Total Facilities Management Company (TFMC) is the largest facilities management company in South Africa, providing integrated facilities management that minimises costs “through forward looking performance-based risk and maintenance strategies”. We talk to managing executive Cornelius Van Der Merwe.
Writer Ian Armitage
Project manager Stuart Shirra
Facilities management is a critical, strategic business discipline with organisations the world over increasingly occupying complex buildings and using sophisticated technology for communications and control. Professional FM is needed to plan, maintain and manage such facilities. It is part of the drive to meet the higher demands of organisations and Individuals – we all have high expectations and good facilities management can deliver flexibility, adaptability and sustainability.
Nobody understands this better than Total Facilities Management Company (TFMC). In South Africa you don’t get bigger than them.
“Facilities Management is so integrated in our lives that we don’t realise how many times a day we actually engage in and experience facilities management,” says managing executive Cornelius van der Merwe. “We are surrounded with our work environments for most of our days and almost everything we touch during a day is part of the facilities that support our core businesses. Think of the amount of times you touch doors, chairs, tables, flooring, ablution facilities and so many other not so obvious things like lighting and air conditioning not to mention the power we utilise at the various outlets where we require it.”
Many companies have the perception that facilities management is merely the maintenance of their buildings which can be done through the use of individual contractors.
They normally assign these responsibilities to a willing employee who are good at organising.
It is then expected of this individual to have a list of contractors for the different basic services like air-conditioning, electrical, general infrastructure maintenance and maybe for their access control system.
According to van der Merwe, facilities management typically become “only a cost to the company and no additional value-add is received other than the direct services that is rendered through each order placed”.
“Little or no management of these contractors takes place as the responsibility to assess the success of the individual work done is then bestowed on the receiver of the requested service only,” he says.
“Companies end up reviewing these costs annually in an effort to see how they can reduce it due to it being experienced as a pure cost hitting the bottom line with no apparent return on investment. This is of course making the assumption that the company can identify these costs separately as the individual work requests are normally requested and funded through a general budget line under individual managers’ budgets grouped together with various other general expenditure items. This results in poor or understated facilities management cost visibility which are extremely difficult or at least requiring a lot of effort to collate a cost which represents the associated facilities management cost.”
Van Der Merwe says when it comes to selecting a sub-contractor, it is normally done by employees who, “knows someone that either runs such a business or work for a company that deliver those types of maintenance or similar services”. He says that, at best, “the procurement division is tasked to source service providers who generically deliver these services without conducting any or limited technical capability assessments on these service providers”.
“It becomes a numbers game and contractors need to compete many a time on cost which then results in service quality of a mediocre standard,” he says. “Service requests relayed to contractors are normally done through a phone call and it is then expected from the contractor to generate what they believe the scope of work should be based on the provided information or after meeting the requestor on site to understand what they require. A proper scope of work which includes warrantees, standards, material specifications as well as health and safety requirements are not clearly noted.
This puts many companies at risk of an increased cost due to inferior work or materials provided and rework that is then required within a short space of time, normally just outside the normal three month warrantee on workmanship which is provided as a standard. When a couple of quotations are requested it is many a time difficult to do a proper technical and cost comparison of these quotations due to the very nature they are acquired. Contractors present their quotations in the way they believe the best way is or how they normally do their pricing based on their pricing methodologies and or billing methods. It is then almost impossible to compare the different quotations properly hence the importance of understanding the required work upfront drafting a proper scope of works and expecting the various contractors then to provide quotations in line with the requirements.
A proper technical and financial comparison can then be done resulting in a final order placement which is exactly aligned to the expectations and the requirements. This has a direct impact on cost as work is then done correctly the first time and if proper quality assurance is done will last the expected lifetime as well.”
“We have an integrated FM solution which is enabled and supported by a strong ERP system (SAP) and allows us to continuously deliver value to our clients in terms of cost reductions by optimising the use and operational parameters of facilities,” says Van Der Merwe. “We have built up Intellectual Property over many years in various technical fields which we fully utilise in the management of our clients’ facilities. Through this approach we do not only deliver tangible cost reductions but reduce risks facilities pose to our clients’ business significantly while looking after and optimising asset life cycles.”
But why is that important? “Space utilised by companies are in most instances one of the biggest line items on any company’s expense sheet,” Van Der Merwe answers. “This is where FM companies add a lot of value. Understanding the company’s operational requirements, workflow for normal operations are mapped out and with many years of experience in site layouts are re-designed in such a way not only to minimise work execution but optimise the space requirements. Types of furniture used can have a tremendous impact on space requirements and special care is taken to select and or propose furniture which is conducive for the environment and type of work that is require yet enable the floor space requirements to be minimised. This has a direct impact on the bottom line due to the significance of the cost of space.
“Another significant component for most companies is their energy bill together with rates and taxes and water consumption,” he continues. “With our building management and control systems approach we measure the energy consumption on a small enough timing frequency to provide consumption data from where we determine the exact usage profile of the building or facility. Depending on the electrical reticulation layout of the building this is done to sub system level in order to influence energy demand and consumption at the point of use. This is not only then utilised to lower the energy consumption but is used to determine what the maximum demand of the site is. By having visibility of energy consumption the building manager and or client can influence demand and create immediate savings to the bottom line. In many areas where available power is limited and the company have urgent growth demands this approach in energy management creates growth opportunities without costly new or upgraded energy connections as energy capacity is created and immediately available to support the growth requirements.”
Van Der Merwe says reporting is one element that “successful facilities management companies” like TFMC “spend a lot of energy on” as well as “direct many hours of thought to”.
“When an FM company manages the facilities as a whole many key fields of data are collated daily, which is transformed into management information,” he says. “This information are then analysed from different perspectives to ensure the client’s key business drivers are supported. This is where a lot of value-add to any organisation are delivered and literally creates many millions of rands savings and or value add to our clients. Systems need to be integrated in such a way that data fields are captured or automatically fed only once through the entire value chain of service delivery which is then efficiently utilised for the required reporting and business analysis.
“Supporting functions are provided as part of the service delivery model which doesn’t only include the typical supporting functions behind the scenes like Human Capital, Finance, IT, Procurement Services but a 24-hour service centre support business critical requirements after hours. From this centre in our environment known as the Contact Centre all calls are received, captured and actioned. Workflow management is utilised to keep the client informed of his or her call request progress and status which is automatically generated as the service progress through its delivery steps until final completion where the client has an option to rate the service or even reject the service if it was not delivered to expectations. Due to the criticality of energy availability of many of our clients we have a full building control centre from where critical elements are monitored like power availability, temperature levels as well as lift and fire panel alarming. From the building control centre our field technicians which is located all over South Africa is despatched electronically through their handheld devices and or per telephone. Information captured on the handhelds are then relayed to our back-end system which provides timely status updates of the workflow. Due to the many power interruptions experienced and the significant impact these could have on our client sites we have a fairly large pool of diesel back-up generators (176) which is deployed to various sites.
We then manage the refuelling of these generators through our own fleet and mechanical equipment like diesel bowsers. This is extremely value adding to our clients giving them peace of mind that they can focus on their core business while we as facility managers ensure availability of the facilities to conduct business efficiently.
“What’s more, as part of an entire end to end lifecycle facility management approach we have an entire Design and Project Management division from where we manage all facility management and other specified assets for our clients. We do business requirement assessments and draft business cases for our clients which they then evaluate not only from a return of investment point of view but an entire risk management and strategic investment point of view as well. The Design services range from Architectural Services, Civil Engineering, Mechanical, Electrical and Electronic Engineering to Quantity Surveying which enables us to deliver services as a one stop shop. To manage capacity and
required turn-around times we have strategic partnerships with key design houses which forms an integral part of our business service offering.”
Van Der Merwe stresses FM will not be complete without “managing the clients’ property portfolio appropriately”. It is easy to see why TFMC is such a huge success and why it a “cornerstone” of Mvelaserve, the empowerment provider of outsourced business support services in southern Africa.
“It is always good to have a “big brother” so to say in order to support a business in terms of diversity,” says Van Der Merwe. “The FM market is a tough market to be in due to the many perceptions in the market of what FM entails. Being part of the group which owns 100 percent of TFMC it provides the group in its totality the diversity we need to be a sustainable business. TFMC together with Protea Coin are indeed key to the Mvelaserve Group and play a vital role in the group’s success hence our focus of diversifying and growing our business.”
And the business is performing steadily, experiencing some growth over the last 12 months, although not nearly what “we hoped to achieve”. “The FM industry is a tough business from a margin point of view to be in as well from a point of view of what value a FM company bring to the table other than the services it delivered,” Van Der Merwe says. “One of our key highlights through the year was that we successfully acquired FM services for a part of Standard Bank but unfortunately had to walk away from another fairly sized contract due to it just not being economically feasible. That is always heart-breaking as the value from FM only become apparent after some time in the contract. When the data collocation starts showing clear trends it is then when benefits start flowing back to our clients. The clients that understood this and allowed us into their business have experienced this wealth of value on a continuous basis.”
Despite that blow, there have been other achievements. “Successes are mostly within our current contracts where one is able to deliver value-add to our clients over and above the direct services they pay you to fulfil,” Van Der Merwe continues “It is extremely difficult to sell FM to a company which has not experienced the true value add of a FM company.”
The FM industry is under tremendous economic pressure and without exception TFMC ‘s clients demand more for less. The challenge is delivering more value at reduced costs on a continuous and not only on demand bases. Margins are under pressure which is not assisted by labour, fuel and energy costs which are on the rise.
It has TFMC concerned.
“A perfect storm is brewing in the FM industry and only the companies that are truly innovative in design and structures to deliver services in the most efficient ways will survive,” Van Der Merwe says. “TFMC at this stage is performing well and continuously reinvents itself to adapt to the changing market conditions. Our first priority and aim is always to retain our current contracts and to grow both within these contracts as well as in new areas. Due to the tough market conditions currently we aim at growing our revenue marginally but sustainably.
“We are excited about the investments Bidvest is currently making into Mvelaserve which could present us with new opportunities within the group and there are numerous opportunities in the market for us and are participating in various bids for new business. The challenge however remains for any FM company to price itself attractive enough in order to enable it to start delivering value add over and above the direct services.”
Having many years of experience in the ICT arena, with a vast skill base, means it is one area Van Der Merwe would like to see TFMC grow as well as “banking markets or any business which requires strong technical background and support knowledge”.
As FM is seen as a cost it is the first budget line, life will always be challenging but TFMC is more than up to the task.
To learn more visit www.totalfmsolutions.com.