The role of procurement in FM
Ian Harfield analyses if procurement practices are driving FM change
There’s no doubt that the FM industry is changing. Whenever an industry goes through a process of evolution, experts like to identify the catalysts of that change. So what are they?
Clearly the most obvious change is volume – there is increasing demand for FM in general, and at the same time the size of the very biggest projects continues to increase. But volume does not automatically bring maturity, so we must look elsewhere for the causes of change.
FM is a complex process, made up of many different stakeholders linking together to form an integrated service. So who has taken the first step? It’s at this point that the buyer or procurement executive will stake their claim to being the catalyst, stating that the quality of the tender documents, the clarity in the service requirement, the pricing structure and the evaluation process are the key drivers for change.
So is this correct? As the first link in the chain, for the procurement team to effect change they would need to understand what they are buying and how to tell the difference between price and value. The lowest price does not always represent the best value, and a drive for the cheapest will never effect change for the better, as the service partner will look to scale the service and performance to the price and not to the requirement in question.
So driving the change through procurement would mean that they understand the strategy of the property management team and develop a pricing document that focuses on the delivery of this strategy, but very few seem to be able to align this vision: we often see construction terms and conditions being used.
So, if we see the sorting of the supply chain through technical compliance, this starts to drive change, as procurement is taking on board the concept that cost and service delivery standards are intrinsically linked. The next step is the understanding of the document: input specifications will never improve the business. In fact, they will take it backwards.
Output is the only way forward. So if the procurement teams are developing and sending out clear output specifications, KPIs/SLA relating to service delivery, etc., they are then contributing to the maturity of the business.
This enables the supply chain to accurately estimate and calculate the service delivery solution: if all the bids submitted are within a close range of prices then the procurement team knows they have done their job correctly. This in turn means that the suppliers have understood and correctly priced what has been sent out, which means that the selective tiering of suppliers is a step forward which has a positive effect on the actual service delivery.
When you consider this, procurement can contribute to maturing the FM industry, but they are not the drivers.
About the author
Ian Harfield is the general manager of Cofely Besix Facility Management.