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Is hourly rate a good rule of thumb?

  • By Christopher Craggs
  • 07 Apr, 2016

What are you really getting for your money?

It’s time to look at maintenance contracts. You’ve put out the tender and have a couple of contenders – how do you decide? Hourly rate? But hold on a minute … What are you actually getting for your money?

There are many examples of variable costings as we go about our daily lives, and on some occasions we are prepared to pay more:

  • Drinks from a petrol station - convenience
  • Car service from the manufacturer – confidence/reliability
Hourly rate seems to be an easy way to make a decision, but scratch the surface. Is it really?

It’s a fact that no company can offer a fully comprehensive, thorough maintenance programme at a low cost without approaching the work at a low level and cutting corners. Buyers focus largely on hourly rate because there is nothing else to grab onto … and perhaps that’s how it’s been sold to them in the past.

Although today’s buyers are working under pressure to reduce costs, this single minded approach doesn’t take into account the depth and level of service that will be received, nor the resulting cost of poorly maintained equipment breaking down or underperforming.

Q: How long does it take to service a piece of machinery?
A: That depends on how well it’s serviced!

What is measured? And what really counts?

  1. A joint discussion should be held between the supplier and the client to agree a budget for any given period.
  2. This budget is then worked to, with any issues flagged up, providing clear visibility of performance.
  3. You should be able to see how and where your money is being spent, and to be able to demonstrate that value to all major stakeholders in the chain. 
  4. Reports (with drill-down visibility on the detail) should support these measures.

Reducing your costs over time

Once a proper maintenance programme is in place, the total cost of maintenance after the initial period often reduces year on year because once the equipment is brought up to standard, it genuinely needs less attention.

Visible, accountable, nothing-to-hide : that’s the Naked Maintenance philosophy
By Christopher Craggs 07 Apr, 2016
It’s time to look at maintenance contracts. You’ve put out the tender and have a couple of contenders – how do you decide? Hourly rate? But hold on a minute … What are you actually getting for your money?

There are many examples of variable costings as we go about our daily lives, and on some occasions we are prepared to pay more:

  • Drinks from a petrol station - convenience
  • Car service from the manufacturer – confidence/reliability
Hourly rate seems to be an easy way to make a decision, but scratch the surface. Is it really?

It’s a fact that no company can offer a fully comprehensive, thorough maintenance programme at a low cost without approaching the work at a low level and cutting corners. Buyers focus largely on hourly rate because there is nothing else to grab onto … and perhaps that’s how it’s been sold to them in the past.

Although today’s buyers are working under pressure to reduce costs, this single minded approach doesn’t take into account the depth and level of service that will be received, nor the resulting cost of poorly maintained equipment breaking down or underperforming.

Q: How long does it take to service a piece of machinery?
A: That depends on how well it’s serviced!

What is measured? And what really counts?

  1. A joint discussion should be held between the supplier and the client to agree a budget for any given period.
  2. This budget is then worked to, with any issues flagged up, providing clear visibility of performance.
  3. You should be able to see how and where your money is being spent, and to be able to demonstrate that value to all major stakeholders in the chain. 
  4. Reports (with drill-down visibility on the detail) should support these measures.

Reducing your costs over time

Once a proper maintenance programme is in place, the total cost of maintenance after the initial period often reduces year on year because once the equipment is brought up to standard, it genuinely needs less attention.

Visible, accountable, nothing-to-hide : that’s the Naked Maintenance philosophy
By Christopher Craggs 07 Apr, 2016
In March a BIM4FM Event was held at the School of Architecture of the University of Greenwich in London. 

The event was mainly oriented around the integration and usage of BIM – Building Information Management – in the FM industry. Several speakers at the event shared their personal experiences, and suggested steps to move forward with successful BIM implementation.

BIM is a widely used, intelligent building software applied within the field of architecture. Several speakers illustrated the potential benefits of usage of BIM within the FM industry, as well as issues that they’ve faced.

The key points were :

  • BIM is a highly intelligent building software that is not only limited to the three dimensional model of the building, but can rather provide organizations with in-depth management information about all assets and service related data: all managed in one comprehensive system. 
  • Currently businesses tend to not properly migrate all information in the handover phase of a new building project, from the architect and building firms to the facilities manager in question. It was clearly expressed that in order to limit and control costs in the long-term, the facilities manager, the FM department, and FM IT infrastructure, have to be involved from the start of the building project. Only then can building maintenance excellence be achieved. Proper BIM integration will make this transition much easier in the foreseeable future. 
  • BIM will most likely be the way future FMs will manage their sites properly. However, at present, the FM industry is lacking knowledge with regards to BIM. This will probably lead to a delay in further implementation of BIM in the FM industry. 
  • Currently, the potential fiscal benefits have not been proven to exist. Possible return on investments will have to be established in order for the FM industry and early adopters to come aboard. 
  • Third party integration for service providers is, at this moment, not standardized yet. There is however a way of exporting and importing data into BIM and CAFM systems through the use of COBie XML data. Due to the current high chance of customization of this standard by major FM companies, it will be hard to migrate existing data into the appropriate formats. It is for the FM industry to create a standard and demand this information. The timeframe associated with this implementation is likely to be around five to ten years. 

There is most certainly potential to implement BIM related data structures. It will however take some significant amount of time before FMs are likely to demand this kind of service. 

Further information in relation to BIM and COBie XML data is available in the following documents:
• PAS 1192-3:2014
• BS8536-1:2015
Alternatively you can visit: https://goo.gl/qNV9yU

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