20151603 Report MHMthesis Jigar 01

2015

Facilities Management | Service Quality Indicators

AUDITING SYSTEMS FOR COMMERCIAL BUILDINGS IN INDIA

JIGAR CHAVDA

GUIDED BY: PROF. NIMITT KARIA

Master of Habitat Management

CEPT University, Ahmedabad


P a g e 1 | 21

Contents

1. INTRODUCTION ............................................................................................................ 3

What is the thesis about? ................................................................................................. 3

What is Facilities Management (FM)? ......................................................................... 3

What are FM Service Quality Indicators? ................................................................... 3

Why an Office Buildings / Commercial Buildings? ................................................... 3

How will the thesis help in improving the current state of facilities? ................. 4

How will FM service quality indicators help? ............................................................ 4

What is the future scope and benefit of the thesis? .................................................. 4

Current Setting ................................................................................................................... 4

2. Thesis question: ............................................................................................................. 5

3. Objectives: ....................................................................................................................... 5

4. Scope: ................................................................................................................................ 5

5. Research methodology: ................................................................................................ 6

Literature review:.............................................................................................................. 6

Data collection: .................................................................................................................. 6

Data analysis: ..................................................................................................................... 6

6. Literature Review: ......................................................................................................... 7

What is Facilities Management? .................................................................................... 7

Need for facilities management ................................................................................. 8

Key components of facilities management ............................................................. 9

Benchmarking and KPIs in facilities management ................................................. 11

Benchmarking: .............................................................................................................. 11

Types of benchmarking .............................................................................................. 12

KPIs ................................................................................................................................. 12

What is a Balanced Scorecard? .................................................................................... 14

What is a building rating system? How is it useful? What does it do? ............... 15

Building Research Establishment Environmental Assessment Method

(BREEAM) ..................................................................................................................... 15


P a g e 2 | 21

Leadership in Energy and Environmental Design (LEED) ............................... 16

DQI- Design Quality Indicators ................................................................................ 16

Framework for DQI ..................................................................................................... 17

The stages in which DQI is used: .............................................................................. 18

Format of the rating: ................................................................................................... 19

Insights from the case study: ....................................................................................20

Understanding the current Communication Channel to buy an office space .. 21


P a g e 3 | 21

1. INTRODUCTION

If one has to understand the thesis one must know what the basic aims and objectives are. One

must also know what the thought that lead to the thesis was and how the research will

help/improve the existing case of the thesis. In order to do so the following answers to the

questions will give a brief overview to the document.

What is the thesis about?

The thesis focuses on making the process of

buying an office space effortless for the consumer,

by developing a rating system based on the service

quality indicators for these buildings. It focuses

on Facilities Management and the quality of

facilities in the commercial buildings.

What is Facilities Management (FM)?

Facilities management is a support system to all the activities related to the process of

designing, managing and operationalizing of buildings. It looks to integrate all the activities

and processes to achieve optimum results in terms of building design and building

functionality. FM deals with the management of services in buildings and enhances the life of

the buildings.

What are FM Service Quality Indicators?

FM service quality indicators can are the parameters that define the services and the quality

of services in a building. The indicators also act as metrics for benchmarking facilities in

buildings. FM Service quality indicators are a tool to measure the performance and design of

buildings in terms of service delivery.

Why an Office Buildings / Commercial Buildings?

A commercial building can be defined as a building that houses the commercial activity in

terms of offices, retail and warehouses. These are the spaces that house the commercial sector.

The place of work to be more specific. The service sector in India contributes to around 57%

of the GDP (Gross Domestic Product) with an annual growth rate of 9%. CITE. An average

Indian spends approximately 8.1 hours a day in the office which sums up to 2080 hours a year.


P a g e 4 | 21

This shows the importance of the office space and the need to manage it. The quality of space

also affects the performance of an individual, better quality of space will lead to an efficient

and productive environment.

How will the thesis help in improving the current state of facilities?

The ratings will give the facilities managers and builders insights on how the building is

currently performing in terms of service delivery. It will also give clues on where the services

need to be improved.

How will FM service quality indicators help?

The indicators will help in analysing the quality of the facilities provided in buildings and will

also help in mappings areas for improvement in these buildings. Better service delivery means

better quality of space when it comes to buildings.

What is the future scope and benefit of the thesis?

The scope of the thesis is to further develop a data base holding all the data of the buildings

based on the ratings that are developed. It will also help the builders and facilities managers

in revisiting the buildings for services and conduct reviews of their facilities to maintain the

quality standards. It will provide a single platform where one can review properties and also

see where one’s current facility stands in the market.

Current Setting

As the urban areas grow, the complexity and scale of the buildings that house people in these

areas also grows. To keep these complex habitats running sustainably the management of the

facilities is necessary. Facilities management has over the years become an important field as

it involves guiding and managing the operations and maintenance of buildings, precincts and

community infrastructure on behalf of the property owners.

India is one of the fastest growing economies in the world, and with growing economy comes

urbanization. Urban areas are driven by the commercial activity vis-a-vis the rural where

agriculture is dominant.

The growth in the office space and the creation of more integrated facilities and campuses has

created growth opportunities for more organized players. The market for facilities


P a g e 5 | 21

management has grown with the IT revolutions. International players have also entered the

Indian market to tap in on the growing opportunities. As per the latest industry estimate the

market size for the facilities management services is close to ₨ 80 billion and has an

employment potential of 5 million people.

Commercial buildings are complex in nature when it comes to services, these are managed by

facilities managers. The quality of facilities management services must be measured and the

end user must be involved in order to improve the service quality.

Facilities management service quality indicators facilitate the manager in understanding the

level of service efficiency and the satisfaction level of the end user.

2. Thesis question:

What are the facilities management service quality indicators in commercial

buildings?

3. Objectives:

To understand the core concepts and benchmarks of service quality for facilities

management.

To understand and analyse the evaluating criteria for commercial buildings by the end

user.

To develop a rating system which will enable the facility managers to understand and

satisfy the needs of the end user.

4. Scope:

The thesis will present a brief description of what facilities management is and how ne

can define it.

It will also give a brief of what are the basic components of FM and how they are

benchmarked by making use of the service quality indicators.

It will also look at the current setting of the FM in India and how the service in India

qualify taking into consideration the global benchmarks.

It will develop benchmarks for a rating system for commercial buildings based on the

study of global benchmarks and research based in the local setting.


P a g e 6 | 21

5. Research methodology:

Literature review:

Qualitative study involving fundamental investigation of objective will be carried out in a

systematic manner from primary data, published research papers, international journals, and

standard books.

Data collection:

The primary data will be collected in the form of questionnaires and interviews from the users

of the commercial buildings in the context of Ahmedabad.

The interviews will focus on understanding the evaluating criteria of the end user for these

commercial buildings.

The questionnaires will be designed in order to focus on understanding the facilities

management service quality in commercial buildings and satisfaction level of the end users.

Data analysis:

Primary data collected will be analysed in line with the literature review outcome, both

quantitatively and qualitatively so as to reach the research objective.

Literature Review

Define Question

Conduct Interviews

Conduct Surveys

Data Analysis

Prepare Rating System

Case Studies

Questionnaire based on KPIs

Collect Data

Identify Sample Size

Identify Stakeholders


P a g e 7 | 21

6. Literature Review:

The following text is a gist of the literature read in order to understand the core concepts of

facilities management. It will describe benchmarking and the concept of FM service quality

indicators on the basis of key performance indicators that are listed by the International

Facilities Management Association (IFMA) for buildings.

Further it will also describe a commercial space and the meaning of a commercial space in the

context of the research.

It will focus on case study of the design quality indicators which was developed to rate

buildings to help in understanding how a building is rated and what is the benefit of doing so.

What is Facilities Management?

To build an understanding about what facilities management is one must understand the

evolution of its definition over time as the profession evolves with the technological

advancement and the complexity in the building services. Following are some definitions given

by different authors over time about facilities management:

Author Definition

Becker (1990) Facilities management is responsible for co-ordinating all

efforts related to planning, designing and managing buildings

and their systems, equipment and furniture to enhance the

organisation's ability to compete successfully in a rapidly

changing world

Nourse (1990) Facilities management unit is seldom aware of the overall

corporate strategic planning, and does not have a bottom-line

emphasis

NHS Estates (1996) The practise of co-ordinating the physical workplace with the

people and work of an organisation; integrates the principles of

business administration, architecture, and the behavioural and

engineering science

Alexander (1999) The scope of the discipline covers all aspects of property, space,

environmental control, health and safety, and support services

Then (1999) The practice of facilities management is concerned with the

delivery of the enabling workplace environment ± the optimum

functional space that supports the business processes and

human resources


P a g e 8 | 21

Hinks And Mcnay

(1999)

Common interpretations of the facilities management remit:

maintenance management; space management and

accommodation standards; project management for new-build

and alterations; the general premises management of the

building stock; and the administration of associated support

services

Varcoe (2000) A focus on the management and delivery of the business

``outputs'' of both these entities [the real estate and

construction industry]; namely the productive use of building

assets as workplaces

Nutt (2000) The primary function of facilities management is resource

management, at strategic and operational levels of support.

Generic types of resource management central to the facilities

management function are the management of financial

resources, physical resources, human resources, and the

management of resources of information and knowledge

The earlier definitions highlight that facilities management is only concerned with the

“hardware” that is the buildings, equipment and furniture but later definitions also give an

emphasis on the “software” such as process, people, environment, health and safety as the part

of facilities management. Further some definitions also mention the life cycle of the building,

financing, space planning and operations as part of facilities management which further

broadens the scope of the field, and makes it a major support system for all the activities that

enhance the working of the built environment.

A more recent definition of facilities management is given by the international facilities

management association on its website, the definition is as follows:

“Facilities management is a profession that encompasses multiple disciplines to ensure

functionality of the built environment by integrating people, place, process and technology”

(international facility management association, 2014).

For the purpose of the thesis the above definition holds true as it is derived from the current

setting of facilities management.

Need for facilities management

All buildings that are designed have a certain life expectancy. As the building is occupied it

demands maintenance and management, these aspects of the post occupancy of the buildings

are often overlooked which ultimately results in shortening the life of the building and often


P a g e 9 | 21

degrading the quality of the space that is meant to serve. Facilities management has its major

focus on the life cycle of the buildings and has its focus set on the post occupancy services of

these buildings. The formal practice of facilities management is a new phenomenon and hence,

subject to misunderstandings and speculations. However facilities management is a discipline

that has evolved out of practice over time. Facilities management is the integration of 3 key

activities:

Property management (real estate) – this includes strategic activities like designing,

planning and refurbishments.

Property operations and maintenance – this consists of operational activities like

cleaning, maintenance, mowing, etc.

Office administration - this focuses on tactical activities like catering, M&E, etc.

(kincaid, 1994)

Facilities management involves strategic planning that optimizes the value and costs of the

facilities. The environment that the facilities provide to the employees, processes and systems

has a large impact on productivity. Facilities management provides strategic direction and

development or guidance to achieve the desired results. Facilities management navigates the

requirements and mitigates the risks. Facilities management also reduces the load on the

resources used to manage a facility.

Key components of facilities management

Property Management (Design Briefing Stage) MIND MAP SPACE

Strategic Property Management

Real Estate acquisition, Disposal and control

Lease Management

Risk Management

Governmental relations

Financial Data Management

Facilities Planning (Design and Construction Stage)

Strategic Facilities Planning

Building Design and Construction


P a g e 10 | 21

Space Planning, Utilization, Allocation and construction

Interior Design

Energy Management Planning

Telecommunications and networking coordination

Cost Controls and Data Management

Facilities Operations and Maintenance (Occupancy Stage)

Maintenance Management

Utility Operations

Facility Maintenance

Condition Assessment

Major Maintenance and Renovation

Grounds Maintenance

Life Safety Systems

Energy management operations

Material control

Transportation and vehicle maintenance

General Services

Facilities Support Systems

Security

Telecommunications

Transportation and parking

Mail Services

The areas of work of a Facilities Manager, include the following core competencies-

Communication—Communication plans and processes for both internal and

external stakeholders


P a g e 11 | 21

Emergency Preparedness and Business Continuity—Emergency and risk

management plans and procedures

Environmental Stewardship and Sustainability—Sustainable management of built

and natural environments

Finance & Business—Strategic plans, budgets, financial analyses, procurement

Human Factors—Healthful and save environment, security, FM employee

development

Leadership and Strategy—Strategic planning, organize, staff and lead organization

Operations and Maintenance—Building operations and maintenance, occupant

services

Project Management—Oversight and management of all projects and related

contracts

Quality—Best practices, process improvements, audits and measurements

Real Estate and Property Management—Real estate planning, acquisition and

disposition

Technology—Facility management technology, workplace management systems

Professional FM is needed to plan, maintain and manage these facilities. It is part of the drive

to meet the higher demands of organizations and individuals. Whether as employees,

customers, students or patients, people have higher expectations of their living, working and

leisure environments. As, good facilities management can deliver flexibility, adaptability and

sustainability. It can help organizations respond to cost pressures or the need for greater

security.

Benchmarking and KPIs in facilities management

Benchmarking:

"A standard by which a metric can be measured or judged." Thus, benchmarking is the

determination of benchmarks that are appropriate to a given situation in order to generate

knowledge and information to evaluate to the original metrics.

Benchmarks are goals to aim for. Other names for benchmarks include best practices and

exemplary practices. Businesses choose benchmarks based on standards within their industry.

For instance, you might look to peak performers in your industry and set their performance

levels in areas such as manufacturing or marketing as your benchmarks -- the levels you will

strive to reach.


P a g e 12 | 21

Types of benchmarking

Generally, three different types of the benchmarking, which influence its contents and course,

are distinguished:

Strategic benchmarking looks for the best strategies and their prerequisites. It is a tool

to the determination and orientation of future key competences by describing and

assessing different interdependent tendencies and processes of finances, customers,

competitively or capacity for learning and developing,

Process benchmarking compares similar processes with the aim of process

optimization, performance characteristics benchmarking compares services or

products with the aim of recognizing performance gaps.

Another distinction is made on the basis of the investigation area:

Internal benchmarking - comparison between similar areas within an organization,

External benchmarking - comparison of benchmarking partners belonging to the same

trade/industry but also the external ones.

KPIs

Key performance indicators are specific measurements used to gauge performance. They're a

way to precisely measure performance. Like benchmarks, performance indicators can be

goals, but they're more like steps on the way to the larger goal. You also can think of key

performance indicators as a way to measure your progress toward the benchmark goal and to

gauge how close you are to reaching that goal.

The table below lists the 9 areas defined by the IFMA for KPIs.

1. Description of

Facilities

Industries

represented

Facility use,

Ownership

Hours of operation

No. of occupants

Location of facility

2. Sizes and uses of

facilities

Gross area, Rentable

area, Usable area

Square footage per

occupant

Building efficiency

rates

Workstation

utilization rates

3. Office space planning

Vacancy rates

Space allocation

policies

Office type and size


P a g e 13 | 21

Office space per

worker

Support area

4. Relocation and

Churn

Organizational

moves

Cost of moves

Churn rate

5. Maintenance,

Janitorial and Indirect

Costs

Maintenance costs

▪ By age of facility

▪ Percentage of

replacement cost

▪ Repair vs. preventive

maintenance

▪ Outsourcing of

maintenance function

Janitorial costs,

Indirect costs

6. Utility costs

Utility costs

Utility usage

7. Environmental and

life safety costs

Environmental costs

Life-safety costs

8. Support and Project

costs

Security costs

Project costs

Space planning costs

Employee amenities

costs

9. Financial Indicators

Replacement value of

facility

Lease type and cost

Cost of operations

Cost of providing the

fixed asset

Occupancy cost

Financial ratios

Total annual facility

costs

As KPIs are used as metrics to measure performance they can be used to both enhance the

internal performance of the building management and also as a tool to benchmark externally

with the best practises around.


P a g e 14 | 21

The difference though is as follows:

KPIs for collective benchmarking KPIs for individual organisations

No limit to the number used Shouldn’t have too many

Individual KPIs don’t need to be relevant to

all participants

All KPIs need to be relevant

Need absolutely specific definition Not quite so critical

Reasonable approximations are acceptable Reasonable approximations may be

acceptable

Must be structured to accommodate size

differences in participating organisations

Not needed for internal comparisons

Mentioning targets is inappropriate Setting targets can be beneficial

Based on the KPIs one can develop a balanced scorecard to access the performance of the

facility.

What is a Balanced Scorecard?

In the early 1990s, Robert Kaplan and David Norton developed a new approach to strategic

management. Based on the premise that intangible, or knowledge-based, assets — employees,

volunteers, information technology, image — are increasingly important to organizational

success, the balanced scorecard not only measures financial outcomes, but also balances the

fiscal element with employee, business process and customer perspectives.

The balanced scorecard provides a method for aligning business activities to organizational

strategy. An organization's vision and mission statement are translated into specific and

calculable goals, and a set of performance measures is established to monitor the

organization's success in achieving those goals.

The vision is translated into operational goals and linked to departmental and

individual performance

A plan for business processes is outlined

The strategy is modified based on feedback

The balanced scorecard process involves viewing the organization from four perspectives,

developing measurements to gauge performance and analysing data relative to each

perspective:

The stakeholder perspective – measures directly impacting customers and customer

satisfaction

The internal perspective – measures reflecting performance of key business processes


P a g e 15 | 21

The learning and growth perspective – measures reflecting the organization's

learning curve

The financial perspective – measures reflecting financial performance

The four perspectives of the scorecard allow for a balance between:

Short- and long-term objectives

Outcomes desired and the drivers of those outcomes

Objective and subjective measures

In a perfect planning cycle, the balanced scorecard is derived from the organization's strategic

plan, the strategy map is derived from the balanced scorecard and the operating budget stems

from all three.

For the purpose of the thesis the balanced scorecard can be used for gauging the internal

performance of the facility and stakeholder perspectives. Further the card can be designed in

order to rate the building for user satisfaction and service quality.

What is a building rating system? How is it useful? What does it do?

Over the years several ratings have been developed by different organisations for buildings

and their performance. Following are a few rating systems that are followed around the world:

Building Research Establishment Environmental Assessment Method

(BREEAM)

BREEAM is by far the oldest building assessment system. Developed in 1988 by the Building

Research Establishment (BRE), the national building research organization of the UK, it was

initially created to help transform the construction of office buildings to high performance

standards.

BREEAM has been adopted in Canada, and several European and Asian countries (Kibert,

2003). BREEAM assesses the performance of buildings in the following areas:

management: overall management policy, commissioning site management and

procedural issues

energy use: operational energy and carbon dioxide (CO2) issues

health and well-being: indoor and external issues affecting health and well-being

pollution: air and water pollution issues


P a g e 16 | 21

transport: transport-related CO2 and location-related factors

land use: greenfield and brownfield sites

ecology: ecological value, conservation and enhancement of the site

materials: environmental implication of building materials, including life-cycle

impacts

water: consumption and water efficiency

BREEAM has two categories; for “design & procurement assessment” at the beginning of the

design process and “management & operation” assessment after it is in use.

Leadership in Energy and Environmental Design (LEED)

In North America, the U.S. Green Building Council (USGBC) developed the LEED rating

system with a market driven strategy to accelerate the adoption of green building practices.

The LEED rating system has gained a lot of momentum since Version 2.0 was released in

March 2000. As of August 2004, about 1,450 projects have been registered for LEED

certification.

LEED is structured with seven prerequisites and a maximum of 69 points divided into six

major categories which are listed below.

Sustainable Sites

Water Efficiency

Energy and Atmosphere

Materials and Resources

Indoor Environmental Quality

Innovation and Design Process.

LEED is still only used at the end of the construction process or design process for

rehabilitation projects.

Apart from the above 2 rating systems a building assessment system was designed to

document, rate and improve the quality of the buildings. The following is a Case Study of the

same.

DQI- Design Quality Indicators

The Design Quality Indicator (DQI) is a toolkit to measure, evaluate and improve the

design quality of buildings.

Development of DQI was started by the Construction Industry Council in 1999 and the toolkit

was launched as an online resource for the UK construction industry on 1 October 2003. In

2004 the DQI received recognition from the British Institute of Facilities Management for the


P a g e 17 | 21

role of involving users in the design process. The DQI tool was made available to users in the

United States in 2006, and an online American version was launched on 20 October 2008.

Framework for DQI

DQI applies a structured approach to assess design quality based on the model by the architect

Vitruvius, the Roman author of the earliest surviving theoretical treatise on building in

Western culture, who described design in terms of utilitas, firmitas and venustas, often

translated as commodity, firmness and delight. DQI uses a modern day interpretation of these

terms as:

Functionality (utilitas) – the arrangement, quality and interrelationship of spaces and

how the building is designed to be useful to all.

Build Quality (firmitas) – the engineering performance of the building, which includes

structural stability and the integration, safety and robustness of the systems, finishes

and fittings.

Impact (venustas) – the building’s ability to create a sense of place and have a positive

effect on the local community and environment.

What is it for?

It has been developed to help all built environment stakeholders gain more value from the

design of buildings, and to assist in improving the quality of buildings.

Who is it for?

A non-technical device, the DQI can be used by all stakeholders involved in the production

and use of buildings, including public and private clients, developers, financiers, design firms,

contractors, building managers and occupants.

When can it be used?

The DQI questionnaire encompasses questions which are relevant at any stage in the

development of a building and the tool can be revisited and re-used throughout the life of the

project. Ideally the DQI is used at every key stage of the development; it can also be used

repeatedly at a particular stage. There are four versions of the tool and DQI Online

automatically adjusts the questions displayed so they are relevant to the particular phase of

the project that is being assessed.


P a g e 18 | 21

The stages in which DQI is used:

Stage 1:

The brief version allows the project aspirations to be clearly set, addressing the

opinions of the stakeholders, and can be used through strategic briefing stages to

detailed brief to set priorities and answer questions such as: What do we want? Where

do we want to spend the money?

Stage 2:

Mid-design version allows the client and design teams to check whether early

aspirations have been met and allows adjustments in focus and quality to be made

accordingly. It can be used throughout the design phase when the project can still

respond to change.

Stage 3:

Ready for occupation version is used immediately before occupation to check

whether the brief/original intent has been achieved.

Stage 4:

In-use version is used in order to receive feedback from the project team and the

building users to help make improvements for the next project, and can lead on to more

thorough post-occupancy studies.

DQI enables one to approach a project as a prototype as the

building is unique and all its facilities/elements will be used

for the first time. It also caters to the end user as a part of the

design process and not just as a guinea pig. It uses KPIs,

Design Quality Indicators and Sustainability tools to rate the

building.

The questionnaire is based on the following parameters Functionality, Build Quality and

Impact.


P a g e 19 | 21

Functionality Build Quality Impact

It is concerned with the way in

which the building is designed

to be useful and is split into use,

access and space

It relates to the performance of

a building fabric and is split into

performance, engineering and

construction

It refers to the building’s ability

to create a sense of place, and to

have a positive effect on the

local community and

environment. It is split into

character and innovation,

form and materials, internal

environment and urban and

social integration

Format of the rating:

The DQI has two types of weighting, the first allow results to be distorted depending how the

respondents judge the success of various aspects of the building. A separate type of weighting

can be applied indicating whether aspects are:

Fundamental relating to factors which the building

must achieve in order to fulfil its purpose

Added value relating to factors that will enhance the

building’s usefulness and pleasure value

Excellence relating to factors that make the design

sparkle as a whole and help create a building of

distinction

The DQI is graphically presented in a number of ways,

which help by highlighting comparisons between:

Groups of respondents, comparing the views of

the buildings eventual users with those of the delivery

team.

Stages of a project, from the opinions established

at the inception stages of a project, and how these are

being achieved by the design.

Schemes within a portfolio of projects.


P a g e 20 | 21

Insights from the case study:

The projected value of a building is different from the actual use value of the building.

The DQI helps in closing the gap between the two values by involving the user in the

whole design process.

It develops three key metrics on which the building can be rated, these are based on

the insights gained from the through research done over the years.

The ratings also help in actually understanding how the perceived space functions as a

singular system, which helps the project developers in tweaking/improving the quality

of the same.


P a g e 21 | 21

Understanding the current Communication Channel to buy an office

space

Documents

20151603 Report MHMthesis Jigar 01