Introduction to Estates Master Facilities Benchmarking and Cost Prediction Model

1. Introduction to EstatesMaster Facilities Benchmarking and Cost Prediction Model A presentation to Breakfast Briefing: ‘State-of-the-art Benchmarking and Cost Management of Facilities in Large Estates’ by Prof. Bernard Williams FRICS IFPI Ltd 14th June 2013

2. Contents • What is EstatesMaster? • Modules • What is it used for? • Who uses it? • How does it work? • The data – sources and application • Levels of access • Accuracy • International application

3. What is EstatesMaster? • intelligent decision-making tool • web-enabled • uses current cost and performance data • predicts the costs of facilities services without measured estimating • can be applied to single buildings or whole estates of up to 10,000 buildings.

4. Current modules Web-enabled • Maintenance • Cleaning • Security • Energy/CO² • Distribution • Stationery • Service charge Excel (pending web-enablement) • Archiving • Catering • Reprographics Excel (in development) • Grounds maintenance • Water consumption • Space use

5. What is it used for? • Cost benchmarking • Performance level benchmarking • Facilities strategy • Due diligence on bids • Preparing to outsource • Cost management to best performance targets • Negotiating contract extensions at benchmarked prices

6. Who uses it? • Estate owners • Service Providers • Managing Agents • Educationalists

7. Challenges to financial benchmarking • Allocation of expenditure – where and what for? • Every building is different! • Good comparable data • Exact match of buildings and performance • Exact match of resource drivers

8. International challenges • Understanding the local labour market • Cross-border cultural differences • Language barriers

9. 1. 2. 3. 4. 5. 7. 6. Quantitative Drivers Business Drivers Service Level Drivers - Quality Service Level Drivers - Local Factors Operational Drivers Economic Drivers How Much / How Many Functional Requirements Specification of Works Specification of Regime Problems of Operation £ Macro- Areas Staff Total Costs Facilities Policy Access Frequency Head-count Occupation Equipment Design Output Performance Time of Day Volume Micro- Consumables Quality Control Unit cost - per sq m / per capita etc. EstatesMaster model – the principles

10. Problem of identifying scope of activities

11. How does it work ? – granular benchmarks • EstatesMaster benchmarks the scope items in each generic cost centre. • The known cost range for each scope item has been assessed and the cost drivers identified and weighted. • The program’s questionnaires address the key cost drivers for each scope item • The benchmark within the range for each scope item is calculated from the answers given to the questions • The values of scope items for each generic cost centre (Cleaning, Maintenance etc.)

12. How does it work ? – granular benchmarks E.g. • Say Window Cleaning has a normal cost range of £0- £3.00 per sq. m GIA (£0- £ 0.27 per sq.ft.GIA). • The cost drivers are: • Window/floor area ratio • Standards of cleanliness achieved – and for how long • Local factors affecting condition • Accessibility • Design of windows • Market rates for window cleaners • Competitive basis of any overarching managing contract

13. How does it work ? – granular benchmarks • Depending on the answers to the questions the program will select a figure somewhere between the known min/max in £/sq.m or sq.ft GIA i.e. from: £0 - £3.00 per sq. m or £0- £ 0.27 per sq.ft • The result will be added to the results of all the other scope items in Cleaning to give a benchmark for the Cleaning Cost Centre • All the ranges used in the program relate to best performance

14. EstatesMaster Results Graphic

15. Granular analysis – E.g. Security

16. Where does the data come from? • Consultancy benchmarking studies • EstatesMaster surveys • Due diligence for service providers

17. How is the data used? • The raw data is not accessed directly by the program. • A model for each facilities service module with reference to the identified best-performance. • A good comparable would be the reference to tendered prices by Quantity Surveyors in construction cost planning.

18. BAT British Telecom Bank of America Bank of England BSRIA Benchmarking Group Dept. of Trade & Industry Dept. of Educ. & Employment Dept. of Health & Soc. Security Min.of Agriculture Food &Fish Govt. Comm. Bureau Min. of Defence Salamon Smith Barney Financial Services Authority National Air Traffic Service The Barbican Welsh Development Agency IBM Sun Alliance WH Smith GSK Superdrug Home Office Gilead London Borough of Southwark Zurich Insurance BAE British Airways Kings College London Some organisations benchmarked by the authors of EstatesMaster

19. Rolls Royce Astra Zeneca Royal Bank of Scotland Becta Berwins Birmingham & Solihull NHS BP Chase Manhattan Bank College of West Anglia Corporation of London Cabinet Office Barnet Hospital Kodak Irish Estates Kent CC One-2-One Powergen Rothschilds Royal Mail Post office counters Royal Navy Schroders Simmons & Simmons Shell St.Bartholemews Hospital Wessex water DEFRA Bath College of HE …and some more - by no means exhaustive

20. EstatesMaster building data entry

21. 3 Levels of application • Free - +/- 35% • Level 1 - +/- 25% • Level 2 - +/- 12.5% • Level 3 - +/- 5%

22. 3 Levels of application • Why and where are the differences?....... • ……more questions asked about the cost drivers at Levels 2 and 3.

23. Identifying the scope

24. Questions – Answers and Helptext

25. Answer for Categories

26. Answer for Individual Buildings

27. Levels 2 & 3 – Question Navigation

28. Level 3 Questions • Actual Costs? • Scope? • Quality per scope item? • Detailed resource drivers per scope item?

29. Level 3 Results – 8,000 buildings

30. Benchmark analysis

31. Cost Management

32. Cost Management

33. Group Overview Cost Summary:Actuals v Benchmark

34. UK Canada USA France Germany Italy Spain Eire Netherlands Finland In development Australia New Zealand Nigeria Philippines Current international coverage - EstatesMaster

35. User Commendation • We took our time deciding whether or not to use this tool but now we have it and are deriving benefit, we’re pleased we adopted it. • Large estate owners are highly likely to benefit from software such as this…. • …. it really does make it very simple to derive meaningful benchmarks, control costs and performance across significant and diverse property portfolios.

36. Application Options • Licence only • Licence with permanent call-off consultancy • Licence with introductory call-off consultancy

37. EstatesMaster Web-sitewww.estatesmaster.com

38. Thankyoufor your interest • Malcolm and Jenny are sitting at the back • Please ask either of them if you would like a demo now…. • …or leave your business card for a separate visit.