Benchmarking to Achieve Efficiencies Dr Rachel Dick FRICS 13th May 2016

Scope

► The purpose of this presentation is to examine the benefits and use

of structured asset and facilities management data and covers the

following themes:

► What’s the data’s purpose? Understanding the business’s

strategic direction

► Property data: how to find it and how to apply it

► Best practice in data application for productivity, growth and adding

value

► Benchmarking and measuring your property and portfolio progress.

The Five Year Look Forward

Key Drivers

• Integration of Primary and secondary care

• Multi-speciality care / ability to treat more than one illness at

once

• Emphasis on health education

• Increasing elderly care / cancer treatments / mental health

services

• More mental health and social care needed

• Delegated budgetary control to GPs

• Smaller hospitals forming networks

• NHS providing more support to care homes

Estate Trends

• Human Scale

• Flexible and adaptable

• Less complex to construct and plan for

• Standardised and uniform in design

• Easier and less expensive to maintain

• Reduce the risk of accumulating massive backlog

maintenance

• Integrated into the communities they serve

• Easier to reuse/dispose of in future

• Consolidation of existing estate

How big is the NHS budget compared to other areas of public spending?

• Circa 19% of public spending is on health. This is equal to £140b for 2014/15.

• Based on 2014/16 the OPEX of the Estate was £5.68B which is approximately 4% of the

total budget.

The State of the Estate

The Estate:

The majority of the estate is

Acute, not primary or mental health

like the Five Year Look Forward

Plan identifies as required

The Acute estate is equal to 20.4M

m2

>58% of the Acute estate is ‘very

large’ i.e. above 75,000m2

The whole occupied foot print of the

estate has 12% deemed as

functionally unsuitable, the majority

of this is contained in the acute

estate

The Risk:

A total of £4.3B backlog

maintenance exists

Of which £1.52B is classified as

high and significant risk

The majority of this risk is

contained in the Acute estate

The Trimmed Mean

Hard FM

£/m2/annum

Soft FM

£/m2/annum

Total Energy Costs

£/m2/annum

Large Acute £286.73 £406.67 £91.74

Medium Acute £135.50 £188.13 £51.27

Multi Service Acute £131.96 £274.04 £89.40

Small Acute £132.63 £183.56 £35.80

Specialist Acute £170.89 £129.42 £37.94

Teaching Acute £280.73 £344.26 £86.69

Ambulance Service £75.39 £45.82 £20.19

Care Trust £369.11 £555.49 £115.51

So what does the unit rates

tell us apart from whether

the current service cost is

on market?

The trimmed mean in this instance is based on the 50% under the curve

Types of Benchmarking

► Several types of benchmarking will be required to track progress

and demonstrate return on investment: ► Cost & Performance Benchmarking – how much investment is required to achieve a

specified level of service delivery

► Asset Maturity Benchmarking – from ‘innocence to excellence’ and in line with ISO

55000?

► Reference Architecture Benchmarking – to show ‘as is’ data capture to ‘to be’

► Only from knowing where an organisation ‘is’ can any journey be mapped. Making

improvements need to be understood and tracked against the status quo. Any data journey has

to be planned and the speed of travel well understood from strategic to operational levels. This

should remove the need to ask ‘are we nearly there yet?’

► The journey will require people, processes, data and systems:

► PEOPLE: The right level of skills and expertise will need to be in place to lead and

deliver the required business outcomes

► PROCESSES: The business architecture will need to be end-2-end and there will

need to be interfaces to the IT technology and hand offs between business units

► DATA: The data required to support business decisions has to be understood by all

and provide ‘a single version of the truth’

► SYSTEMS: The reference architecture (the physical ICT assets) need to be able to

support the data capture, access and analysis required through embarking on the data

journey. Commonly this will involve aspects of cloud, analytics, mobile, social and

secure features (CAMSS)

Benchmarking of cost is not the answer in itself!

Supply & Demand Separation

What’s the data’s purpose? Understanding

the business’s strategic direction

Benefits of AM & FM Data

► A more structured approach to AM & FM data lead to enhancements

in:

► standardisation

► financial performance

► decision making

► risk management

► services and outputs

► social responsibility

► compliance

► reputation

► organisational sustainability

► efficiency and effectiveness

► motivated staff

► supply chain relationships

Options Appraisal

Plan & Design

Invest capital

Refurbish or Build

Operate & Maintain

End of Life

Business Case

Creation

Data Equals Wisdom

Robert Logan, ‘What is information’, 2010

Data

Information

Knowledge

Wisdom

Pure and simple facts, no particular organisation,

basic atoms of information

Capacity to chose objectives

with one’s values within a larger

social context

From data to

wisdom requires

a journey Structural data – additional meaning

data in context and significance

The ability to use information

strategically to

achieve one’s objectives

Potential Business Decisions

► Only by having the relevant data can evidence based decisions be

made:

► How does the asset base support the business objective?

► What is the return on investment from the asset base?

► How big does the asset base need to be to support the business

functions?

► What are the big risks and how likely are they to happen?

► When does the cost, performance and risk of the assets out weight

the value achieved from the asset

► What investments need to be made to mitigate risks

► When are acquisition and disposal decisions are required?

► Where should new assets be based?

Property data: how to find it and how to

apply it

The Data Journey Stages

► To undertake a data journey there is some investigative work

required that will address: ► What data is already being captured?

► How it enters the organisation?

► How it is stored?

► How it is accessed ?

► How it is analysed, interpreted and used to make business decisions?

► To improve the quality of business decisions the capture, storage and

assessment of data needs to be fully understood – i.e. where we are versus

where we need to be

► Is the data being captured appropriate to make decisions upon?

► Is there an enterprise wide system – i.e. is >60% of the business data stored and

accessed in one place, if so then adding a business warehouse to the business

system is advised. If many disparate systems the a data lake which can have

analytical filters applied.

► The data should provide a ‘single line of sight’ and be a ‘single version of the truth’, this

will require a ‘data dictionary’ that is common to all members of the organisation

► An information and communication technology (ICT) strategy should mirror the

information strategy (IS) i.e. the IT asset base should be capable of supporting the

data required

The Data Journey to Resilience

Data and tool

layering:

trailing of

capability

Scenario and simulation

testing: ensuring tools and

models are operationalised

Value delivery stage:

modelling and understanding

data

Enabling stage: ensuring data

capture is possible and making

data visible

Developing a greater

understanding of risk and

consequences across business

Milestone

5

Milestone

4

Milestone

3

Milestone

2

Milestone

1

The Data Journey Stages

► There are 6 essential stages in the data journey: ► DATA CAPTURE – Invest and improve in the capture of data (BMS and SCADA). Capture

performance data and have a common understanding business wide.

► COST & PERFORMANCE MODELLING - Control and optimise data through the use of

tools and models and ensuring these are optimised. This will include modelling operational

costs and the impacts of those costs through CAPEX investment. It will allow decisions to

be made based on ROI from CAPEX spend and the impact on OPEX from lifecycle spend.

► RISK & CONSEQUENCE MODELLING - Data integration and identification of asset

criticality.

► Real time data used. This will rely on developing DST that model risk and probability

(5X5 matrix) of asset failure based on condition (Weibull’s curve) and remaining

service life.

► The consequence of failure needs to be understood in terms of the cost and the

impact on the asset base (i.e. standby capacity and the use of other assets to ensure

the functional outputs are achieved such as mega litres/day in the water industry)

► SIMULATION & SCENERIO TESTING - Initiate scenarios, use real time data, E2E

processes. The extent of the influence needs to be understood so ‘worst case’ scenario

risk, cost and performance can be understood and where possible mitigated against.

► DATA LAYERING & GEO SPATIAL VISULISATION - Building clear picture and roadmap

based on enhanced understanding of business. Geo spatial visualisation of asset base (the

good, the bad, the expensive and the ugly).

Data Layering & Geo Spatial Visualisation

• Space utilisation

depicted by shape

quarters completed

– 75%

• Colour depicts

statutory

compliance – red

low compliance,

amber medium and

green high/100%

• Shape size depicts

size of office – i.e.

large

• % represents ROI

Layering of demographic

data with asset

management data to be

able to provide a view on

resilience of the estate to

meet current and future

health demands.

Data Management Reference Architecture

Information Governance

Policy / Organisation / Change Management

Data Architecture

Data Quality

Meta Data

Data Sources

Enterprise

Unstructured

Informational

External

Web

Data

Repository

Operational

Data Store

Data

Warehouse

Time

Persistent

Repository

Dimensional

Layer

Unstructured

(Big Data /

Content)

Staging Area

MDM

Reference

Data

Management

Operational

Orchestration

Components

Data Load

Components

CRUD

Transactional

Components

Data Quality

Content

Management

Document

Management

Services

Federation

Content

Ingestion

Content

Services

Content

Extraction

Business

Intelligence

Reporting

Planning,

Forecasting,

Budgeting

Scorecards

Dashboards

Querying

Monitoring

Analytics

Simulation

Optimization

Visualization

Predictive

Analytics

Data

Mining

Text Analytics

Streaming

Analytics

Access

Web /

Services

Portal

Device

Web

Browser

Data Integration

Extract / Subscribe Batch Real Time Transactional Load / Publish Transport & Delivery

Data Systems Maturity Stages

As Is Stage 1 Stage 2 Stage 3

Focused Ambitious Visionary

System Maturity Disparate

Systems

Redundant Systems Integrated Systems Enterprise Systems

Organisation Functional Silos Integrated Organisation Aligned Organisation Collaborative Organisation

Process Maturity Manual

Processes

Automated Processes Coordinated, Integrated

Processes

Transformational Processes

Business Insight Reflective Reactive Proactive Predictive

Compliance,

Risk

Non-compliant Basic Compliance Mitigate Risks Institutionalised Controls

Implementation Portfolio management

Lease admin/accounting

Transaction management

Project management

Facilities management

Asset management

Preventative maintenance

Operations

Integrate more than one

department, RE, operations,

facilities and projects

Facilities performance

management

Operations performance

management

Projects performance

management

RE performance management

Integrated workplace

management solution

Enterprise performance

management

Advanced facilities planning

Advanced operations planning

Advanced program and project

portfolio planning

Financial

Return/Value Low: 5%-8% Medium 12%-20% High 20%-30%

Data Organisation

20

Capital

Projects

• Ability to identify

priorities for funding

• Understanding

project risks and

financial benefits of

potential

investments for

better decision

making

• View performance

metrics

• Understand

payback periods

and annual savings

• Improve project

delivery by

accelerating

schedules

RE Portfolio

Management

• Understand real

estate

requirements

• Visibility to

lease/rental data

• Secure better deals

• Incorporate

demographics into

real estate location

decisions

• Links to space

management data

Space

Management

• Understand and

improve space

utilisation by

geography, location

and unit

• Implement mobility

strategy

• Track locks and

keys

• Implement

streamlined move,

add, change

processes

• Capture paper

CAD based

documentation in

an electronic

repository for

better access

Operations

•Reduce response

times to repair

requests

•Reduce inspection

violations

•Minimise lost

productivity resulting

from facility downtime

•Improve funding

visibility for better

funding decisions

•Maximise

maintenance staff

utilisation

•Control costs and

budgets

•Increase the

statutory compliance

of property

Energy &

Environment

• Uncover viable

environmental

projects

• Provide data to

assist in project

prioritisation –

financial paybacks

and environmental

benefits

• Long term planning

analytics to identify

trends and enable

comparisons over

time

• Environmental and

financial tracking

of progress

against defined

targets

Organisational Data (HR, Payroll, IT alignment)

Corporate Finance Data (Invoices, Time & Resource, Profit)

Best practice in data application for

productivity, growth and adding value

Key Performance Indicators

Tier 1:

Strategic

Outcome driven

and risk orientated

Tier 2: Tactical

Output driven and cost orientated

Tier 3: Operational

Input driven and performance orientated

Key Performance Metrics

► There are 7 key metrics which have the potential to aide decision

making:

► Metric 1: Space Utilisation

► Metric 2: Cost of Occupancy

► Metric 3: Space Productivity

► Metric 4: Location Productivity

► Metric 5: Safe, Secure & Comfortable Internal Environment

► Metric 6: Journey to Work/Start of Day Wellbeing

► Metric 7: Lease Life

Metrics 1 - 3

(1) Space Utilisation (2) Cost of Occupancy (3) Space Productivity

Data Required • Operating Income

• No. Consulting Episodes

• No. of beds/clinical space

• Gross & Net internal area

• Rents/Leases & Rates

• Insurances

• Utilities

• Hard & Soft FM Costs

• Lifecycle replacement

costs(FFFE)

• IT equipment

• Asset depreciation

• Data from Metric 1

• Gross operating

income

• No. of clinical

staff/Consulting

episodes

• Data from Metric 1 &

2

Functional Unit(s) • Beds & OPD/Consulting

Rooms/m2

• Operating Income/m2

£/m2/annum

£/bed/annum

• £/annum/bed and/or

Consulting episode

• £/annum/m2

• ROI

Description/Purpose Space utilisation by location Total occupancy cost by location

metrics

Profitability of clinical

space

Question answered How densely populated in this

clinical space?

Is the space expensive? Does the clinical space

represent a ROI?

Correlations to test Is there an optimal occupancy

level in terms of successful

patient outcome/operating income

– i.e. a critical mass?

Does high occupancy costs result

in increased motivation/higher

levels of productivity?

Is profitability linked to

PLACE & PALS scores?

Metrics 4 - 7

(4) Location

Productivity

(5) Safe & Comfortable

Environment (6) Start of Day Wellbeing (7) Lease Life

Data Required • No of sick days

• No of workplace

accidents

• No of workplace

incidents

• No of statutory non

compliances against all

statutory compliance checks

and requirements

• Energy rating of building

• PALS & PLACE results

• Data for Metric 4

• Journey distances by range per

employee

• Journey time per employee

• Lease end dates

• Equipment end dates

• IT Hard and Software

end dates

Functional Unit(s) • Average no.

of sick days

per employee

• Overall % of statutory

compliance

• Average % of customer

satisfaction

• Building energy rating

• % of staff live X-X miles from

work

• Journey to work time/no. of

miles might (i.e. mph) be

considered a measure of

stressfulness

% of life remaining per

lease, equipment and

IT assets

Description/

Purpose

Loss of

productive time.

Building safety, security and

comfort levels

Suitability of locations to

populations they serve and

workforce (where practical)

End dates which require

business decisions to be

made by.

Question

answered

Does the building

represent

avoidable costs?

(reputation, fines,

taxes and

recruitment)

Is the clinical space legal? • How motivated do employees

feel when they arrive to work?

• How many employees would be

glad to partake in flexible

working (where practical to do

so)?

When do I need to make

decisions and/or

reinvest?

Correlations to test Is the number of

sick days related

to the length of

journey time to

work or mph to

work?

• Is the customer satisfaction

related to the number of sick

days taken?

• Is statutory compliance linked

to high occupancy cost or

low?

• Is employee wellbeing linked to

profitability (quick, easy work

journeys result in greater ROI

because people are more

motivated)?

Is statutory compliance

low because

asset/property is being

sweated due to lease

end/end of life date is

close?

Continuous measurement of your property

and portfolio progress

Example of Drill Down Dashboarding

The ability to review data from a

strategic level down to an asset

level and see where the maximum

return on investment is being

achieved or not

Space utilisation and planning decisions can be taken based on near real time data.

Data Layering & Geo Spatial Visualisation

• Space utilisation

depicted by shape

quarters completed

– 75%

• Colour depicts

statutory

compliance – red

low compliance,

amber medium and

green high/100%

• Shape size depicts

size of office – i.e.

large

• % represents ROI

Layering of demographic

data with asset

management data to be

able to provide a view on

resilience of the estate to

meet current and future

health demands.