While best practices and automation are not alien to the real estate (RE) and facility management (FM) fields, they haven't been as rapidly adopted compared to other industries. Most RE/FM organizations have grown organically, with generations of management building their businesses traditionally, in their own ways, if not always the most efficient ways.
This tradition-laden organizational evolution has served most RE/FM reasonably well, whether on a small scale or throughout a global portfolio, by effectively managing corporate assets that allow for reliable facility usage. However, suggesting that most operations can still be greatly optimized to yield significant efficiencies is not a business critique, but a proven fact.
Real estate typically represents the second-highest costs after human resources (HR) for a company, so streamlining even a small percentage of those expenditures can significantly improve the bottom line. Streamlining a practice lets management organize in order to be more strategic, and allows automation to enhance efficiencies by eliminating tedious, mundane activities.
In other words, once a company's real estate organization establishes streamlined and appropriately automated business processes, it will:
• Speed service delivery,
• Get more accurate performance metrics in real time,
• Be able to more quickly respond to customers, and
• Execute more efficiently overall.
The most appealing part of streamlining and automating is that start-up and follow-through are common-sense. For example, an organization should first examine which services it offers within the entire RE/FM spectrum, from early strategic planning to project management, and operations maintenance to building management. Then, after evaluating the performance of each service component, management should address each discrete process to define a best-practice approach. One caveat: the RE/FM industry does not currently have a governing body defining or setting best practices as fields such as accounting have. Although organizations such as Open Standard for Corporate Real Estate (OSCRE) are beginning to address this deficiency, the phrase "best practice" is essentially up to individual organizations or informed industry consultants to decide.
Working More Consistently, Anywhere
The industry is ripe for this kind of optimization, with many opportunities available to perform tasks consistently among most RE/FM organizations. When examining each service area, determine:
• The requirement of that specific process,
• Who the ultimate customer is,
• The motivation for the customer's plans to use the space,
• How to make the space support the customer's business model, and
• How to make the process support the requirement.
In analyzing siloed processes, it is critical to understand how processes overlap to avert improvements in one area that diminish another in the RE/FM lifecycle. That way, each becomes more efficient than a single, isolated service offering.
How should companies actually automate? Management should appraise existing processes and determine good practices within those. Then, develop a standard approach for each service in concert with each other. Next, determine efficiencies to be gained from automation, such as rote process parts (data entry, printing reports) that a technology tool can perform, versus those that still require expert, decision-making employees. Therefore, while the tool generates communication support, executives can more efficiently perform analyses and determine optimum practices.
Consider the example of work flowing automatically to services or trades. End-users can electronically enter an issue that requires attention, indicating where work is needed. Approvals for certain types of work can be automatically routed to a business unit or facility manager to assess costs, approve, or return. Instead of chasing paper on work orders for operations, a work order does not need to be printed. Anyone with a mobile device can instead view upcoming tasks, and which parts each task requires. Among other attributes, automation streamlines communications. Even the Internet and Web-based applications have fundamentally changed process execution and created pronounced efficiencies. Systems, instead of individuals, can track and electronically monitor performance, cutting mundane labor. Thus, systems not only make the processes work better, but also permit more accurate decision-making.
Streamlining and automation can significantly boost bottom lines for real estate organizations' and corporations' bottom lines. Here are three examples of a major international company, a U. S. company, and a large electronics manufacturer.
Case Study No. 1
An international company expended a cumulative three months and hundreds of thousands of man-hours conducting its annual budgeting. The productivity drags included coping with incoming data from multiple locations and entering it into Excel spreadsheets, calculating the budget plan, and rolling it up to the next level. Inevitably, the plan was rolled up through as many as four to six different levels each year, with someone at the upper level asking questions, reversing the process to the bottom for research and answers, then re-rolling the numbers again.
Today, the process is standardized and enabled through technology implementation. With actual costs tracked against previous budgets at the site level, expenditure patterns can be assessed and a new budget quickly drafted. Since all data can now be rolled up automatically, upper management can simply drill down for more precise and real-time data instead of going back and forth between top and bottom for questions and answers. Overall, technology introduction has delivered remarkable results and virtually eliminated huge investments of tactical support hours each year.
Previously, RE/FM employees spent a staggering 20-25 percent of their time managing data flow. Good data processes and appropriate automation have eliminated that wasted time. Additionally, the company can reduce staff count or do more work with the same staff. Plus, assets can be managed more effectively, so the assets themselves become less costly to operate, also reducing costs. For example, better energy management lets the company manage electricity and gas usage more efficiently, as reflected in the cost of those commodities over previous years.
Case Study No. 2
A company wanted to determine whether its janitorial services should work overnight as they always had, so as not to interfere with building occupants during business hours. Its analysis revealed a surprising discovery. Not only was it paying a premium for the service itself and the 10 p.m.-6 a.m. workers, it was unaware of the real costs of overnight HVAC and lighting.
After comparing costs, the company determined that moving cleaning to daylight hours would deliver significant savings with minimal disruptions, such as closing restrooms during certain hours. By monitoring impacts on facilities, RE/FM managers showed significant hard-dollar benefits from both the janitorial contract and energy consumption.
Case Study No. 3
Of these three case studies, the electronics manufacturer hit the most memorable home run. Without cutting corners, it assessed all of its business processes, implemented supporting technology, and looked beyond how the processes affected their internal operations to how it could make RE/FM more efficient. It examined how it touched other service organizations, such as HR, technology, and procurement, and how it impacted users in the field. Over time, it implemented integrated, cross-functional processes, which provided exponential benefits beyond only RE/FM, and has continued bettering these inter-service improvements by constantly monitoring, tweaking, and refining its approach.
The results? The company CFO said the implemented technology paid for all the work, including consulting and technology implementation, plus its own internal costs for change, by getting the investment back every quarter into perpetuity. Four times a year, its re-engineering program for process and technology expenditures pays for itself. For a company of any size, the savings can be impressive. For larger companies, the savings can run into the tens or even hundreds of millions of dollars.
Taking the First Step
C-level executives and facility managers must first understand the motivation for the services the company offers to initiate streamlining and automation. That is, what value does the company receive from these services? Second, streamline services so they optimize value not only within the specific service, but across the entire lifecycle. Third, look at what the technology can do once the processes are optimized and standardized, and the logical implementation strategy to support it.
Once the company understands the new service model, it becomes relatively easy to define what the system should do to make those processes work efficiently. From there, product selection and implementation against standard business requirements will emerge. Almost seamlessly, on a technology-enabled basis, companies can write a new chapter in driving costs down and driving efficiencies up.