An investigation into the added value of integrated facility management as perceived by suppliers

Abstract

Many authors consider establishing the added value of facility management (FM) to be the best option to achieve a paradigm shift in facility management from emphasis on lowest cost towards emphasis on its contribution to corporate performance. Increasingly FM suppliers profile their companies in the market by showing how they can add value for their clients. Likewise, internal FM departments increasingly attempt to motivate (or defend) their budget and profile themselves based on the values delivered. Integrated Facility Management (IFM) is defined as the method for large-scope, long-term, complex, multi-service provider transactions. The organisation taking care of the integral delivery and management of the facility services is under one contract and is responsible for the quality and cost of the services (Elemica, 2012).1 In added value models the added value is positioned and measured at output level: it is the effect or impact of a product or service delivered. Given the extent of outsourcing of facilities services, it is relevant to determine how suppliers of integrated facility management (IFM), the most strategic of sourcing models, monitor and communicate their added value. Two questions arise: 1) what IFM suppliers perceive to be their added value; and 2) how IFM suppliers communicate and monitor their added value to clients. This qualitative study builds upon previous added-value research by Lindholm (2008),2 Jensen (2010),3 Prevosth and Van der Voordt (2011)4 and Gerritse et al. (2014)5 and combines literature research, desk research, and semi-structured interviews with strategic managers/ directors representing 6 out of 10 IFM suppliers in the Netherlands. The results show that suppliers are beginning to emphasise other value domains besides costs. This requires adequate quality of the supplier-client relationship, and suppliers being able to measure their strategic impact on costs, but also on value domains (like satisfaction and sustainability). It is only after the IFM supplier has proven to deliver up-to-promise that the client is willing to consider other (softer) values. Also this study shows that IFM suppliers are limited in measuring their strategic impact on satisfaction, sustainability, and even on costs. Being able to measure the results will contribute towards the paradigm shift from cost to added value. The study illustrates the market need for a value-based management dashboard. Further research is needed to operationalise the FM values (especially productivity) into measurable, strategic indicators and to develop corresponding tools to monitor results.1

1Elemica (2012), ‘Integrated Facility Management in an Industrial Environment’, round table discussion at Sourcing and Supply Chain Conference 2012, October 30th, 2012, Frankfurt, Germany.