Benchmarking and KPIs: What does good performance look like?
Real Estate and Facility Management is about getting the best performance out of a portfolio of properties and assets. FM managers invest time and energy in benchmarking and tracking Key Performance Indicators. It is the only way to get factual performance measurement and avoid being driven by subjectivity or political agendas.
The challenge is to put the finger on what exactly can be considered as “good performance”.
KPI overload – Having too much of a good thing
Performance targets can range widely:
– Lowering cost of space and services,
– Providing a nice place to work for employees
– Improving brand perception of visitors
– Enabling sustainability, and/or
– Reducing risk
These performance drivers can be measured through hundreds of KPI metrics (click here for inspiration). As a result, FM organisations are drowning in KPI overload, and not sure how to make decisions.
There is no single right answer
The ‘right’ value drivers will vary for each organisation, depending on its needs (which varies by industry). Banks focus on meeting/visitor management and security whereas universities focus on optimising space allocation and tracking assets. Hence, the associated cost KPIs cannot be the same.
FM requirements also change over time with changes in the core business. For example, where a stable service operation focuses on process efficiency, a growing FM group needs to focus on scalability.
Benchmarking is like a drug – tempting, but dangerous
Every company is looking for benchmarks for its FM operations. Many numbers are being used (and abused) to set targets, or to give the team a pat on the back for their current performance.
As tempting as this may be, there is a dangerous side to benchmarking. A simple metric like cost of preventive technical maintenance per m2 can be misinterpreted, based on the definition of m2, or the condition of the technical installations. Even cleaning cost per m2 can vary depending on frequency and quality standards.
Comparing against the benchmark can lead to dangerous extrapolations and erroneous conclusions.
Putting the ‘key’ back in KPIs
Every FM organisation still need to do the hard work of translating the current and future drivers of the core business, to Key Performance Metrics that truly matter for the supporting FM operations. Benchmarking is an important input but should always be interpreted against the specific definition and scope they apply to.
Steven Lambert drives performance by leading the FM advisory practice at MCS.