2.1 Baselining

Last edited: 27 August 2011

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1. Baselining  - the basics

Determining a baseline assessment for Facilities Management (FM) is an essential first step within any service improvement exercise. Accurate information on Performance and Costs are core to baselining.  Evidential areas that require to be collected and assessed will inevitably lead to the determination of the following:-

  • Evidence that FM Performance Targets and Service Standards are consistent with the organisation's overall objectives
  • Evidence that such FM Performance Targets are being achieved
  • Evidence that costs compare well with others (allowing for external factors)
  • Evidence that costs are commensurate with service delivery, policy and outcomes
  • Evidence that costs fully reflect policy decisions
  • The extent to which the FM service currently achieves value for money

 

Knowing the accurate current cost base in terms of total costs, risks, obligations as well as the evolving position over the medium to long term is a critical starting point within a Baseline assessment that can position the demonstration of value for money as well as ensuring effective alignment in supporting key services. Whilst intelligence on cost base is integral to robust business planning, a key indicator in determining the strength of an FM service would be the degree to which FM Strategies integrate with other organisational strategies - departmental and organisational business plans reflecting accommodation needs and strategies in the short, medium and longer term.  Where organisations fail to link strategies, the financial consequences result from waste in relation to underutilisation of buildings, empty properties, and further expenses to either sell or renovate from a poor state of repair. Other examples include energy losses through poor management of meter readings or lack of attention to income recovery.

This needs to be considered in conjunction with the actual use of a building to deliver a public service, and how the FM services will support or detract from the effective delievery of that front line service.

Organisational goals and objectives need to reflect the current economic, political and social environment resulting in the need to continuously review and maintain an effective FM strategy. Such FM strategy should be evidence based and demonstrate a value for money approach including:-

  • Current data regarding cost base and activity
  • Discussion as to why change is required
  • Alternatives / appraisal of options for service provision
  • Clear vision on optimal service provision
  • Clear cost structure and financial plan stating affordability

 

Within the FM Service Strategy there needs to be a demonstrable understanding of:

  • The organisational budget planning process
  • Monitoring against budgets
  • Responsive/Client/Service Performance requirements
  • KPI's

 

In order to create the most likely environment within which optimal service decisions can be taken, it is important for Facilities Managers to have access to accurate, real time data. Quality information can facilitate appropriate reactive strategies as well as enabling changes to strategic direction in response to changing business needs. Service data should reflect all aspects of service delivery and would therefore include not only statistical information on soft and hard functions of facilities management, but should encompass qualitative measures such as:-

  • Strategy review - has the strategy delivered?
  • Process review - are the processes able to deliver the outputs required against the business objectives?
  • Performance measures - are they in line with best practice industry standards?

 

Facilities Managers should have a clear understanding of the strategic aims of the organisation and the processes related to the organisation and design if they are to fully support and contribute towards the achievement of the organisational outputs and objectives of the services using such facilities. Effective FM requires robust leadership and clear communication strategies in ensuring that all "client" services are integral to the delivery and strategy of FM service provision. Clarity in required levels of support is critical and typical issues arising can include:-

  • Users being unaware of the FM services they should expect to receive ;
  • Users expectations on quality of services being undefined; and
  • Users being unaware of policy/best practice on FM that may impact upon service expectations.

 

In respect of the latter, an example of this could be ensuring a common understanding of the foundational issues that may be found in environmental issues covering:-

  • Recycling policies
  • Renewable energies
  • Emission measurement / cost carbon credits
  • Disposal of waste
  • Power costs
  • Security

2. Approaches to baselining for Facilities Management

Baselining is a pre-requisite to any robust process for decision making on service provision and would, by necessity, incorporate the determination of the fundamentals of performance and value for money. Contractual arrangements require clarity and expected performance to be well signposted. Clear specification needs to be linked to effective cost management and competitive pricing. As well as service definition, the establishment of a robust cost base and review process is critical.

In order to establish a baseline approach it is important to recognise that the sheer variety of services that are typically offered within an FM framework may require individual assessment. Measures employed as part of such a Baseline Assessment should be easy to collect and collate and should not be intrusive or difficult to understand. Some suggested baseline pricing structures for services are listed in the table below (this is not intended to provide an exhaustive listing) :-

 

Hard/Soft

Functions

Possible Pricing Method

Possible Baseline Measure

Soft functions

 

 

 

 

 

 

Cleaning

£ per desk

£ per square metre

Time allocation £

 

Hourly rate £

Satisfaction survey

Programmed cleaning delivery within timescales

Security

Time allocation £

£ per camera

£ per alarm system

 

Equipment maintenance levels

Hourly rate £

Perception of safety

Helpdesk / Reception

Staff time £

Length of time open £

Per customer visit £

Visitors

Space utilisation per FTE

 

Catering

£ per meal / buffet per head

£ per function

 

Unit cost

Portering

£ per item / box / office move

Time allocation £

Distance allocation £

Unit cost

Turnaround time

Printing and Post Room

£ per unit / department weighting

 

Space utilisation per FTE

 

Occupancy/Rooms Management

£ per square metre

 

Space utilisation per FTE

Meeting room utilisation

Hard functions

 

 

 

 

 

 

General Building Maintenance Internal

£ per building m²

Materials £

Staff time £

Unused/unusable space

Unit cost

Turnaround time

General Building Maintenance External

£ per building

Materials £

 

Turnaround time

Satisfaction survey

Unit cost

Repeating repairs

Grounds Maintenance

Time allocation £

£ per garden

Satisfaction survey

Cost by type/metre/hectare

Maintenance of fixtures and fittings

Repair costs £

Materials £

Staff time £

Turnaround time

Unit cost

Repeating repairs

Building Services (mechanical and electrical)

£ per contract (e.g. lift)

Turnaround time

Unit cost

Repeating repairs

Plant Servicing/Maintenance

Periodic contract £

£ Specific item contract

Satisfaction survey

Unit cost

Small improvement work

£ per job

Turnaround time

Unit cost

Satisfaction survey

 

In addition to general unit price information indicated above, there are a number of methods which support organisations in their corporate social responsibility by providing environmental assessment indicators used to describe a building/facility performance. Comparing baseline with other organisations is useful; however it is important to recognise that the cost base used may vary slightly between organisations. Unless there are clear definitions as to how costs are structured it may be difficult to make an effective comparative assessment and great care should be taken when drawing any conclusions from comparative analysis.

3. The robust business model for Facilities Management

Where all sources of relevant base information are collected within the Baseline Assessment, the construction of a Business Model should be relatively straightforward. The construction of a Business Model should encompass a Medium and Long Term approach with a basic minimum three to five year period being modelled.

The basic requirements of a Business Model for FM would include the following:-

Structure

Requirements

Service Definition

Service need requires to be defined - desires and objectives translated into outcomes, outputs and targets

Compatibility

Full integration with "client" and organisational service objectives

Delivery Options

Identify realistic delivery options to meet service need - some may be discarded on basis of rough costings or lack of congruence with organisational objectives.

Financial Modelling of Options

Prepare annual net cash flow models for each option on most realistic data available.

Risk Assessment

Full stress testing of base assumptions. Recognition of  behavioural aspects of 'Optimism Bias'

Non Financial Issues

Focusing on costs and benefits not included in the monetary appraisal. Adopting a multi-criteria weighting and scoring approach to value any previously unvalued costs\benefits.

Determination of Service Delivery

Carrying out the appraisal synthesising the monetary and non-monetary elements into a recommended option.

Commissioning Service Delivery

Putting into place/ commissioning the best service delivery platform for FM Services

Performance and Financial Management

Implementation of robust Performance Monitoring and Management environment. Accurate, timely information and robust Forecasting.

Review

Facilitate modification/adaptation/changes within the Business Model to take account of unforseen events/impacts.

 

In addition to basic requirements, a robust Business Plan for FM would include more specific attributes covering :-

  • A properly resourced, realistic programme of service delivery over the medium term;
  • Continual updating - testing evolving FM scenarios, risks and sensitivity analysis - legislative changes etc;
  • Formal processes to continuously link the Business Plan to other organisational plans (e.g. IT strategies, workforce strategy, asset management plans and service development plans);
  • The full integration with the organisation's Financial planning, operational and investment budgets;
  • Continuous consideration of options for new sources of income, new ways of reducing costs and of attracting additional sources of funding;
  • Evaluation of opportunities to invest to save (e.g. early intervention and prevention);
  • Fully reflect joint planning with Partners and Stakeholders;
  • Process to ensure systematic continuous review;
  • Capability of evaluating the financial implications and the long term affordability of new policy options, initiatives and major projects as they arise;
  • Ability to assess the Long Term/Full Life affordability of new/changed investment requirements;
  • The clear reporting and review of realisation of expected financial cost savings;
  • The capacity of exit strategies for partnership working/time limited funding; and
  • Budget Challenge - Building budgets from lowest levels of activities - challenging budgets using a zero based approach where appropriate.

4. From baselining to business modelling

Effective baselining is the foundational platform for robust Business Planning. Given the wide variety and complexities inherent within the provision of FM,the need to fully baseline the service will significantly influence the potential to create a Planning structure that will optimise and drive out service improvement and cost efficiency.