The brave new world of technology
PFM gathers expert advice from the industry, including FSI, on best practice when implementing CAFM systems.
Many FMs find that keeping up with advances in technology to be something that they struggle to do on an effective basis, which is hardly surprising given that their role frequently pulls them in a number of different directions in quick succession.
Lack of time combined with the speed with which technology evolves is not an ideal mix and inevitably a significant number will turn to the suppliers they trust the most for advice on what to expect from the various systems currently on the market, as well as what to expect from future developments.
Even compared with a few years ago, the number of updates and new developments within technological solutions suitable for the FM sector have advanced at a bewildering rate in many instances. Those tasked with managing large, complex facilities are fortunate in having a wide choice of technological options to assist them with this, but this also creates the issue of making sure the best solutions are chosen.
In order to assist readers in their quest for more information on the use and implementation of CAFM systems, we asked a selection of experts when FMs should expect to see a return from their investment after implementing their new system.
One of the first to respond was VINCI Facilities performance director Gary Coding, who said: "As a main FM contractor our role and the role of our IT is to deliver FM efficiently and to add value. So when it comes to working out the payback on our investment in CAFM it's not down to how much extra margin we can obtain (because frankly the market will not tolerate contractors making much more than a few per cent), but to our competitiveness."
This means that not only is the impact of IT system in the company's baseline price - money off the client's FM budget, for example - but also how much value can be added, he continues. This will mean the client is helped to save indirectly or to better manage operational risk or support core business focusses.
"A good CAFM system provided by a contractor as part of an outsourced managed service should enhance quality and contribute at least 20% of any savings off the existing budget from things like intelligent planning, workforce scheduling, reduced admin and jeopardy management", says Mr Coding. If you then add insights gleaned from management information such as re-engineering unnecessary maintenance, further savings can be achieved.
"Apply that intelligence to capital planning, to asset replacement decision making and to the property acquisition and disposal plan then the really savvy FM client can make transformational reductions in overall cost of ownership and support to the business priorities and even strategy."
Mr Coding also provides some words of caution: "Savings of this scale are achieved only if you invest in the right systems and infrastructure and importantly, the right data management. If you don't pay attention to these the payback can be two to three years and then you get into CAFM lifecycle issues."
The payback, in partnership with the FM supply chain in a wholly collaborative relationship and a contract arrangement and methodology that allows as many benefits as possible to be derived, can be less than a year, says Mr Coding. "It's a complex world so it is best to also be well advised up front by a good IT director."
Further advice is provided by FSI (FM Solutions) marketing manager Sally Wotton: "Don't just look to purchase a CAFM solution from your CAFM supplier/partner. Look at a complete service delivery, and also look to push your boundaries of understanding as to what the solution can do for you and your business processes. You will then start to achieve a return on investment even before the CAFM system is implemented."
The entire process is important, she states, from identifying the in-house requirements, having good quality data for populating the system, matching individual requirements to a supplier/partner, implementing the system, complete service delivery, while also including continued after care and scope for growth.
From the perspective of the CAFM supplier/partner, the project should not just be about installing the solution as a standalone entity, but should instead focus equally on these complimentary services: consultancy, training, support etc, based on a thorough understanding of the client requirements. This leads to a CAFM solution delivering value to a business.
"Remember that the purchase of a CAFM solution is individual and unique to the business and its operation. ROI will therefore depend on many factors and isn't predictable.
"Building a dynamic and interactive relationship between supplier/partner and client is key to a successful CAFM project. Having a service-driven approach allows the client to define their project from the outset, and will allow for a project delivered on time, on budget, to requirements, and beyond," says Ms Wotton.
Service Works Group chief executive officer Gary Watkins also responds to PFM's question, and says it is proven that CAFM software enables businesses to work more efficiently by saving time and money. "Yet despite this, many facilities managers struggle to make the case for a new CAFM solution, often as a result of lacking the raw financial data needed to support their argument."
Calculating the ROI that can be gained from a CAFM system requires several significant pieces of information from across the facilities and estates departments and it is also important to consider the impact of doing nothing, Mr Watkins continues. For example, a decline in service levels, customer and staff dissatisfaction have a negative impact on business growth and development.
"Furthermore, before a new CAFM system is implemented, it is important to review the existing operational procedures within the FM department and decide which of the current business processes are to be retained and which are to be replaced. Introducing changes at the same time as implementing a new system can result in noticeable cost savings," he says.
Assuming that a thorough requirements analysis has been undertaken prior to software selection, a CAFM system should typically demonstrate payback within two years of deployment, or less, he states.
"Presenting a detailed ROI calculation, which demonstrates how CAFM software can deliver value to a business, and the expected payback period, is a strong influencer for those holding the organisation's purse strings.
"To support FMs seeking to produce this information, leading companies have developed a free ROI calculator service. This allows organisations to analyse and measure the speed at which year-on-year cost savings can be secured as a result of investing in FM software," says Mr Watkins.
TUV SUD Advimo real estate consulting and advisory Matthias Mosig is another to share his thoughts with PFM readers. He believes that implementation of CAFM systems raises the question of numerous qualitative objectives, in addition to how much ROI to expect and by when.
"The answer to this last question is after three to five years at the latest," he says. "The ROI with respect to potential savings very much depends on how many employees work with the same data and in what manner - the very area in which the CAFM is to improve process efficiency."
Activities that are accelerated by the use of CAFM systems save time, he continues. The more frequent an activity and the more employees work with the same data, the higher the savings in process costs, and the earlier the ROI.
"More specigically, a project that involves oneoff external non-labour costs of approximately euro 300,000 500,000 and around 40 to 80 users can deliver total savings of between euro 150,000-300,000 per year by reducing duplication of work," says Mr Mosig.
However, investment costs should also include the cost of internal employee capacities for system implementation and support. The largest cost item in many projects has been the acquisition of existing data as master data (of areas and technical equipment) is often unavailable or obsolete.
"Ultimately, the qualitative benefits of a CAFM must be weighed against its costeffectiveness. In most cases, realisation of potential savings no longer aims at downsizing but at reducing or slowing down the necessary staff expansion for growing real-estate portfolios and challenges in realestate management," Mr Mosig concludes.