Category Archives: benchmarking

Is your ‘benchmarking’ actually adding value? It should be by now!

Your current benchmarking….

If you are involved in corporate real estate (CRE) or facilities / workplace management, you are probably involved in benchmarking of space use and occupancy cost at the moment. Probably also environmental data, such as energy use and costs, and wider reporting on other sustainability measures. You may be using a specialist databank or benchmarking company. Or you may be working with other companies in an informal group.

We (at Occupiers Journal limited that is) have invested time in creating a discussion around this subject on Linkedin, called ‘OJ’ occupier benchmarking & data publishing. It is part of our ‘Open’ Group.

The discussion has taken off, with many of the leading benchmarking organisations (and key individual experts) now taking part. Roger de Boehmler, former Director-General of PISCES (now part of OSCRE, the International Open Standards Consortium for Real Estate, the only global e-commerce standards body for real estate) is now working with us as Project Director.

Therefore, as this discussion and ‘programme’ starts to take shape, I wanted to throw in some points to think about…

TIP#1 – What is a “benchmark”, and what is an “average”?

Many groups get this wrong! You may be working with one. Even specialist benchmarking providers misrepresent the difference between a “benchmark” and an average.

A “benchmark” should be exactly that – a mark on the ‘bench’ to show best practice, or best achievable. It should not be just the ‘mean’ or ‘median’ or some other average of a set of numbers. What does that tell you?? Do you aim to be ‘average’??

You should be getting told by your benchmarking provider, what their view is of ‘best practice’, and where you are against this measure. If they are also consultants (as many are) they will probably also be advising you on how to address any ‘gaps’ between where you are now and where you want to be.

TIP#2 – “What” is a start; “Why?” is more useful – quite often a question NOT asked!

Anyone can take a bunch of numbers, put them in a database, and tell you where your ‘numbers’ are against a wider group. Thats the “what”, and it doesn’t tell you much of value….

Your benchmarking group is not being useful unless it can explain “why” one company has achieved figures that appear to be better than the others.

Sadly, I have seen this situation NOT improve for almost two decades now! Why? Because every benchmarking group, or assignment, spends 90%+ of its time getting reasonable comparative data, and only whatever time is left (usually very little) on getting to the real kernel of ‘WHY?’ and ‘HOW?’…the real best practice questions that will help an organisation to actually improve.

One of the key reasons why we have started the ONE database programme. And the reason that we think it will get driven to a successful conclusion – where we can all get access to reasonably good quality data, and spend our time on analysis not on chasing data!

TIP#3 – Don’t accept the benchmarker’s phrase – “this could be because….”

That’s code for “we don’t know, but we guess that….”

Make them work harder to find the answers, not simple assumptions. Its all down to the ‘why’ and the ‘how’ questions above.

Some other serious points for you to challenge:

  1. The drivers of effectiveness (and even efficiency) for office facilities have changed….but many benchmarking groups have not kept pace. The key issue is that space is not used ‘9-5’, or by staff only, or on a ‘one person one desk’ ratio. To measure the effectiveness of office buildings today, we must take account of the Desk Share Ratio (DSR), where DSR= # of people using space / # of useable workspaces;
  2. The DSR measure necessitates understanding how many people use the space in each office, for how long, and how many useable workspaces are there, and how are they used. How does your benchmarking provider deal with this in their data analysis?
  3. We all know that it takes time, and ‘triangulation’ of several bits of data, to work out how many people actually use each building, how frequently, and for how long when they do use it (i.e., quick visit, in for a meeting, or ‘camp down’ for 10 hours?). Are you all doing this consistently?
  4. Many benchmarking groups use measures of “xyz per FTE”, to show “per capita” use of space and facilities. What is the FTE figure? Is it how many people are allocated to use the building (i.e., that is their base)? Or is it an assumption based on number of workstations? Or is it the actual average occupancy on a daily basis? This can vary by 100% or more! Here’s why: at a DSR of 1.2, you could have 6,000 people using 5,000 workstations, but the building average occupancy at say 60%, means 3,000 people use the space daily…6,000 people, 5,000 workstations, or 3,000 average users??
  5. “Cost per FTE” may be accurate in terms of the ‘numerator’ (cost), but can vary massively due to the ‘denominator’ (FTE), due to the later point.
  6. “Sq.m. per FTE” varies on the same basis….!
  7. “Sq.m. per Workstation? OK, as long as everyone is measuring space in the same way, that could be relatively accurate. But, is Sq.M per Workstation very relevant to a mobile workforce such as accountants and consultants? I’d rather have Auditors using comfortable productive space at 12 sq.m. per workstation, at a DSR of 2 or 3, than I would have then crammed into 9.5 sq.m. per workstation with no desk-sharing….size of workstation doesn’t matter, it’s what you do with it!
  8. “Cost per sq.m.” can be fairly accurate and comparable, if you work hard enough at it. But again, I would rather have a high “cost per sq.m.” office being operated over say 12 hours per day, with high levels of desk-sharing and high utilisation of meeting rooms and other spaces, than I would have a low cost building, occupied 9-5 on a DSR of <1, with poorly managed meeting and break-out spaces….

There’s more….we haven’t even got into “service levels versus cost” for each FM service line….! But that will do for now…

I hope this provides some useful material with which to challenge your 2012 benchmarking.

And suffice to say, if you want to do ‘proper’ benchmarking, and want to take these points and others into account, feel free to drop me a line at the email address below. Perhaps we should set up a special purpose company….”The Really Useful Benchmarking Company”, if Andrew Lloyd-Webber has no objections!

Contact me to talk about benchmarking anytime – it IS useful, if it is done properly: paul.carder@occupiersjournal.com

skype: paul.carder.uk

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Agility Ratio: productive benchmark or property target

(re-posted from 26/4/2010)

Office property is expensive – after people, property is the next biggest balance sheet item. In the current climate it is particularly vital that organisations look to minimise fixed property commitments and maximise their space utilisation. Optimising the use of space will support core business in meeting the simultaneous demand for cutting costs and reducing environmental impacts, but it needs to achieve this without reducing (or while also improving) the quality of business outputs.

The office is there to support people and work activity. Indeed much has been written about the impact of the workplace on productivity. Optimising space is not about cramming more desks and people into less space, if you want to ensure a productive workplace. It is more about understanding the capability and suitability of the space to support levels of occupation density, and knowing the workstyles and functions of the people and activity to be accommodated.

Clearly, different buildings have different capabilities. Heating, lighting, ventilation, power and other services impose restrictions on capacity, as do building, planning & fire regulations, legal restrictions as well as technology to support business operations. This is not to say the capability cannot be changed, but this may take some significant investment in structure and infrastructure which will itself impact on existing occupation and use.

Similarly all work should not be considered the same. Sales teams have different requirements to HR or Planning. Consequently defining and understanding these different work functions is paramount to defining accommodation requirements. This has led organisations to breakdown their workforce into generic workstyles which enables appropriate allocation of tools, work settings and space.

To set a target occupation density for a building or an organisation, without first understanding these capabilities and workstyles, is risking not only alienating management and workforce but also providing occupation solutions that are sub-optimal and that could adversely impact on work output and productivity.

Yet this is exactly what some organisations are doing. There seems to be an assumption that there is a one size fits all standard agility ratio – people to desk ratio – of about 8 : 10 that can be introduced or imposed to support a property rationalisation business case, without understanding how, when, or indeed whether this can be achieved, or more importantly, bettered.

Many cases for change and property relocation are based on untested agility ratios. Workstyle profiling and space capability assessments carried out early in the process will provide agility ratios based on real information, which will enable validation or updating of the business case assumptions before commitment and detailed plans are set. Indeed workstyling should be at the heart of any organisations office occupation projects and property strategy.

Property business cases can be developed to deliver new buildings and worksettings to enable agile organisations, but do you understand the underlying people and workstyle requirements? Indeed, have you got a workforce that can take advantage of this investment? Often, the benefits will only accrue as part of an holistic programme, including ICT investment coupled with agile working which also involves people engagement, training, process and change management delivered across the Organisation and its supply chains.

Property may be the catalyst, and provide the initial impetus, creating revenue and capital receipts from space saving. But, the true benefits to the organisation are ensuring that the outcome creates a more effective and productive workforce.

For further reading, see Workstyle Profiling  http://agileorguk.wordpress.com/

Contributor: Paul Allsopp, Managing Director, The Agile Organization

paul.allsopp@agileworking.net

http://uk.linkedin.com/in/paulallsopp

What’s the costa this workplace? $2/hour+free coffee? $2/cup+free seat?

This ‘review’ site lists 20 coffee shops that people have bothered to comment about: Compare Coffee Shops.  That suggests to me that there are dozens more across our towns and cities…so what? Have you sat in one recently? Yes, sure you have…but why? Quite possibly you bought a coffee to make yourself feel less guilty about “camping” in Costa, Starbucks or wherever, with your laptop and phone out on the table…working! Did you actually want a coffee? Maybe, but equally likely you just came out of someone’s office where you already had one or two cups…

The question is, what are you paying for here? $2 for a desk for an hour, with a free coffee? Or $2 for a coffee, and a free seat? I know that I have paid both ways…if you’re a ‘glass half full’ person, you’ll think its a cheap coffee for $1 and you pay $1/hour for the “desk”. Thats not bad value, is it?

So how long before coffee companies just admit this is going on, and set up “business class”…? A “frequent drinker” card (no, OK, doesn’t sound like ‘frequent flyer’), which lets you turn left at the end of the coffee bar in to the business area, instead of right into the ‘normal’ cafe? With a chip+pin, to charge the account back to your company account. And you get larger seats, space to plug in your laptop, perhaps waitress service, etc..? Its gonna happen isn’t it…you heard it here first (unless its already happening – in which case you didn’t…!)

So for the corporate occupier, this is another facilities management operating cost, is it not? Another cost of employee mobility, along with the phone and laptop.

But its far lower cost than most corporate workstations. Especially where these are used by mobile employees in a desk-share arrangement, often at a desk-share ratio (DSR) of 2 or 3+. If a workstation in the office costs $10,000 per annum, thats say $40/day…thats too much coffee for the average person!!

Watch this space my friends….you will have a low cost flexible workplace on every High Street, properly set up for business users, very soon…that won’t Costa too much….