Measuring Facilities Management Provider Performance is All in the Cards (Balanced Scorecards, That Is)
Steve Silen, Director, Shared Services and Outsourcing Advisory practice, part of KPMG Management Consulting
Organizations are increasingly turning to balanced scorecards as a means to comprehensively assess the performance of their external facilities management (FM) service providers against multiple criteria. They also use these flexible yet powerful tools to establish alignment and focus, identify improvement opportunities, enhance performance reporting, and conduct constructive discussions with their FM providers.
While the format of FM balanced scorecards varies from company to company, typical elements include:
- Evaluation criteria (e.g., cost, customer satisfaction, service delivery and safety performance)
- Weight placed on each criterion (with different percentages for each, totaling 100 %)
- Evaluation comments (both favorable and areas for improvement)
- Evaluation score (e.g., 1-5 scale) for each criterion and a total weighted score.
The utilized evaluation criteria also differs by organization, but at minimum should assess all major service lines such as maintenance, janitorial services, food services, and call center, against the following:
Costs – e.g., actual versus budget and forecast, versus industry benchmarks, etc. Many firms find it useful to measure both aggregate costs and type of expense, such as energy and utilities.
Customer satisfaction – balanced scorecards, when used in tandem with email surveys, suggestion boxes, and other information-gathering tools, are extremely helpful in evaluating the all-important end-recipient level of satisfaction with the delivered services.
Service delivery – buyers are ensured of proper operational performance only when providers meet or exceed their service delivery expectations. Areas to measure in the maintenance category, for example, include response time, work orders completed, and data integrity.
Environmental, health and safety (EHS) performance – measurement of provider performance must take into account injury to people or harm to the environment. In this category, important criteria include OSHA recordable incident rates, number of incidents, completion of incident investigations, and conservation improvements.
Compliance – while often overlooked, service provider compliance with laws and regulations, and with internal policies and industry standards, are another vital component of FM service provider performance. Here, areas to look at include fines, violations, regulatory inspection results, and assessment/audit results.
Innovation/continuous improvement – this category ensures providers understand that the status quo is unacceptable and that they must be more than just mere “body shops.” Number of new ideas presented, leading practices and thought leadership introduced, and number of initiatives in the pipeline and implemented are all examples of criteria to include in this portion of a balanced scorecard.
If done right, using a balanced scorecard can improve not only an organization’s ability to monitor its FM service provider’s performance but also its ability to drive positive changes. Many companies find it valuable to develop the balanced scorecard in partnership with their provider, as that enables incorporation of their ideas and helps set the stage for alignment and focus.
To learn more about this topic, please read KPMG’s companion paper, “Using a balanced scorecard to help measure facilities management performance.”
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