Value Proposition canvas- Customer needs and pains
Fm Expo 2013 Presentation
1. Central Bedfordshire Council www.centralbedfordshire.gov.uk
Service Management in FM
Keith Fraser
Head of Facilities Management
2. Central Bedfordshire Council www.centralbedfordshire.gov.uk
Central Bedfordshire Council - Context
• Created in 2009 as a Unitary Authority following the
Government’s invitation to Local Governments to make
consensus-based proposals for re-structuring
• Formed from a merger of Bedfordshire County Council,
Mid Bedfordshire and South Bedfordshire District
Councils
• Bedford and Luton Borough Councils remained out of
scope of the new CBC and became Unitary Authorities in
their own rights;
3. Central Bedfordshire Council www.centralbedfordshire.gov.uk
Central Bedfordshire – Facts and
Figures
• Covers an area of 276 Sq Miles
• Population of 255,600
• Mostly small towns and villages with the exception of the
larger conurbations of Leighton Buzzard, Dunstable, and
Houghton Regis which make up over 50% of the
population of CBC
• Portfolio of 148 sites including 3 corporate offices, some
smaller mixed use offices, libraries, community centres,
care homes, schools and farms
4. Central Bedfordshire Council www.centralbedfordshire.gov.uk
Legacy Issues
• Contracts initially vired across from forming councils into
new Authority, not all of which geographically co-terminus
• No consistency of either T&C or specification therefore
quality and cost impossible to manage
• Piecemeal supply chain with management cost inefficiency
• Early attempts to enter shared service arrangements less
successful than predicted
• Budgets fit cost of vired contracts not necessarily cost of
service delivery
5. Central Bedfordshire Council www.centralbedfordshire.gov.uk
Commercial Delivery Strategy
• Consolidate supply chains into “CBC” contracts that reflect
the new Authority
• Reduce the number of contractors to 1 per service line
• Gain economies of scale & reduce management costs
• Drive uniformity of standards of service delivery
• Capture nature of estate flexibility
• Deliver a quality service throughout the estate
• Support the developing “Corporate Landlord” model
6. Central Bedfordshire Council www.centralbedfordshire.gov.uk
Challenges
• This will bring about a culture change as well as a process
change
• A change in Process = A change in Behaviour
• Mismatch in the perception of the appetite for Risk
• Fewer, bigger contracts introduces a risk of non-conformity
on a larger scale
Low Risk High Risk
Perceived Risk Actual Risk
7. Central Bedfordshire Council www.centralbedfordshire.gov.uk
Law of Conservation of Energy:
Energy cannot be created or destroyed, only transferred from
existing in one form to another
8. Central Bedfordshire Council www.centralbedfordshire.gov.uk
My First Law of Commercial Risk:
Risk cannot be created or destroyed, only transferred from
existing in one form to another
9. Central Bedfordshire Council www.centralbedfordshire.gov.uk
Managing the Commercial Risks
• Must have a mechanism to manage performance and
behaviour
• A link must exist between performance and profit
• Performance must be measured against 100% compliance
to the spec
• If the contractor is to take on the bulk of the risk there must
be levels of tolerance that reflect the real world
• Aim to drive contractor behaviour towards continuous
improvement
• Promote gain share and KPI deficit recovery through over-
achievement
10. Central Bedfordshire Council www.centralbedfordshire.gov.uk
Service Credit Scheme
• Based on dividing the declared monthly profit margin by a
set number of Credit points
• A KPI based on a part of the output specification has a
weighted Credit Score attached to it
• Failure to meet the KPI triggers the Credit Score which is
collated on a balanced scorecard
• Each month the Credit Score is applied to a repayment to
the client as a form of LAD for non-delivery
Performance
Measure
Penalty
Points
Frequency Comments
80% (4 of 5) of inspected
floor areas meet
specification per week.
15 Per
Instance
5 Floor areas to be inspected after
cleaning and before use per week.
11. Central Bedfordshire Council www.centralbedfordshire.gov.uk
Service Credit Scheme - Tolerances
• LAD Payments not triggered until a threshold is breached
• Individual KPIs have a degree of tolerance before Service
Credits are applied
• Over-achievement can allow contractors to recover lost
ground
• Scheme is flexible and can be tightened/loosened in
consultation with contractor
12. Central Bedfordshire Council www.centralbedfordshire.gov.uk
Conclusions
• Contracting out is a good way of reducing non-core costs,
but comes with risks
• Those risks are based in contractor behaviour and
alignment with your business needs
• The more risk you transfer the more cost you can incur
• Organisations carry more risks than they believe they
have an appetite for
• Therefore a shared risk management approach can work
• Risk share can be based on outputs and managed
through KPIs
• Contractors will buy in where they see a balance between
risk and reward
