We use Benchmarking extensively and the following are a number of ways that clients have benefitted from this service.
UK Utilities Business
A UK Utilities Business were seeking to understand whether their current service provider was offering good value for money because they were looking to extend the contract rather than going to market. The perception was that the supplier was providing a good quality service but we were asked to assess quality against market norms and benchmark their costs to determine whether the cost was likely to be improved upon by the FM market generally.
It was found that there were areas for improvement related to quality and very high management and maintenance costs. A plan was established with the incumbent supplier; a further review 12 months later showed that the plan had been achieved saving in excess of £1m per annum and also saving the significant costs of re-tendering.
A significant exhibition business was seeking to reduce operational costs. We were asked to benchmark the current providers to ascertain where cost reductions should focus and also to identify whether any costs were significantly out of kilter with the FM market. A review demonstrated that both suppliers under review were currently providing good value for money. There were minor opportunities to improve overhead and profit and tweaks to the service. However most of the further savings were achieved by rationalising client resources as there was significant management overlap at an operational level with the supplier organisation creating significant inefficiencies.
Benchmarking Fire and Rescue Services
Five UK Fire and Rescue Services (FRS) were looking to work together to understand the relative performance of their estate. We supported IPD to identify the key measures that need to be made regarding property, FM and workplace characteristics. The aim of the study was to measure the comparative efficiency and effectiveness of FRS properties across their entire portfolios. For the five FRS the following opportunities were identified
Space reduction (or space made available to partner organisations) would be c 7,000 m² net internal area (NIA)
Based on the average cost per m², property costs would reduce by c£1m.
If the cost and space savings were combined i.e. space per person reductions and cost per m² savings were achieved, this would equate to savings of nearly £21 million.
If the average energy consumption per m² were achieved by all participants in the pilot, this would result in energy savings of approximately 4,100,000 kWh per year.
The benchmarks from the study were used by each FRS to identify their own operational portfolio plans to support the cost saving initiatives required at the time.
International Software Business
A Software business was undertaking a global tender but due to the nature of FM expenditure across the countries it was difficult to calculate the likely FM spend and therefore assess whether FM bids being provided were offering good value for money.
We helped set up an internal benchmarking model to compare and extrapolate known costs. At the same time, we used external benchmarking data to construct a cost model for the whole estate for the services required.
Both of these models were used to check and challenge bids from the FM market which enabled more robust bids to be achieved and re-assurance to appoint the preferred bidder knowing that there were limited opportunities for significant gaps to appear in the cost model in the future.