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FM in Action


Relationship and contract measures in 2015: an introduction


Despite many publications and views to the contrary, the The Facilities Management Peer to Peer Client and Suppliers Club concludes that FM is not and will not be a strategic for any business. It is however, a business enabler and as such we all recognise that FM is valuable to and is signifi cant cost of doing business; as a result of which FM has infl uence


iscussions with businesses served by an FM platform enabled the P2P to identify a clear FM value statement: ‘A risk managed and appropriate environment offering maximum fl exibility at the lowest possible cost.’ No doubt you recognise as we do, that business continues to reduce the available budget for FM and is frequently against the advice of the FM Platform. The message for us all is clear. The FM platform is governed by one principle only. “don’t spend if you don’t need have to and what you do spend must be spent wisely”. Success for any FM platform, therefore, must rest in how effi ciently it spends money. This is must be at heart of the FM relationship with business it services and the suppliers it uses.


D


The context We recently conducted a survey with client Peer to Peer members (client and supplier) that overwhelmingly demonstrated how crushingly unaligned the connection is between the client and supplier, and the contract that forms the basis of that relationship. Over 84% of those surveyed either identifi ed that their contract was working well, but the relationship was negative, or vice versa. Only 16% suggested that the contract and relationship were in sync. No matter what size or sector of FM platform is


deployed, it will be a combination of client and supplier’s contractual bond (Figure 1). The platform’s ability to best service the business is wholly dependent on the strength of relationship that exists between the client and the supplier.


Governing principles The core principle that governs successful FM contracting is ‘what is spent on FM matters is decided by the business and how wisely it is spent is decided by the FM Platform’. Therefore, the judgement that determines success for any FM platform is whether it has spent the money provided in the most cost-effi cient manner.


Are you a client? The overriding condition for success rests in user demand control and management. The client organisational design must include Relationship Management (RM) to enable effective fi scal management and agility in supporting the businesses fi nancial and operational demands.


Are you a supplier? The supplier must demonstrate that monies given to them are spent effi ciently (‘spend is under control’). Forcing behaviours that vary from these principles will increase the ‘seam of discontent’ and the supplier should recognise that: ■ The money being spent belongs to the client who can choose to spend it with whom they wish.


■ That, outside a change in scope of the contract, the contract value will never increase and with innovation should decrease.


‘Seam of discontent.’ A clear disjoint exists between


the expectations of the relationship and contract and contract management used to underpin those expectations. The seam of discontent (fi gure 2) which is created by the four corners of discontent resides, to a lesser or greater extent, in every FM contractual relationship. As the seam of discontent widens, tension between the client and supplier becomes unhealthy introducing risk for the client and making the FM platform ineffi cient. Equally, the contract procurement or purchase processes have remained largely the same as were


Figure 1 – FM supplier to client models


Figure 2 – Seam of discontent


148 FACILITIES


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