optimizing expenses through iwms - citybuild.bg hohmann... · 2014-10-27 · optimizing expenses...

Optimizing Expenses through IWMS (Integrated Workplace Management Systems)

Prof. Dr. Joachim W. Hohmann, CFM Technical University Kaiserslautern, Germany

School of Building Construction Facility Management

October 24th 2014, Sofia, Bulgaria

Meet Our Presenter

Joachim Hohmann, CFM, Ph.D., MSc is a professor teaching facility management technology at the Technical Universities Darmstadt and Kaiserslautern , Germany. As a co-founder and CEO of Consultants Circle in Frankfurt he provides consultancy in facility management strategy and technology to a wide range of organizations. He served on IFMA’s Board of Directors from 2010 to 2013 and represents IFMA on the Board of Directors of Global FM, Melbourne, Australia. He is an active member of IFMA’s Consultants and Information Technology Councils and the co-founder of GEFMA’s (German Facility Management Association) CAFM SIG (special interest Group). In 2002 he received his CFM (Certified Facility Manager) designation from IFMA Houston, TX USA.

Alliance between IFMA ITC & GEFMA

What is an IWMS? What are the major obstacles to overcome the reluctance of senior management to invest in IT for FM? Are there well proven standards for an IWMS Business Case? What are future IT trends, which will have an impact on FM?

Session Learning Objectives

Agenda / Outline

IWMS Definition ROI and Where to Start IWMS Business Case GEFMA 460 Guideline Selling to the C-Level Trends in FM IT

IWMS (Integrated Workplace Management System)

• Facilities and space management

• Property management

• Maintenance and building management

• Project management

• Environmental/Sustainability management

• Source: GARTNER group

GARTNER IWMS Magic Quadrant 2014

IWMS Example

FM Automation Goals

• (cost-) transparency • availability of up-to-date and consistent information • Model, control and monitor FM processes • avoid redundancy and unnecessary efforts • discover weaknesses, cost drivers and optimization potentials • decision support • integrate information, data sources and software applications

and generate synergies • make the FMs’ know-how available to the entire organization • business contribution

Economic Benefits of an IWMS Implementation – ROI Dimensions • Budget

• People

• Expertise

• Time

• Organization

Economic Benefits of an IWMS Implementation – Example

GEFMA Guideline # 460

More than 100 vendors globally The CAFM/IWMS market has no visible structure to the C-Suite There are many CAFM/IWMS installations which are not really productive Investments in CAFM/IWMS are much more questioned by the C-Suite than in any other application software


Provides a methodology and checklists to quantify the validity of the software installation

GEFMA Guideline # 460 Using Business Case Templates


• Business case should be built on various business impacts, underlying assumptions must be transparent • Most organizations only look at tangible business impacts

• BC must rely on existing performance data (e.g. from ERP)

• Risk distribution is much better than for many other investments

• Pay back period is typically between 18 and 24 months, once you have a proper implementation plan in place

Tangible Lessons Learned

Real Business Case

• Replace existing (no longer supported) FM IT software by state-of-the-art solution, which meets actual standards and requirements

• Evolution from FM expert system to widely used casual system

• Provide appropriate support by end of 2013 for 1.000 employees to be relocated into refurbished open space workplaces

• More extensive use of existing FM related systems (e.g. SAP PM)

• System consolidation and integration from 20 to 3

• Fulfillment of compliance requirements

• More agility in outsourcing additional FM services

• Higher contribution to company bottom line

Process Scope

• Strategic Space Management

• Workplace Utilization Management

• Move Management (including Onboarding)

• Cleaning

• Energy Management

• Meeting Room (Planning & Allocation)

• MFD (Multi Functional Devices for IS)

Business Case Top 5 Savings Areas

ROI calculation according to GEFMA guideline 460 Syngenta IWMS (in CHF)

Year 2.012 2.013 2.014 2.015 2.016 2.017 TOTAL Comment cost Software evaluation consulting -80.000 -10.000 Supply- and Implementation phase

Software licenses + database -80.000 -100.000 Installation -10.000 Interfaces (SAP) -100.000 Project management/Training -50.000 System customization -50.000

Operation Operation&maintenance fees (18%) -32.400 -32.400 -32.400 -32.400 Hardware rental services (HP) -12.000 -12.000 -12.000 -12.000 -12.000 Ongoing system optimisation + Training(10d/a) -15.000 -15.000 -15.000 -15.000

Termination of existing systems Operation&maintenance fees (18%) 41.150 41.150 41.150 41.150 Hardware rental services (HP) 12.000 12.000 12.000 12.000 12.000 Ongoing system optimisation + Training 27.000 27.000 27.000 27.000

Sum of costs -170.000 -310.000 20.750 20.750 20.750 20.750

Assumption: all benefits will be effective in year 2013 with 25%, in year 2014 with 75% from year 2015 on with 100% to ensure that ramp-up effects are taken into account

Space optimisation through improved utilisation(empty rooms, under occupied space, not permanently occupied space etc.), if external rented space could be terminated(in FY GoLive +1) -> 1% of rented space costs p.a.(CHF 8.1Mio.) 20.250 60.750 81.000 81.000 81.000 cash out

Meeting room space management, if externally rented meeting rooms(hotels etc.) could be avoided(in FY GoLive +0) -> One offsite meeting per week at CHF 1'000 13.000 39.000 52.000 52.000 52.000 cash out

Minimizing the amount of time for energy reporting(consumption per sqm) for Minergie-building certifciation, if external auditor costs could be reduced by 50% -> estimate 50% of 10 engineer days @ CHF 1'200 0 4.500 6.000 6.000 6.000 cash out

Reducing the amount of time for head count allocation to business units and space-based corporate-internal cost splittings, if SLA KGM could be reduced by 50% ->50% of CHF 44k.p.a. 5.500 16.500 22.000 22.000 22.000 cash out

Reducing the amount of time for external lease administration, metering allocation to tenants, automated rent increases, if contract fees with PSP could be reduced by 1% -> 1% of estimated rent value of CHF 3'277k.(all rental income from 3rd parties, excluding affilates) 8.193 24.578 32.770 32.770 32.770 cash in

Semi-automatic monthly contract volume follow-up on cleaning contracts, if occupancy is mapped directly to cleaning service level -> 1% of yearly cleaning contract volume of CHF 1.2Mio. 3.000 9.000 12.000 12.000 12.000 cash out

Reducing the time to build, maintain and enforce security and evacuation plans, if contract w/ interflex/siemens/etools could be cut by CHF 10'000 annually / estimation of CHF 10'000 p.a. 2.500 7.500 10.000 10.000 10.000 cash out

Avoiding misallocation of additional rented space by better forecasting models(HC) and benefits to avoid growth in rental space of 13% p.a. by 10% through business challenge -> 10% of 13% rental growth p.a.(= 1.3% of CHF 8.1Mio.) 26.325 78.975 105.300 105.300 105.300

opportunity cost reduction

Ensuring that all rent payments are invoiced on time (correct amounts, contractual increases in accordance with local law), if rent income could be increased by 1% p.a. as an average(rent increases + interest effects) -> 1% of CHF 3.277Mio.rental income p.a. 8.193 24.578 32.770 32.770 32.770 cash in

Ensure that key handling will be more efficent, if SLA Housekeeping w/ JCI could reduced on hourly basis(new contract) additional avoid one swap p.a. for an one locking system-> 50% reduction of 5% labor time of two FTEs @ CHF 120k.p.a. + CHF 6'000 (2012-2014) 7.500 10.500 12.000 6.000 6.000 cash out

Through better space planning tools with what-if-scenarios and automated workplace allocation including interaction optimisation 10% of annual moves could be avoided (CHF214000+900moves*CHF 700) -> 10% of CHF844'000 annual relocation costs 21.100 63.300 84.400 84.400 84.400 cash out

Building drawings could be maintained by internal project managers instead of external CAFM company, if service contract could be reduced by 50% -> 50% of CHF 88'800 11.100 33.300 44.400 44.400 44.400 cash out

Enable Syngenta employees to do the mass relocation planning of ROSE by themselves, if contract w/ IKB(external move planer) could be reduced by CHF 100k. -> CHF 100'000 100.000 cash out

Sum of benefits 0 126.660 472.480 494.640 488.640 488.640 Benfits per yr. CHF 0 CHF 126.660 CHF 472.480 CHF 494.640 CHF 488.640 CHF 488.640 CHF 2.071.060

Cost per yr. -CHF 170.000 -CHF 310.000 CHF 20.750 CHF 20.750 CHF 20.750 CHF 20.750 -CHF 397.000

net benefits -CHF 170.000 -CHF 183.340 CHF 493.230 CHF 515.390 CHF 509.390 CHF 509.390 Cash Flow (SCF) -CHF 170.000 -CHF 183.340 CHF 493.230 CHF 515.390 CHF 509.390 CHF 509.390 CHF 1.674.060

Cumulated Cash Flow -CHF 170.000 -CHF 353.340 CHF 139.890 CHF 655.280 CHF 1.164.670 CHF 1.674.060 Discount factor 1,00 0,83 0,69 0,58 0,48 0,40 20%

Discounted Cash Flow (DCF) -CHF 170.000,00 -CHF 152.783,33 CHF 342.520,83 CHF 298.258,10 CHF 245.654,90 CHF 204.712,42 CHF 768.362,92

Cumulated DCF -CHF 170.000,00 -CHF 322.783,33 CHF 19.737,50 CHF 317.995,60 CHF 563.650,50 CHF 768.362,92 Return on Investment (ROI) -100% 31% 575% 1399% 1381% 831% 266%

Creating a good C-Level Proposal “Show me how your proposed expense impacts the overall business operation”

• Options - do nothing vs. A, B or C scenario

• Impact Analysis, ROI and Payback Period

• Supporting Documentation

• Multiple Sources

C-Level Proposal Must Haves

Creating a good C-Level Proposal Step 1 – Gather your information

Do Nothing Scenario As unacceptable as it may seem; What will happen if we don’t… fix-it, buy-it, burn-it or improve-it?

• What expenses would we incur, when, where?

• How much business would we lose?

• What other liabilities might we incur?

• What is our total risk?

• Would the Sun come up in the morning?

Creating a good C-Level Proposal Step 1 – Gather your information

Options A, B or C The solution must show the C-Levels how these options either; Make us money, save us money, or help us meet compliance requirements

• Which of the above will this solution impact? How so? How much?

• How are our competitors meeting this challenge?

• What do the top vendors recommend?

• What does Web research show?

• What has been the historical approach and outcome?

Creating a good C-Level Proposal Step 2 – Impact Analysis

Options A, B or C Detail the proposals positive impact on the business 1. Tangible Business Impact – Performance, Service Delivery, Savings, Compliance,

Warranty & Repair, Administration, Errors, Resources 2. Intangible Business Impact – Sustainability, Time Savings, Recognition, Business

Showcase, Brand Improvement 3. Detail how long it will take to recognize these benefits 4. What do the top vendors recommend? 5. What are the Pro’s & Con’s of Outsourcing? 6. What does Web research show? 7. What has been the historical approach and outcome?

Creating a good C-Level Proposal Step 3 – Cost Analysis

• Initial Costs: Assets, People, Training, Support, Legal, Others?

• Future Costs? Licenses, Maintenance, Other?

Cost Benefit Analysis

Payback Period

True ROI

Documented Trends in FM Technology

What Happened the last 3 years:

Technology as an Integral Part of FM Technology as a Driver for Sustainable Building Operation FM Adopts latest IT trends BIM as an Accepted Standard


Commonalities Across the Globe:

Technology itself (in spite of building culture, climate zones, societies) Need for Standardization Implementation Periods


Some Differences:

Cloud Acceptance BIM as a Standard Adoption of IWMS The Definition of CAFM

Survey Statistics - Europe

Online Survey Spring 2013 GEFMA Newsletter & Social Media 230 Respondents (Users &Prospects) Central Europe (A, CH, D, L, NL) Industries: Financial & Facility Services, Providers, Public, Others

Survey Application Areas - Europe

0% 20% 40% 60% 80%

Environmental Stewardship

Security

Reservation

Relocation

Other

Lease Administritation

Key & Access Management

Inventory

Energy Management

Cleaning

Maintenance

Area & Space Management

Survey Results - Europe

0% 20% 40% 60% 80% 100%

CAFM reduced failures and outages

CAFM increased area & space utilization

CAFM reduced operational costs

CAFM increased efficiency of facility services

CAFM provided transparency of costs and performance

CAFM provided better quality of compliance documentation

Stimme vollkommen zu Stimme eher zu Stimme eher nicht zu Stimme überhaupt nicht zuFully Agree / Partially Agree / Partially Disagree / Fully Disagree

Survey Future Trends - Europe

0 50 100 150

Augmented Reality

Big Data Integration

Bring your own device (ByoD)

Flexible Workplace Management

Sustainability

GIS/ Google- Integration

Building Information Modeling (BIM)

Graphical Workflowgenerator

CAFM und Cloud Computing

Mobile CAFM

Anwender Nicht-AnwenderExisting Users / Prospective Users

Survey Statistics - US

Spring 2014 Online Survey

158 Respondents

Existing Users & Providers

28 States Represented

Cross Industry

A lot of “other”

Industry Reach

In which business process is IWMS in use?

How long did it take?

Are you satisfied with the outcome?

Open Discussion

Prof. Dr.-Ing. Joachim W. Hohmann, CFM Technical University Kaiserslautern

School of Building Construction Facility Management

Paul-Ehrlich-Strasse 14 67663 Kaiserslautern

Germany Phone: 0049-631-205-2898

Mobile: 0049-160-96272628 Email: [email protected]

Contact

optimizing expenses through iwms - citybuild.bg hohmann... · 2014-10-27 · optimizing expenses...

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