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

ContentsContents

• 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

What is EstatesWhat is EstatesMasterMaster??

• 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.

Current modulesCurrent modulesWeb-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

What is it used for?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

Who uses it?Who uses it?

• Estate owners• Service Providers• Managing Agents• Educationalists

Challenges to financial benchmarkingChallenges 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

International challengesInternational challenges

• Understanding the local labour market• Cross-border cultural differences• Language barriers

EstatesEstatesMasterMaster model model – – the principlesthe principles

Unit cost - per sq m / per capita etc.

BusinessDrivers

OutputPerformance

FunctionalRequirements

FacilitiesPolicy

1.Service LevelDrivers - Quality

Staff

Equipment

QualityControl

Specificationof Works

2.

Consumables

Service LevelDrivers -Local Factors

Specificationof Regime

Frequency

Time of Day

3.OperationalDrivers

Access

Design

Occupation

Problems ofOperation

4. 5.

How Much /How Many

QuantitativeDrivers

Volume

Areas

Head-count

Economic Drivers

6.

Macro-

Micro-

£

7.

TotalCosts

Problem of identifying Problem of identifying scopescope of activities of activities

Site A Site B Site C Site D Site E Site F

Occupiable areasSpecial areasToilets and washroomsFurniture and equipmentPest controlGeneral wasteSecure waste

Cost / £ m² GIA pa 15 9 9 12 7 8

Ext.WallsWindows

Cleaning scope and cost differentials - same service levels and drivers

ActivityIncluded / excluded from budget

How does it work ? – granular benchmarksHow 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.)

How does it work ? – granular benchmarksHow 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

How does it work ? – granular benchmarksHow 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. mor£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

EstatesMaster Results GraphicEstatesMaster Results Graphic

Granular analysis – E.g. SecurityGranular analysis – E.g. Security

Where does the data come from?Where does the data come from?

• Consultancy benchmarking studies• EstatesMaster surveys• Due diligence for service providers

How is the data used?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.

Some organisations benchmarked by the authors of Some organisations benchmarked by the authors of EstatesEstatesMasterMaster

• 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

……and some more - by no means and some more - by no means exhaustiveexhaustive

• 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

EstatesEstatesMasterMaster building data entry building data entry

EstatesMaster Buildingcode

Building name

Category No.of storeys

(av)

GIA m² Av. W idth m

Average storey ht.

mANS-AA-001 AA-001 WSI 1 9963 3 5ANS-AA-001#2 AA-001 OA 1 431 12 3ANS-AA-002 AA-002 WSI 2 8186 30 5ANS-AA-002#2 AA-002 OA 2 484 12 3ANS-AA-003 AA-003 WSI 2 5998 30 5ANS-AA-003#2 AA-003 OA 2 472 12 3ANS-AA-004 AA-004 WSI 1 10778 30 5ANS-AA-005 AA-005 WHG 1 4520 15 5ANS-AA-006 AA-006 WHG 1 1527 15 5ANS-AA-006#2 AA-006 OA 1 485 12 3ANS-AA-007 AA-007 WSI 1 3526 30 5ANS-AA-007#2 AA-007 WHG 2 1618 15 5ANS-AA-008 AA-008 WSI 1 14018 30 5ANS-AA-008#2 AA-008 OB 1 612 10 3ANS-AA-010 AA-010 WHG 1 262 15 5

3 Levels of application3 Levels of application

• Free - +/- 35%• Level 1 - +/- 25%• Level 2 - +/- 12.5%• Level 3 - +/- 5%

3 Levels of application3 Levels of application

• Why and where are the differences?.......

• ……more questions asked about the cost drivers at Levels 2 and 3.

Identifying the scopeIdentifying the scope

Questions – Answers and HelptextQuestions – Answers and Helptext

Answer for Categories Answer for Categories

Answer for Individual BuildingsAnswer for Individual Buildings

Levels 2 & 3 – Question Levels 2 & 3 – Question NavigationNavigation

Level 3 QuestionsLevel 3 Questions

• Actual Costs?• Scope?• Quality per scope item?• Detailed resource drivers per

scope item?

Level 3 Results – 8,000 Level 3 Results – 8,000 buildingsbuildings

Benchmark analysisBenchmark analysis

Cost ManagementCost Management

Cost ManagementCost Management

Group Overview Cost Summary:Group Overview Cost Summary:Actuals v BenchmarkActuals v Benchmark

Current international coverage - Current international coverage - EstatesEstatesMasterMaster

• UK• Canada• USA• France• Germany• Italy• Spain• Eire

• Netherlands• Finland

In development• Australia• New Zealand• Nigeria • Philippines

User CommendationUser 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.

Application OptionsApplication Options

• Licence only• Licence with permanent call-off

consultancy• Licence with introductory call-off

consultancy

EstatesEstatesMasterMaster Web-site Web-sitewww.estatesmaster.comwww.estatesmaster.com

ThankyouThankyou for your interestfor 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.