What is the gap between FM and procurement?
A webinar exploring the gap between the facilities management and procurement sectors has revealed that 57% feel that the relationship between the two parties is only ‘average’, while 43% said it was close and that they worked together collaboratively when required.
Hosted last week by supplier information management specialist, Trade Interchange, the webinar saw speakers from the FM and procurement sectors discuss the reason for this apparent disconnect.
Jeremy Waud, Chairman of service provider, Incentive FM, said:
“There has been historic friction and frustration. The two sides have often had conflicting corporate objectives which has meant they behaved very differently.”
Consultant Dave Wilson argued that this was only exacerbated when FM teams delivered over multiple geographies and cultures, stating:
“Procurement’s inherent desire to cut supplier numbers to reduce administration is directly contradictory to FM who wants to increase the numbers to improve service and reduce risk.”
Meanwhile, Les Stratford, Chairman of the BIFM’s Procurement Special Interest Group, acknowledged that there was a perception that while FM had learnt to distinguish between economical procurement (purchasing units at the lowest price), efficient resource use (using the minimum quantity of an item for a given outcome) and effective operations (creating the best outcome for the least cost), which requires combining economic buying, efficient utilisation and desired outcomes, their procurement counterparts have not recognised this change and remain focussed on unit cost, often at the expense of effective operations and desired outcomes.
However, the panel acknowledged that FM had much to learn from the procurement function – if only FM would be open to the opportunities a good relationship good bring. The audience agreed that there were skills held by the procurement team which were valued by the organisation. Asked which of procurement’s competences were most important to FM, the audience reported support to articulate the service required (50%); probity and auditability of process (50%); in-depth experience of the procurement process (38%); in-depth experience of contract management (25%); and negotiation skills (13%).
One solution to bring the two parties close together is to literally co-locate them, said Ian Jones, Director of Facilities and Estates at ITV, who had a procurement director who sat next to the FM team for a year. He insisted the relationship improved immeasurably as a result.
Technology is also a key enabler, added Mike Edmunds, Chief Technical Officer at Trade Interchange, who suggested that automating processes allowed some of the pinch points between FM and procurement to be resolved. And this seemed to be backed up by the audience. Half said they used both contract management technology and supplier information management technology to solve the disconnect between the two sides, while 17% used performance management technology. Just over a third saw the issues could only be solved by improved relationships.
The topics discussed are also examined in Trade Interchange’s latest white paper Aligning Supplier Management with FM Objectives.
Download your complimentary copy here, and listen to a recording of the webinar.