Benchmarking emphasises the importance of learning through comparison, says Mike Packham, helping FM organisations to add real value.
04 April 2018 | Mike Packham
"We have to wake up to the idea that our ability to turn data into information advantage, our ability to respond faster through clever decision-making, which is enabled by the flow of information, is actually frankly as important if not even more important than whether our tanks out-range an anti-tank missile".
The above quote, from General Gordon Messenger of the British Army, may seem an odd way to start an article about benchmarking, but it has a lot of resonance
with today's FM market generally, as well as benchmarking specifically.
Why benchmarking is important
Benchmarking is about comparison - but not just any comparison. It has to be on a strict apples-for-apples rather than apples-for-bananas basis. We are looking to learn from the exercise rather than use it as a means of cost reduction, which sadly, is often the case.
Three key understandings
In the context of learning or continuous improvement, to use management jargon, benchmarking can provide:
- A validated baseline against which the efficacy (or otherwise) of future service improvements can be tested.
- An understanding of what best practice looks like (bearing in mind that circumstances around attainment of best practice might differ from our own organisation).
- Prompts to ask questions about why our own benchmark statistics sit where they do compared with others, and what drives a particular
set of results.
There are two primary benchmarking techniques: comparative benchmarking and target benchmarking.
Within my organisation, we will typically start with a comparative exercise, using it as a 'first strike' review to set the baseline (as referred to above) and identify any 'sore thumbs' requiring further investigation.
We then target benchmark these 'sore thumbs' to understand why the results are out of line with expectations or are adrift from what 'best practice' suggests.
You may have noticed I've avoided mentioning what is being benchmarked up until now. That is because I am increasingly seeing a change in the market from a concentration on cost to a more holistic value-based approach to the delivery of real estate and facilities management services.
As a result of the banking crisis in 2008/9 and the subsequent recession, cost was a primary concern for many organisations.
However, the global financial situation has eased and organisations are starting to look again at how much they pay for their premises and operational/occupational services, with increasing awareness that cheapest is not always best from an organisational productivity perspective.
Cost is no longer isolated
With productivity in mind, it is right that the role of real estate and FM should be challenged to show how it adds value to the organisation. In benchmarking terms, we're seeing a switch from consideration of cost in isolation to a combined assessment that also includes review of performance (quality) and underlying processes and procedures that deliver that level of performance.
This is a welcome change as benchmarking cost in isolation from an assessment of performance provides, at best, a partial picture of the true situation.
A recently completed commission provides a good example. The cost benchmarking exercise threw up no real surprises with FM service expenditure generally in line with expectations for an organisation of that type, occupying that sort of building, and so on.
But the performance benchmarking results - derived from a mix of helpdesk statistic analysis and structured stakeholder interviews - told a different story. An independent observer, without knowing the background, would have assumed the two sets of results related to two different organisations rather than the same one.
In summary, to address the productivity agenda, benchmarking needs to move from being a one-dimensional, cost-focused exercise to considering performance and process/procedure.
The outcome is a more rounded view of the value that real estate and FM add to the parent organisation. To do this, as General Messenger suggests, we need pertinent, accurate and timely data. Once we have this, we can use it to generate "information advantage" and enhance our ability to make faster and better informed decisions.
Advances in information technology are facilitating this, but that is a story for another day.
Mike Packham is owner of facilities consultancy BWA and author of the BIFM Good Practice Guide on Benchmarking