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FACILITIES MANAGEMENT: A Tool for Delivering Organisational Value

Every business in the world is established with Value in mind, value has defined by shareholders and stakeholders. Companies use resources to derive and deliver value – ASSET – comprising of current assets and fixed assets. Fixed assets in most cases constitute about 60% of the total assets.

Facilities Management (FM), which in most cases is also seen as a support function rather than a strategic function, is responsible for the management of 60% of the total assets of the business.

Facility management is a profession that encompasses multiple disciplines to ensure functionality of the built environment by integrating people, place, process and technology.

In management, business value is an informal term that includes all forms of value that determine the health and well-being of the firm in the long-run. Business value expands concept of value of the firm beyond economic value to include other forms of value such as employee value, customer value, supplier value, channel partner value, alliance partner value, managerial value, and societal value.

Peter Drucker was an early proponent of business value as the proper goal of a firm, especially that a firm should create value for customers, employees and distribution partners.

Do you know the % of staff cost on the operating commercial building?

Do you the cost of Operations and Maintenance on the total cost of a building?

Do you that cost of an asset is not only the cost of purchase of the asset?

Do you know you can increase productivity by improving the working environment of your commercial building?

Do you know that 90% of Operating cost of commercial Building is Employee cost?   – IFMA Studies

Do you know that Operations and Maintenance cost is 40% of the total cost of the building?

Do you know that true cost of an asset encompasses the total cost from acquisition, operations, maintenance and disposal?  –  Concept of LCC

Do you know that 80% of start cost for most businesses is fixed asset?

Do you know that 40% of running cost is maintenance cost?

Do you know that 30% of maintenance cost is avoidable and 20% is controllable?

Asset maintenance/management constitute the biggest impact in staff/customer touch point in any business

Ensuring proper utilization of assets to achieve desired ROA by

  • Focusing on space management (using space standards and charge back systems),
  • Identifying, deploying or disposing excess assets
  • Focusing on and utilizing ergonomics in office space design and implementation with specific references to – seating, a/c, lighting and office space arrangement
  • Ensuring proper management of fixed assets – Buildings and building services – to ensure capital appreciation
  • Implementing best practice in property management and maintenance (studies have shown that companies achieve over 70% efficiency in their building management if they implement outsourcing and SLA management)
  • Proper cost management – through benchmarking
  • Focusing and Ensuring employee comfort can lead to increased productivity (IFMA studies have shown that a 3% gain in productivity can lead to $3m gain in a 500,000sqf facility)
  • Make FM a strategic level function
  • Incorporate FM into the development process of the business – Design, Project Management, Operations & Maintenance
  • No new restaurant concept or development without facilities
  • Develop appropriate FM strategy – Outsourcing to professional organizations the best practice
  • Develop strict management by KPI for FM
  • Make every shop manager responsible for delivery on his/her asset – measuring return on asset (ROA)
  • Adopt international best practice in restaurant FM

MKO Balogun

MKO holds a B.Eng(Hons) Mechanical, MBA and he is a Certified Facilities Manager (CFM), Lectures at Unilag for the Master in Facilities Management. He is an EDGE Expert, a Fellow of The Nigerian Society of Engineers, and Professional Member Green Building Council of Nigeria.