The CAFM connection
The biggest recent change in the PFI market has been the rising importance of the value proposition which underpins the majority of bids. The design and construction of impressive premises is just one side of the story. Now, PFI companies must prove the value of their maintenance and construction services throughout the life-cycle of the project (typically, 25 years), and this has brought FM right to the heart of the bidding process and the way in which these very complex contracts are awarded.
In their quest to accommodate this complexity - no two PFI contracts are ever alike - PFI companies have increasingly discovered that manual processes and asset management are simply too slow and unwieldy for today's contracts.
Instead, they are turning to Computer Aided Facilities Management (CAFM), and using it as a management tool alongside its more conventional role underpinning the delivery of traditional FM services. In particular, they are unlocking the business benefits of automating the performance and payment mechanisms which are used to calculate potential penalties against performance: a significant element of any PFI contract, along with service level specification.
The payment mechanism allows the PFI company to demonstrate and measure its performance and the availability of the premises against the service levels stipulated by the contract. It brings together many factors, including location, and the length of time allocated to carrying out work. For example, the longer a task takes beyond the contractual time, the higher the penalties incurred.
FSI, a leading CAFM solutions player, has more than a decade's experience of involvement at the core of winning PFI project bids and contracts. Since 1990, its systems have been an important force in the drive to release information from the back office and deliver it into the hands of an increasingly diverse range of end-users who rely on it to deliver the company's contractual obligations.
As one of the first companies to develop a Windows-based maintenance package - the widely-recognised, intuitive Concept - FSI has been in a prime position to respond to the increasingly central role of CAFM in PFI projects. Concept delivers a comprehensive set of tools designed to manage hard and soft FM services, and FSI has a history of working with its customers to tailor the system to their specific requirements.
The company has assisted numerous PFI clients in every sector - central government, education, healthcare and defence: one of its most important PFI projects, for example, has been the Ministry of Defence's Whitehall premises, where Concept was deployed to support PFI contractor Amey through the refurbishment, staff transfer and full service delivery phases.
During PFI projects list this, FSI has seen at first hand the business benefits of automating payment mechanisms for its customers. An automated payment mechanism allows the FM operators who are actually delivering services stipulated by the contract to, at a single keystroke, generate financial and penalty status reports without needing to understand the complex underlying legal framework.
The traditional approach in PFI bids has been for the company's lawyers to draw this framework, which operational staff are then required to translate into the everyday running of the contract. This is a huge challenge for anybody without specialist knowledge of how contracts are conceived and interpreted, and can occupy many man hours in a manual environment, impacting on productivity and distracting people from their frontline roles.
Further complications are caused by the bespoke nature of PFI contracts. The industry is moving tentatively in the direction of standard forms for PFI payment mechanisms but because every project in unique and negotiated separately, payment mechanisms and service level specifications tend to vary greatly from one case to the next. The documentation alone inevitably runs to several hundred pages and it would be almost impossible to identify a common model to suit every project.
Instead, automation allows the company's financial obligations to be set out and calculated quickly and efficiently, removing the 'pain' and complexity from the process.
FSI's approach has been to develop a fully customisable Performance Payment Measurement utility, which allows projects to be started from scratch using common underlying principles but adapting the model to their own circumstance. Calculations are based on data collected and stored by Concept's underlying database, and then used to generate management reports for the PFI company and its external managers.
Once the PFI client has implemented Concept, they will have access to the instruction sets and reports that relate to their output specification as defined by the PFI contract. Weightings and numbers of points are built into Concept and this information is used to create the reports, which are then run through Crystal Connect.
FSI's PFI Payment Mechanism is tailored during a consultancy phase in which the client works with an FSI expert to design the function according to the contract's requirements and establish the relevant instruction sets and reports. Once these parameters have been defined, the client can set the PFI Payment Mechanism to run automatically, calculating any financial penalties incurred as a result of non-performance.
By empowering end-users to run reports and calculations at any time - either at the click of a keystroke or at a specified time, and in a format appropriate for all interested parties, many PFI clients have reported some impressive business benefits, including significant time savings.
One FSI client in the PFI sector previously used manual calculation methods which kept two staff occupied for many hours, taking them away from their strategic roles in the delivery of FM services. Post-automation, they are saving a minimum of two days each month. There is also a significant cost-saving: initial investment in the utility is effectively returned each time the calculation is run, throughout the average 25-year length of the PFI project.
Given this, it's hardly surprising that CAFM has become one of the lynchpins of projects great and small, throughout every sector of the PFI industry. The increasing speed of the market's evolution will be matched only by the need for flexible and agile solutions that enable PFI companies to meet the ever-more exacting requirements of their contracts.