FM Notes from the Field: Short-term Planning
This week we’ll move on to a discussion of the FMO Maturity Model Level 4, beginning with the Short-term Planning competency. Before turning to the new topic, I need to make a clarification about the title of Post 8, two weeks ago. The subject of that entry should have been entitled Assessments, rather than Short-term Improvements.
As I thought about the assessment process and its importance as a manager’s first step in targeting improvement efforts, my enthusiasm got the best of me and I mistakenly titled the entry incorrectly. Since this week’s (and next week’s) topic is so similar to that erroneous one, it seemed a clarification was needed – now, on to this week’s blog entry.
The Best Allocation of Budget
Once the facility manager is comfortable with the Level 3 competencies, and has begun to use these skills in managing the facilities management organization (FMO) and property portfolio, budgeting and control begin to emerge as areas for renewed focus.
Thus, Short-term Planning and Performance Improvements are the competencies to focus on in order to answer Level 4’s key question: “What is the best allocation of my budget?”
In the short-term, FMOs must plan effectively to ensure that the portfolio is responsive to immediate operational needs. The planning horizon is generally less than three years, and the parent organization is operating will a relatively clear idea of the opportunities and threats it will soon face, which means the source of most facilities requirements will emerge from business units. As a whole, the organization will have a good idea of what budgets and cash flows will look like, adding a control element to the planning process.
In this planning environment, with its focus on growth and capturing revenue producing opportunities, key pressures include the cost of missed opportunities and lost business, the need to stay aware of laws and regulations, and similarly, to staying in front of emerging issues and trends.
To the maximum extent, this means that plans are focused on specifics, such as allocating space based on known or planned requirements.
Critical Success Factors
In past client work, we’ve used capacity – the ability to absorb more work, capability – the types of uses a facility is best suited for, and flexibility – the ability to quickly realign the space or change its use, as short-term planning levers. The American Productivity and Quality Center (APQC), in its 1998 Space Utilization Best Practice Report, outlined a few critical success factors useful for maximizing the FMOs success, while adding timeliness – the ability to respond in a given time frame, as a fourth variable:
- Business units and FMOs must have a mutual understanding of space needs.
- The FMO must be committed to providing flexible and timely service.
- A process for linking space utilization to business unit needs must be developed.
- Changes in business functions will drive changes in space requirements, and in turn, space utilization.
Perfecting the relationship between business units and the FMO is the first step in the short-term planning process. The APQC report goes on to highlight best practices at several companies, including DuPont, Kodak, Knight Ridder, and Dun & Bradstreet, including the two highlighted below:
“…a fundamental strategy is maintaining the flexibility of space. This allows the company to take advantage of the market costs, maximize space utilization, reduce office space quickly, and minimize rent costs.” (Dun & Bradstreet)
“Occupancy strategies are based on enhancing business effectiveness, reducing costs, providing great flexibility for the changing business environment, and reducing infrastructure costs.” (Kodak)
Back in 1998, the IWMS market place was much different than it is now. The APQC report forecasts the evolution of modern systems based on the process capabilities of a custom-designed tool used at Dun & Bradstreet: audit, change management, accurate allocation information, rental and lease inventories, employee counts, occupancy cost management, and rent processing. With the advent of so many tools and their ever-improving interface with enterprise systems, facility managers have better visibility than ever for finding ways to improve capacity, capability, flexibility, and timeliness.
Next Post
Next week’s post will move on to the second Level 4 competency, Performance Improvements. Until then, thanks for reading the FM Notes from the Field blog, and thanks again to Steven and IWMSNews.com for hosting it, and as always, if you would like more details on the references mentioned in any of the posts, drop a note to me at jim.turner@iwmsnews.com and I will send a reading list.
