While the government’s Digital Built Britain strategy offers the promise of bringing FM right into the design process, it’s not going to happen overnight. Katie Puckett reports.
Budge up, pull up that chair, someone get another mug – there’s going to be an extra person around the table. Facilities management professionals at last have secured an invitation to the pre-construction meetings. Traditionally FM didn’t get a look in until the very end of a project, when the team was presented with a finished building and – if they were lucky – a colossal heap of information to sort through. Now, as the industry adopts building information modelling (BIM) they are being drawn into a single process of managing a built asset across its lifecycle.
FMs have long argued that they should be involved earlier to prevent bad decisions that increase operational costs down the line, a philosophy that is now enshrined in the government’s BIM and Soft Landings strategy. This aims to close the gap between buildings’ predicted and actual performance and smooth the handover process by involving FM from the earliest design stages. So in the short term, the public sector Level 2 BIM mandate will mean closer working between construction and operational teams. Further into the future, it raises the possibility of genuine convergence between them.
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In February, the government followed up the Level 2 strategy with Digital Built Britain, a strategic plan to implement Level 3 BIM – the point when it really gets interesting from an FM perspective. At Level 2, the whole construction team works collaboratively to create a BIM model with associated data, but Level 3 extends a transparent, integrated approach across the asset life-cycle.
“BIM was predicted to drive around 25% out of the cost of buildings, but when you drill down, a lot of the savings are in occupier management and FM,” says Ian Smith, head of occupier project management EMEA at CBRE.
In the short term, the most immediate benefit of BIM will be a more complete, accessible record of what a building contains at handover. “Once we might have been given a room with loads of files, now it’s on a disk, ready to go,” says Katy Dowding, managing director of Skanska’s FM team. “We can literally download it out of the BIM model and upload it into our CAFM [computer-aided FM] system.”
This will also mean that contractors bidding for work will be able to price their services more accurately, and that no asset is overlooked: “The other day I was asked to price a building and given 150 drawing PDFs and no asset register,” says Kath Fontana, managing director of BAM FM. “My team had to spend a week doing take-offs from the drawings. With BIM, we will get the model and the COBie spreadsheet. Historically the data handed over to FM from construction has never been formally validated or verified. Now it will be, which means that we ought to be able to de-risk the process for the client.”
“Once we might have been given a room with loads of files, now it’s on a disk, ready to go.”
Katy Dowding, Skanska
But it’s the further extension of BIM’s technological potential that will really make a difference to FM. Digital Built Britain foresees that with the “internet of things” – where web-enabled building systems communicate autonomously with each other – there will be the opportunity to collect in-use performance data to guide maintenance and investment decisions, rather than following manufacturers’ generic guidelines. The government predicts this will transform the way assets are managed and delivered.
“At Level 3, it starts getting more interesting because we will be able to drill right into the detailed asset register of every component in the building, allowing maintenance to be undertaken in a very specialised way,” says CBRE’s Smith. “We already keep a solid database of equipment and life expectancy, but that’s never going to be as accurate as real-life data.”
He also envisions further efficiencies: “If the BIM model is wired up to the building management system we can track it all the time, constantly monitoring performance.” This would also enable occupiers to plan ahead. “So often refurbishment decisions are driven by the fact that a major piece of plant has failed and you can’t get to it. These are the sorts of things that are supposed to be driven out with BIM.”
This operational data could be even more valuable when used at construction stage, providing a much stronger backing for decisions based on whole-life rather than upfront costs.
“Many of these principles have been around for some time, but BIM is a tool to take it to another level,” says Roger King, director at Telereal Trillium, a property management company and FM services provider. “The biggest opportunity for FM as an industry is to demonstrate how they can influence cost and risk by being involved in the design. On the flipside, that’s also the challenge for the FM sector: to demonstrate how design change will improve service or reduce costs, or that if you maintain a building in a certain way, it saves money.”
FM’s maturing market
Facilities management accounts for an increasing share of contractors’ workload – and, crucially, profits. Kier, Laing O’Rourke, Carillion, Vinci, Mace, Skanska and BAM Construct are among the firms now earning a significant proportion of their income from FM, with business units that have expanded beyond social housing repairs and PFI contracts to target a much broader FM market: encompassing “hard” FM services such as fabric repairs, fit-out and M&E services, and the “soft” side of security, cleaning and catering.
They’re lured by higher margins, a more regular workload and longer-term relationships with clients. The exact figures are hard to come by: contractors often bracket together their FM business and other activities such as roads construction in “support services” divisions. But Kier’s interim results, for instance, show that margins in the services division stand at 4.2% compared to 2.1% in construction, while Carillion says that it provides FM services to 150,000 buildings in the UK, Canada
and Middle East. Recently it won sole provider status on a new £1.5bn Scape FM framework.
“The biggest opportunity for FM as an industry is to demonstrate how it can influence cost and risk by being involved in the design.”
Roger King, Telereal Trillium
But FM is a rapidly maturing industry, barely older than the concept of BIM itself. The market is undergoing considerable consolidation, polarising into multibillion-pound turnover “total FM” providers such as Interserve, Sodexo or ISS, with smaller specialist or regional players at the other end and very few in the middle ground. The biggest are steadily acquiring smaller companies to add new services or clients, and expanding into higher value business outsourcing activities or new “soft” services such as employee wellbeing.
Others are expanding into FM from other angles. Leading property consultancy CBRE bought technical services firm Norland last year and is now negotiating to buy Johnson Controls’ global FM and energy business, which would give it much greater scale and close the gap between hard FM and corporate real estate advice.
And while BIM is a likely to be an important integrator, Ross Agnew, director in KPMG’s asset management advisory team, points out that it is also part of a wider trend in the property sector encouraging clients towards whole-life decision-making – an approach that has been promoted by the ISO 55000 FM standard launched last year.
“There’s a fundamental shift in the marketplace that’s been going on for a couple of years,” he says. “The majority of the bigger property-owning organisations have started to make life-cycle cost decisions aligned to business outcomes, working across the asset life cycle rather than just taking decisions at construction or maintenance stage.” There may be different drivers for organisations in the public and private sectors – budget cuts or profit – but the result is the same.
On the other hand, CBRE’s Smith believes there remains a major divide between those responsible for capital and operational expenditure. “The gap is closing, but I think it will take legislation. For organisations that take whole buildings, cost is a real issue and they’re looking to do anything to reduce costs. But the vast majority of UK occupiers are in 10,000 sq ft or less – that’s 75% of the market in multi-let buildings – and integrating FM is much tougher for them.” And new buildings account for a very small proportion of the built estate.
Integration or independence
The view from Steve Davies, who just joined Kier as managing director of its FM business, moving from FM giant Compass Group, is that there’s certainly a rationale for more joined-up solutions.
“I think we are uniquely positioned – we can go to a client with a fully integrated, cost-effective solution to build an asset and look after it. As long as you can provide best value, why wouldn’t you? The FM aspect of a building is actually very small, but energy costs are a huge number in a corporate real estate director’s budget.
“So if you can deliver, say, an energy solution as well, the opportunities are huge. FM has evolved over time as companies add more and more service lines – I can see the construction side as an extension of that,” he says.
“Historically the data handed over to FM has never been formally verified. Now it will be, so we ought to be able to de-risk the process.”
Kath Fontana, BAM
And as the sector continues to consolidate, Kier might be looking for further acquisitions. “If there’s the right organisation at the right price, and it will help to build our company, why wouldn’t we? I don’t think there’s anything that Kier couldn’t deliver to a client,” Davies says.
But while contractors emphasise the complementary nature of their construction and FM services, clients may prefer to keep them separate, warns Mike Packham, partner in FM consultancy at Bernard Williams Associates. “The one-stop-shop model might be attractive to some clients but others are going to see it as a conflict of interest,” he says. “When CBRE bought Norland, one of my clients was a legal firm that had CBRE as their landlord and Norland as their services provider, and they didn’t like that.”
Similarly, the negative press around PFI could make clients wary of combining construction and FM, says Packham.
So while it looks as if the market for integrated construction and FM services will exist, it will always be limited to certain clients and assets. However, Kath Fontana, managing director of BAM’s FM division, believes that FM providers that are part of construction firms may have an advantage in selling integrated solutions. “It’s quite specialist to understand what happens in the design and construction process. The operational FM who doesn’t have a lot of construction experience could struggle to contribute effectively.”
Also, she wonders whether the generalist FM role that has developed over the last 20 years might split into more specialised functions: “Those who work closely with design and construction could be specialists in that, and there might be operational FM, working with corporate real estate and HR.”
Mike Packham agrees that while there are certainly opportunities for construction’s FM divisions, there are challenges too. “If you’re going to sit in a design meeting and contribute meaningfully, you’ve got to understand the design process,” he says. “We need to speak the same language as clients too – business doesn’t care about assets, it cares about profit and loss. FM needs to raise its game. Not only do we need to understand business but value for money, audit trails, the operational side of asset management, risk management…”
There’s little doubt that BIM has the potential to bring together the provision of design, construction and FM services in long-term client-contractor relationships where both sides can benefit from the certainty of information and the ability to plan and model in advance. Meanwhile, the promise held out by the Digital Built Britain is in full convergence with the physical building and digital “doppelganger” informing each other over the lifetime of the built asset. But for the technology to boost efficiencies, there has to be a supply side capable of delivering it, and client demand too – and that’s where we’re still putting the pieces together.
