FM & Real Estate industry must review its practices to avoid continued degradation in standards dealing with building lifecycle management
June 14, 2022

By Tariq Chauhan, Group CEO of EFS Facilities Services Group.

 

The FM industry must review its practices, looking at the continued degradation in the standards dealing with lifecycle management of assets. Unfortunately, this is not an issue in the region, but globally this is the state of affairs. In the process of finding the root cause issue, many stakeholders share the blame, and this global apathy greatly reflects on real estate industry challenges. This is not due to one or two failures, but each stakeholder has its share in this mess. For the FM industry, it is not fair to leave this only to client organizations as most of its key specs must be encrypted in the core FM practices and its key result areas, especially in managing the Hard Services maintenance regimes.

Undoubtedly, significant aspects of effective lifecycle management lie with FM’s key deliverables. It is common for FM players to attribute its ineffectiveness purely on client organizations for not addressing its critical needs and not providing for the intrinsic cost of managing this in the tender process. This is partly correct, as these days, such considerations are rarely considered in the RFP stages. There is a lot of debate in this context as there are too many anomalies in dealing with this issue. I am really appalled by this sordid state with continued degradation in building conditions and the sight of dilapidated structures all around us with inflated costs of future maintenance. These conditions continue to haunt the built environments with the poor state of buildings at every nook and corner.

It is not sufficient to blame the usual suspects, be it maintenance regimes, builders, landlords, service provider fees, or end-users, but to add regulators to this list is appropriate as the role of these regulators is indeed under the scanner. Their role needs to be strengthened with lot more regulations, from building permits to future maintenance guidelines.

It is everyone’s matter to protect the assets’ longevity and ensure effective lifecycle management. For instance, the FM service provider must bring efficiency in maintenance regimes and reduce their usual woes to end-users. It helps in their asset longevity, reduces risks in future cost escalations to landlords in asset appreciation, and brings transparency in managing their future costs with better monitoring. Above all, the regulators in overall sustainability and higher safety must prevent conflicts between builders, tenants and building owners, including effective disaster management.

However, the moot point is what is missing. The critical issue is strengthening the building regulations at the building permit level to ensure sufficient maintenance considerations while approving building permits and completion certificates. I applaud that in Dubai, DEWA and DDA have established the lead in taking many steps that cover these points. However, a lot remains to be seen, and more so, minimum thresholds need to be earmarked based on building assets costs for every annual FM spent towards lifecycle management of assets. This must be clearly stipulated in the regulations and not leave any room for smart tactics to circumvent these. This is very common for people to avoid these to save costs. Even the client finance organizations need to rise to ensure better controls to address these anomalies. I continue to see very insignificant controls to manage these costs in clients’ ERPs and very little engagement of finance to manage these. Globally, I know this issue in most client organizations in dealing with FM budgets. Most financial systems do not have a clear demarcation between OPEX and CAPEX as there is no clear demarcation between these data points. Also, the operational data is not always correlated to financial data on maintenance.

The labour and materials costs are not categorized and the same with thresholds on spare parts between OPEX and CAPEX items. The baseline budgets are mostly irregular as these do not reprint the real FM spent. Even benchmarks erroneously arrive. Therefore, client organizations must align these anomalies and build adequate ERPs controls and provisions to provide for them. It will also require that these create effective interfaces with their CAFM system so that the two systems capitulate all the requisite data. A powerful FM outcome can be achieved if these gaps are appropriately addressed. It is not assuring the asset longevity but reduces FM cost with much higher benefits to all stakeholders.

 

Source: Work Life Mantras

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