Key Performance Indicators for measurement of portfolio

performance

Objectives

• Improve portfolio performance

• Improve the efficiency & effectiveness of service delivery

Strategic Management- Strategic direction- Implications for business resources and Operational requirements

AppropriateFacilities

Match Supplywith Demand

over Time

Operational Management- Establish Service Demand- Review/Audit/Improve Performance

Facilities AssetManagement

Appropriate Physical ResourceStructure

AppropriateService

Performance

Monitor Physical

Assets andService

Performance

Strategic Inputs

Tactical Inputs

Strategic Management- Strategic direction- Implications for business resources and Operational requirements

AppropriateFacilities

Match Supplywith Demand

over Time

Operational Management- Establish Service Demand- Review/Audit/Improve Performance

Facilities AssetManagement

Appropriate Physical ResourceStructure

AppropriateService

Performance

Monitor Physical

Assets andService

Performance

Strategic Inputs

Tactical Inputs

Portfolio Performance

Efficient & Effective Service Delivery

Changing Face of FM

• In the 1980’s and 1990’s research in the US showed that the facilities were seen as an expense and not closely linked to corporate objectives.

• As competition increased, all costs were scrutinised, including facilities costs.

• Organisations to take a more integrated approach to managing all resources (people, IT, facilities and money)

Tasks and Functions

Processes and Competencies

Resource Management

Property InformationRepairs and MaintenanceSite Selection & AcquisitionConstruction & HandoverRefurbishment and Refit

Estate ManagementAsset managementFacilities Management

Property Portfolio ManagementStrategic Facilities PlanningLong-term Asset ManagementSupport Services ManagementOptimizing the use of resources

Tactical Concerns Strategic Concerns

Changing Face of FM

Key Questions

Senior Executives of Corporations asked the following questions:-

• What facilities do we have?• What condition are they in?• What facilities are needed to support the mission?• What problems & issues need to be addressed?• How much are we investing? How much do we

need to invest?• What are the outcomes of this investment?

Key Questions

To improve decision making and management of portfolio investments, organisations must track:-

• Performance measures that reflect facility portfolios

• The level of alignment with the organisations mission.

• Investment levels and investment outcomes.

This presentation will examine key performance indicators that support portfolio management.

Lesson 1

Like Universities, tow truck companies often underestimate the resources required to do the job

What spaces do we need to support the mission?

What condition do those spaces need to be in?

What functionality do those spaces need to deliver?

What spaces do we have to support the mission?

What condition are those spaces?

What functionality do the spaces deliver?

What do we need to invest in the portfolio?

What have we invested in the portfolio?

Key Questions

Key Performance IndicatorHierarchy

Corporate

Strategic

Operational

Key Performance IndicatorHierarchy

Corporate

Strategic

Operational

Po

rtfo

lio

Pe

rfo

rma

nc

e

Key Performance IndicatorHierarchy

Corporate

Strategic

Operational

Po

rtfo

lio

Pe

rfo

rma

nc

eS

erv

ice

De

liv

ery

Key Performance IndicatorHierarchy

Corporate

Strategic

Operational

FCIFRR/CRIMI

KPI’s

Key Performance IndicatorHierarchy

Corporate

Strategic

Operational

FCIFRR/CRIMI

KPI’s

Building

Element Space

Portfolio

Campus

Buildings Grounds

Elements Spaces Elements Spaces

NPWC Element Structure Ontario Definitions NPWC Structure To be defined

Co

rpo

rate

Str

ate

gic

Facilities Definition Hierarchy

Lesson 2

If in doubt …… get a bigger truck

What facilities are required to support the mission?

1. Is there enough space to support the mission?

2. Is that space aligned to the mission? Is it the right type of space?

3. Does the level of service provided by the space support the mission?

Measurement of space

• A standard definition of space types

• Defined space allocation standards

• An assessment of actual space vs the standard

Required outcome – Asset Utilisation Index (AUI)

Facility

Element Space

FunctionalityCondition

Level of Service

Key Measures of Level of Service

• Facility Condition Index (FCI)

• Facility Functionality Index (FFI)

• Facility Needs Index (FNI)

How much do we invest?• Need to disseminate expenditure on current

portfolio vs growth. Focus here on “maintaining” the portfolio.

• Main focus usually is on maintenance with the Maintenance Index (MI) used as the main guide.

• Degree of capital investment in renewal refurbishment of the portfolio also needs to be considered (Capital Renewal Index).

How much do we need to invest?

• For the existing portfolio, it will be the level of expenditure required to deliver the targeted FCI, FFI and/or FNI.

• For changing the portfolio, it will be the expenditure required for growth.

Key Question/Goal Attained

Key Performance Indicator Calculation Comment

What facilities do we have?

Asset Replacement Value (ARV)

Consultancy by finance every 5 years. Need to look at tracking measure in intermediate years

Age Current Year – Year Constructed

Building Efficiency Useable Floor Area (GFA)/ Gross Floor Area (UFA) %

Space Type Defines the amount of space available by space type.

What Condition are they in?

Facility Condition Index (FCI) (1 – (Maintenance Backlog/ARV))%

Maintenance Backlog

What facilities are needed to support mission?

Asset Utilisation Index (AUI) (Inventory Space (GFA) / Theoretical Space (m2))%

Needs to be a product of the space standards revision.

Facility Functionality Index (FFI)

Capital Renewal/Compliance requirements/ARV Needs to be well defined so that it is consistently measurable

How much do we invest

Capital Renewal Index (CRI) Capital Renewal Expenditure / ARV Needs to be well defined so that it is consistently measurable

Maintenance Index (MI) Annual Maintenance Budget / ARV

How much do we need to invest?

Facility Condition Index (FCI) (1 – (Maintenance Backlog/ARV))%

Facility Functionality Index (FFI)

Capital Renewal/Compliance requirements/ARV Needs to be well defined so that it is consistently measurable

Needs Index (FNI) Capital Renewal + Backlog / ARV Needs further investigation to decide if this measure is of Benefit

KPI Building/Campus Space Type Building Element

AUI

CRI

MI

FCI

FFI

FNI

TEFMA Benchmarking

• Are the TEFMA benchmarks strategic?

• Do they focus on portfolio performance (strategic) or service delivery (tactical)?

THEY HAVE A BIT OF BOTH

Key Performance Indicators TEFMA APPA

Asset Utilisation Index (AUI)

Capital Renewal Index (CRI)

Maintenance Index (MI)

Facility Condition Index (FCI)

Facility Functionality Index (FFI)

Facility Needs Index (FNI)

Lesson 3

..... Still not big enough.

Obviously did not fully understand the problem before adding more resources.

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

16.00%

18.00%

Capital Renew al Index Maintenance Index FCI Needs Index

Building Condition Indices

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

16.00%

18.00%

Capital Renew al Index Maintenance Index FCI Needs Index

Portfolio Performance

APPA

CSU

Way forward to make TEFMA benchmarks more strategic

• Focus on developing definitions and standards for space so that AUI can be assessed.

• Do more work on formulating FFI

• Define and include CRI in the current benchmarks

Lesson 4

Pay attention to lessons 2 & 3.