Facilities Management An Australian Perspective

1. Facilities Management An Australian Perspective

2. Agenda Background FM Industry in Australia Optimizing performance through effective service delivery and asset management strategy Case Studies Questions / discussion

4. Tungsten Group Strategic and operational focus 170 staff $40m turnover Niche market

5. Key Clients JP Morgan Chase Lucent Technology Reuters BHP Billiton Water Corporation of Western Australia Yarra Valley Water

6. History of Tungsten Group 1996 – Established in Australia as Symonds Facilities and Project Management. 1999 – 100% ownership by Dalkia ($40 billion Vivendi Group). 2000 – 75% management “buy in”. 2001 – Divestment of loss making / non-strategic parts of Australian / New Zealand business, e.g. Recruitment and Logistics. Focus on FM. 2002 – 100% full management “buy out”. 2003 – Restructure of business with regional focus. 2005 – Acquired by Programmed Maintenance Services (PMS).

7. Who is PMS? The business was founded in 1951. Floated on the ASX on 1st October 1999. Projected turnover 2005: $240m An integrated property maintenance business, maintaining a large range of facilities. Currently maintain 60,000 buildings and structures for over 4,500 customers, throughout Australia, NZ and the UK. Branch office network in Australia (30), NZ (12) and UK (5). Over 2,000 employees. Infrastructure services including alliance and partnering solutions.

8. Market Position – Facility / Infrastructure Management Services

9. USA / Australia Comparison

10. USA / Western Australia Comparison

11. Key Statistics USA Australia WA Land Mass (sq km) 9,161,923 7,692,030 2,500,000 Population 295,734,134 20,402,954 2,003,800 GDP $11.75 trillion $611.7 billion $89,155 million

13. FM Industry in Australia FM industry evolved during 1980’s Widespread outsourcing of business activities Management and maintenance of buildings No clear industry identification

14. Contribution to Economy $12.4 Billion to GDP = 1.65% of Australia’s GDP Employs 172,000 persons (2002-3) = 2.1% of Australia’s workforce

15. Australian GovernmentFacilities Management Action Agenda Aim: To develop a strategic framework for the growth of a sustainable and internationally competitive Australian Facilities Management sector. Support: Australian government has financially and operationally supported: Strategic Industry Leaders Group to develop the Action Agenda Implementation Group.

16. Objective To gain an understanding of the Facilities Management industry and its contribution to the Australian economy.

17. Vision The Facilities Management industry will be the foremost contributor to a productive and sustainable built environment through excellent and innovative management of facility services.

18. 5 Focus Areas Facilities Management in Australian Economy Innovation Education and Training Regulation Sustainability

19. Facilities Management in Australian Economy Gathering of more effective data Annual update of FM industry contribution to the economy

20. Innovation Promotion of innovative culture and bringing innovation quickly to the market place Establishment of FM innovation forum Establishment of web portal

21. Education and Training Working with training sector and universities to increase availability of FM courses Focus on FM as a career for school leavers

22. Regulatory Impediments Raise awareness of three key areas: Asbestos Emergency evacuation plans Cooling towers Consultation with industry Conformity of requirements

23. Sustainability FM industry can influence decisions to produce lower environmental impacts Industry forums Use of web portal to disseminate information Development of business case model to highlight costs and benefits of sustainable practice

24. Implementation Appointment of implementation group 20 actions identified Three year program Awareness program Industry working with Government to identify opportunities and raise awareness of the FM industry

26. Building an Asset and Facilities Management Strategy that Aligns with Corporate Goals and Service Delivery Objectives.

27. Planning Process Vision & Mission Objectives Corporate or Government Priorities

28. Service Delivery Strategy Outcomes

29. Service Delivery Strategy Translates broad objectives into specific services Identifies level of service required and performance criteria Balances service delivery outputs with resource inputs Without a service delivery strategy, project definition can be an expensive guess Poor project outcomes or late delivery can be related back to inadequate service delivery planning Focus on the service delivery first and then define how it is supported

30. Service Delivery Strategy Ensures: Services are aligned with outcomes Resources are aligned with services they support No services are planned that cannot subsequently be resourced Service delivery options evaluation and alternatives considered Assumptions are challenged Long-term focus Reliable base to build asset plan

31. Service Delivery Strategies - Issues Critical to do before Strategic Asset Management Plan Identify and gather all existing data / documents on Service Delivery and Business Planning Obtain commitment from Senior Executive / CEO and management team Consultation with relevant management and stakeholders Draft document from existing data for review and refinement in workshops Identify ways to manage demand to reduce asset requirements

32. Asset Strategic Plan Alignment of asset portfolio with service delivery requirements Whole of asset life approach Integral part of strategic and operational planning Funding opportunities - including Public Private Partnership 5 – 10 year horizon

33. Asset Scope Buildings Infrastructure Roads Foot paths Drains Sewers Major Equipment Vehicles Plant & Equipment Equipment Classes

34. Asset Plan Components Overview of service demand Identification of assets required for service delivery Deployment, condition, capacity and performance of existing assets Gap analysis Asset strategies Environmental and energy management Risks of acquisition and management Risks of assets failing to perform Asset management improvement process Funding opportunities

35. Asset Strategies New Assets Refurbishment Renewals Operating and Maintenance Disposal Non Asset Solutions

36. Understanding of Existing Assets Critical for gap analysis Comprehensive understanding required

37. Asset Performance Measurement Functionality – Do planned and actual functional specifications support service delivery? Condition – Is asset maintained in the condition required to effectively support functional specification? Utilization – Is level of utilization effectively supporting service delivery? Compliance – Does it meet regulatory requirements? Location – Is the asset in the correct location to provide effective service delivery? Financial – How do actual operating and maintenance costs compare with the asset investment plan?

38. Asset / Facility Analysis “Spider Graph”

39. Asset / Facility Analysis “Spider Graph”

40. Data Gathering Questionnaires to facility users Site visits Condition Surveys Financial data

41. Strategic Asset Management Plans - Issues Site visits “Buy in” by stakeholders Discussions with site managers Include wide range of personnel Discussions with responsible executive and stakeholders Draft document and findings for workshop review Group asset into logical groups Leased assets Equipment assets

42. Facility Plan Components Description and History Service Capacity Functionality Location Utilization Condition Compliance Valuation Link to Service Delivery Strategy Service Demand Useful Life Strategy for Future Use Operating Budget and Costs

43. Facility Plans - Issues Group into like facilities Link to management database information and systems Ensure process in place to update

45. Case Studies

47. Police, Fire & Emergency Services Department of Justice (Courts & Correctional Facilities) Department of Business, Industry & Resource Development (Minerals, Energy, Primary Industry, Fisheries, Trade Development) Scope Service Delivery Strategy Strategic Asset Plan Facility Plans Key Aspects Buy-in at executive level Workshops and stakeholder consultation Community involvement including volunteers Cross department opportunities Remoteness Cultural differences Resources – People Changing nature of service delivery – Correctional Facilities – Police Northern Territory Government Agencies

48. Queensland Transport South East Busway Scope Service Delivery Strategy Strategic Asset Management Plan Key Aspects Rapid bus transport in major city 13 stations on 15km busway Joint agency management Key community social and economic importance Queensland Department of Main Roads

49. Water Corporation CORPORATION BACKGROUND Area Covered 2.5 million km2 No. of Users / Clients Population of 2 million to 230 cities and towns. This includes 48,000 businesses and 350 industrial / resource companies. Scope of Services Water Wastewater Drainage Asset Portfolio Over 6,000 parcels of land Over 6,000 easements Asset Value Approx. $6 billion

50. Scope of Tungsten Involvement Development of strategic asset plans for each facility Comprehensive condition audit Defect identification and costing Useful life DDA and OH&S Hazardous materials Link to service delivery strategy Risk management Preventative maintenance program Development of framework and performance requirements to outsource FM

51. Benefits Effective allocation and management of scarce resources Identification of optimal asset stock Risk management focus Logic based process Common basis of comparing asset needs, both existing and proposed Minimises political influence

52. Summary Commitment to process – time and people Build SAM into business planning session Some personnel see as a risk Update – rolling 10 year plan Management buy-in essential Broad input by employees Skills development Establish steering committee for direction, review and driving internally Share outputs to obtain full buy-in Resources required Internal External Consultant

54. Questions & Discussion