWMS. To create a truly sleek solution that effectively connects all the links in the FM chain, the sector requires an IWMS that is based on an established set of standards.
Standardization Case Study: Jackson Cross
A standards based IWMS has enabled Jackson Cross, a commercial real estate firm in King of Prussia, PA, to create a common language and framework for the exchange of data. Under the terms of the new IWMS, lease abstraction (the summarization of a commercial lease) now involves the aggregation of information from several versions of hard and electronic documents and databases. It requires multiple hand offs, reviews, and approvals.
Without a standard, this process would not only be time consuming, but it would be much more likely to lead to errors that affect legal matters like compliance reporting and billing. The standard has eliminated the need for duplicate data entry and reduced the opportunity for keystroke errors.
Historically, there would be a four to six month period for implementation of new systems before lease abstraction could happen, and once the system was in place, remote access to it would mean users would have to cross corporate security barriers.
Through its use of a standards based IWMS, partners at Jackson Cross can now essentially see a mirror image of their client’s system. By having a local version of the client data environment, they are able to create lease abstracts faster, eliminating the initial implementation period delay and saving clients precious time and money.
Through the use of this IWMS standard, Jackson Cross employees can quickly, accurately, and consistently generate lease abstracts and send them automatically to clients, who can then accept, reject, or request further clarification on details. What used to be a laborious, highly manual process open to errors is now a fully streamlined, consistent, and reliable process that has eliminated unnecessary inefficiency. Through its use of a standardized solution, Jackson Cross is now able to offer this service to any client using any compliant software system.
OSCRE’s Lease Abstract Exchange standard-based IWMS from TRIRIGA was the solution used in this particular case study.
Why are standards necessary? It’s because they provide a common language and framework for the exchange of data so all organizations in the supply chain—service providers, lawyers, owners, and occupants—can work together with maximum efficiency and accuracy, thus saving time and money. [For more on how this works, see the accompanying sidebar, “Standardization Case Study: Jackson Cross.”]
Today, IWMS provide the standardized software and web based tools that fms need to help streamline processes and activities. Smart FM all comes down to accessing accurate intelligence. Being armed with knowledge and insight is critical to effective improvement and the solutions are out there to enable it.
Williams is the chief executive officer for OSCRE, a not-for-profit consortium that helps the real estate industry to work more effectively through the use of cost-effective, standardized, and automated electronic information exchange. John Clark, marketing director for TRIRIGA (an IBM Company), and Lou Battagliese, managing partner with Jackson Cross, also contributed to this article.