Managed Service In Facility Management
An IIT – Kharagpur alumnus, Daniel has been with Atos for over six years now, prior to which he held the role of Senior GM – Administration at TCS.A large part of an employee’s worklife is spent within the office space. A comfortable ambience in the office adds immensely to the productive output of the employee and is one of the most important contributory factors in the efficient running of the facilities. Companies therefore lay great emphasis towards high quality Facility Management services. Facility Management in India has evolved from the early days of obtaining services from small owner driven companies to integrated service of today that is provided by large companies having global operations. FM services has also moved from a pure manpower based contract to a Managed Service model
Man Power Based FM Contracts
Manpower based contract requires a defined headcount for various categories of service like janitors, electricians and others to be provided by the vendor as per their negotiated contract. The vendor endeavours to meet the requirement of manpower either by subcontracting to manpower providers or by active recruitment. The service expectations are loosely defined or may not be defined at all. The focus is on the number of manpower provided based on which monthly pay-outs are made and penalty imposed in-case there is shortage of headcount.
Challenges
The attention is on manpower provided in the above model. Hence, there is lower accountability towards quality of work, and workcycles are longer resulting in poor upkeep of work space and sub optimal maintenance of installed equipment. Skill level of the worker does not improve as they carry-out repetitive tasks. Workers have lower prospects of growth and there is scope for inclusion of redundant staff, leading to waste and over payment. Adhoc demands from the customer for vendor resources is the norm leading to lower productivity and increased cost. It is also difficult to arrive at benchmarks on manpower efficiency or rating the work quality. Vendors who do not perform continue to get paid at manpower rates negotiated in the contract. Penalty is levied for absenteeism of staff and there is lower scope to incentivise vendors who perform above expectation.
Managed Services
Today, FM service has further evolved to Managed Service. which is based on Service Level Agreement (SLA)and Key Performance Indicators(KPIs). This model is on the rise in the FM industry and several companies are migrating to this mode of operations. Here, the emphasis is on the quality of service rather than the number of head count provided. Customer expects that the service provider being the domain expert will bring-in process and technology to ensure high quality service is provided, whilst reducing waste and bringing efficiencies, thus reducing their FM cost and the vendor also makes higher profit margin. The service provider will focus on bringing higher skilled workers who can multitask and operate suitable modern equipment. Managed Service contracts are more powerful with clear expectations in
place. This is also driving the already competitive sector into a much more organized & accountable Integrated Facility Management Service(IFMS) model.
Today, FM service has further evolved to Managed Service. which is based on Service Level Agreement (SLA)and Key Performance Indicators(KPIs). This model is on the rise in the FM industry and several companies are migrating to this mode of operations. Here the emphasis is on the quality of service rather than the number of head count provided. Customer expects that the service provider being the domain expert will bring-in process and technology to ensure high quality service is provided, whilst reducing waste and bringing efficiencies, thus reducing their FM cost and the vendor also makes higher profit margin. The service provider will focus on bringing higher skilled workers who can multi task and operate suitable modern equipment.
Managed Service contracts are more powerful with clear expectations in place. This is also driving the already competitive sector into a much more organized & accountable Integrated Facility Management Service (IFMS)model.
Process
In a Managed Services contract, the SLA is a detailed document and segregated into verticals comprising various service categories. Weightage is given to each service category as per business criticality. Each category is subdivided into broad service deliver ables with delivery commitment and review system clearly indicated. KPIs are based on the SLA, and provide specifics of service required for each and every service deliverable. Weightage is also given to each service deliverable within the service category which is captured in the KPI sheet, along with process to score the outcome. Further checklists are prepared to ensure objective monitoring of work rendered by the service provider. Parameters critical to quality are defined in the scope shared with potential vendors and which is mutually agreed before award of contract. The vendor defines the manpower headcount required for a particular category of service within a range mutually agreed with the customer.
Pros: The emphasis is on the quality of work which is measured based on outcome of service rendered. The service can be assessed objectively as defined in the scope. The types of services required is documented along with KPIs, penalties for non-performance and incentives for higher levels of performance. The work is collaborative in nature, calling for active involvement of both vendors and end-customer. Use of focussed groups and multi skilled workers brings-in higher efficiencies. The service provider can focus on improving skill levels of their worker, invest in equipment to improve efficiencies of repetitive or complex work, and use digital technology for monitoring and reporting progress of work. Since the contracts themselves are performance-based, costs are more predictable, with vendors earning their way through the outcome of work instead of getting paid by default. Managed Services contract can be implemented in a standardised manner across locations. Compared to a manpower contract, scaling-up or scaling down of the service can be implemented easily as per changes in client’s business requirements.
Cons: Consistent monitoring by end customer is critical. The SLA and KPIs need to be measured objectively as defined. Any deviation or non-adherence can lead to protracted stand-off on payments that are claimed by the vendor. The monthly rating of the vendor service also tend to get affected adversely by one off incident which can only be avoided by close coordination at all levels between vendor partner and end customer. Scope to change SLA or introduce new KPIs is limited and this can lead to adverse effect on quality of service. The performance of the service provided by FM vendor is closely measured. However, if the vendor is not concerned by penalty imposed, then there is less scope for improvement in service quality.
Conclusion
The managed service model of facility management brings-in higher levels of efficiencies by reducing waste and focusing on quality of service. End customer needs to monitor the work in an objective manner basis signed-off SLA, KPIs and checklists. The deployment of higher skilled workers suitably equipped with optimal equipment and adaptation of digital technology to measure & monitor work will lead to a more congenial work space, bringing higher employee satisfaction and improved productivity for the end customer.
Today, FM service has further evolved to Managed Service. which is based on Service Level Agreement (SLA)and Key Performance Indicators(KPIs). This model is on the rise in the FM industry and several companies are migrating to this mode of operations. Here the emphasis is on the quality of service rather than the number of head count provided. Customer expects that the service provider being the domain expert will bring-in process and technology to ensure high quality service is provided, whilst reducing waste and bringing efficiencies, thus reducing their FM cost and the vendor also makes higher profit margin. The service provider will focus on bringing higher skilled workers who can multi task and operate suitable modern equipment.
The SLA and KPIs need to be measured objectively as defined, as any deviation or non-adherence can lead to protracted stand-off on payments that are claimed by the vendor
Managed Service contracts are more powerful with clear expectations in place. This is also driving the already competitive sector into a much more organized & accountable Integrated Facility Management Service (IFMS)model.
Process
In a Managed Services contract, the SLA is a detailed document and segregated into verticals comprising various service categories. Weightage is given to each service category as per business criticality. Each category is subdivided into broad service deliver ables with delivery commitment and review system clearly indicated. KPIs are based on the SLA, and provide specifics of service required for each and every service deliverable. Weightage is also given to each service deliverable within the service category which is captured in the KPI sheet, along with process to score the outcome. Further checklists are prepared to ensure objective monitoring of work rendered by the service provider. Parameters critical to quality are defined in the scope shared with potential vendors and which is mutually agreed before award of contract. The vendor defines the manpower headcount required for a particular category of service within a range mutually agreed with the customer.
Pros: The emphasis is on the quality of work which is measured based on outcome of service rendered. The service can be assessed objectively as defined in the scope. The types of services required is documented along with KPIs, penalties for non-performance and incentives for higher levels of performance. The work is collaborative in nature, calling for active involvement of both vendors and end-customer. Use of focussed groups and multi skilled workers brings-in higher efficiencies. The service provider can focus on improving skill levels of their worker, invest in equipment to improve efficiencies of repetitive or complex work, and use digital technology for monitoring and reporting progress of work. Since the contracts themselves are performance-based, costs are more predictable, with vendors earning their way through the outcome of work instead of getting paid by default. Managed Services contract can be implemented in a standardised manner across locations. Compared to a manpower contract, scaling-up or scaling down of the service can be implemented easily as per changes in client’s business requirements.
Cons: Consistent monitoring by end customer is critical. The SLA and KPIs need to be measured objectively as defined. Any deviation or non-adherence can lead to protracted stand-off on payments that are claimed by the vendor. The monthly rating of the vendor service also tend to get affected adversely by one off incident which can only be avoided by close coordination at all levels between vendor partner and end customer. Scope to change SLA or introduce new KPIs is limited and this can lead to adverse effect on quality of service. The performance of the service provided by FM vendor is closely measured. However, if the vendor is not concerned by penalty imposed, then there is less scope for improvement in service quality.
Conclusion
The managed service model of facility management brings-in higher levels of efficiencies by reducing waste and focusing on quality of service. End customer needs to monitor the work in an objective manner basis signed-off SLA, KPIs and checklists. The deployment of higher skilled workers suitably equipped with optimal equipment and adaptation of digital technology to measure & monitor work will lead to a more congenial work space, bringing higher employee satisfaction and improved productivity for the end customer.
