What are the main challenges of asset and facility management?

In the recessionary period we are currently on, started in 2009 and worsened by the 2019 pandemic, most asset and infrastructure managers sought effective and rapid improvements in operational results, which led to service contracting practices being usually led by the price criterion, leaving all other service scope and quality factors to be secondary.


This reality has been detrimental both to those providing Facilities services and to the Client. Regarding the providers, it puts them all in the same “box”, regardless of the efficiency or quality of the service delivered, particularly when there are no indicators to show the differences in performance between providers. For the managers of building facilities and other infrastructures, the possibility to define parameters to control the desired services is reduced, without the chance to reward or penalize providers for deviations from the contracted service levels (SLA).


On the other hand, in the process of determining the value of rents as a function of market variables, managers mostly consider the property’s evaluation, but should take into account the cost of operations associated with the buildings’ exploration, which are decisive to establish the rent, without prejudice to the expected profitability.


It is in this context that Facility Management (FM) is particularly important, namely, in the ability of Facility Managers to negotiate and manage contracts efficiently, and to coordinate teams of employees who are often not their direct subordinates. In technical terms, the Facility Manager (FMer) must have a comprehensive knowledge of different specialties that allows him to communicate with specialized technicians and macro monitor the unfolding of all services. He must also look for solutions that allow him to implement control processes, measure variables, and create performance indicators to monitor service levels (PDCA Methodology, Plan, Do, Check and Act). Finally, he must have the ability to make a convincing pitch when presenting an investment project to management or the owner, as well as the necessary skills to apply an asset evaluation strategy.


Nowadays, technology plays a decisive role in real estate asset management and it is a strategic challenge across all Organizations to restructure the activity in the digital age. It is not about buying technology. Digital transformation is a competitive and strategic advantage. It’s not simply about updating technology, but about renewing the vision of the business.


However, this goal is far from being easily achieved, either for cultural and organizational reasons of aversion to change, or due to difficulties in having the technological skills, but frequently, also due to a lack of strategic sense.


The main challenges of asset and facility management


Currently, asset and infrastructure management entities are aware of this new paradigm, not neglecting the control of occupancy costs and the efficient use of spaces, factors that have contributed to the recognition of the value that the FM can add to Organizations by rationalizing the facilities’ operating costs.


The need for operational efficiency implies the search for clear and concise information on the buildings’ operating costs and the systematization and disclosure of reference indicators for the performance of facilities and associated services.


Whoever invests in the rationalization of space, optimization of maintenance/availability of facilities and the reduction of operating costs has an enormous competitive advantage in the market. We are therefore facing the rent value binomial and the space operating costs. The asset profitability can be greater by increasing rents, in times of economic growth, or by controlling costs, in times of recession, when the supply of spaces exceeds the demand.


Connectivity, data and intelligence are three factors that are transforming the Facility Management models.


In this transition from the physical world to the digital world, agility, speed and control of , such as deadlines (time), volumes (quantity) or costs (financial) are the means to achieve process efficiency and customer satisfaction.


It is also important to mention that, currently, it is possible to communicate with buildings in real time, taking from the various systems and sensors, a myriad of data that, if well treated, allow to inform both building managers and their users. Giving the former the ability to make more informed decisions for the benefit of the comfort and satisfaction of the latter and, at the same time, identifying expenses and inefficiencies that involve waste of resources.


The multiplicity of functions guaranteed with FM processes, where IoT (Internet of Things) is included, allows to monitor and ensure the maintenance of equipment installed in buildings, detect leaks or impending breakdowns, and alert customers to anticipate problems. Responding to all this is forcing software manufacturers to move from a product-based offering to a service-based offering, when providing management and control platforms.


In the area of facility management, in general, there has been a major movement towards putting people at the center of the issue and giving birth to more humane and efficient spaces where occupants can be happier, more productive and more engaged. The focus has shifted to the user experience and its impact, not just the apparent space quality, or even its cost.


The role of FM teams is also to evaluate the performance of buildings in order to bring transparency to the market, and for that it is necessary to add up all costs associated with the operation of the facilities in a systematized way, to know their performance.


Source: Pedro Ló, W. Space Facility Management – Valuekeep Business Partner

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