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FM Realising The Value

This document provides an introduction to facilities management. Facilities management is the integration of processes to maintain and develop agreed support services that improve the effectiveness of an organization's primary activities. It involves taking responsibility for essential non-core functions and services, such as security, cleaning, and maintenance, so that an organization can focus on its core operations. Facilities management is a large, diverse, and growing business sector that employs hundreds of thousands of people, yet remains relatively unrecognized.

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Eduardo Viana
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0% found this document useful (0 votes)
55 views16 pages

FM Realising The Value

This document provides an introduction to facilities management. Facilities management is the integration of processes to maintain and develop agreed support services that improve the effectiveness of an organization's primary activities. It involves taking responsibility for essential non-core functions and services, such as security, cleaning, and maintenance, so that an organization can focus on its core operations. Facilities management is a large, diverse, and growing business sector that employs hundreds of thousands of people, yet remains relatively unrecognized.

Uploaded by

Eduardo Viana
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 16

Facilities Management:

realising the value of the investment

For more information on Facilities Management:


www.i-FM.net

i-FM would specifically like to acknowledge the sponsors of Workplace Futures 2011.
Every organisation, regardless of size or sector, depends on a range of

Contents non-core services to support its core operations. No organisation can


thrive or perhaps even survive long term without effective security, cleaning, catering,
maintenance, and a host of additional facilities services.

These, and the management required to deliver them in line with dynamic
corporate needs, are increasingly recognised as critical business functions.
1 Introduction Page 04
So how should they be sourced: through in-house capabilities, one or more
2 What is Facilities Management? Page 06 outsource providers, or a combination of both?
What services does FM encompass? Page 08
The choice is not an easy one; nor is it a case of once done and thats
3 How is FM delivered? Page 10
finished. The purpose of this paper is to help senior executives think
How big is the market? Page 11
through the decision, whether for the first time or in review of a past
4 So, how should FM be delivered? Page 12 choice. It does not advocate a particular course: the best option can only
The starting point Page 13 be identified in the light of the organisations own circumstances.
FM process map Page 14
Risk management Page 15
People management Page 16

5 Delivery routes Page 18


Single service Page 21
Bundled services Page 23
Integrated services Page 25
Total FM Page 27

6 Conclusion Page 28

7 Acknowledgements Page 30

02 Facilities Management: realising the value of the investment


1 Introduction

FM is an essential 'What is Facilities Management?':


that's the question with which we
manage the move to a new HQ in
support of growth? Who knows
management start this paper because FM - which buildings in a portfolio are
despite being an essential the most energy efficient and
discipline, and a management discipline for every what can de done to improve the
multi-billion pound organisation of any size, despite poor performers? More often
being a multi-billion pound than not, the answer in each case
business sector business sector, and despite is the Facilities Manager.
employing hundreds of employing hundreds of

thousands of people thousands of people - remains


comparatively unrecognised in
The purpose of this paper is to
provide an introduction to this
the UK. critical business role and to
explain some of the ways in
Facilities management is a big, which organisations can obtain
diverse and maturing area of the facilities management
business. Tactical in its day-to- services they need. Advice is
day operations, it is nevertheless provided on how to approach the
closely related to - and often fundamental decision of in-house
deeply involved in - strategic vs outsource. Finally, the paper
planning and decision-making at highlights from real-world
private and public sector examples some of the important
organisations alike. Who is benefits that can flow from good-
responsible for ensuring the practice implementation.
workplace is clean, safe and fully
compliant with all relevant Facilities management has been
legislation? Who can plan and something of a Cinderella
implement the consolidation of discipline. It is well past time for
accommodation resources; or that to change.

Facilities Management: realising the value of the investment 05


2 What is Facilities Management?

Facilities Every organisation, public or


private, relies on a mix of
That standard defines FM this way:
Facilities management is the
management functions and services to provide integration of processes within an
the support essential to its main organisation to maintain and
is about taking operations. Ensuring that this develop the agreed services which
responsibility for support is available in the right support and improve the
form, at the right quality and for effectiveness of its primary activities.
essential support the right cost is the task of
functions and facilities management. FM was also recognised in the

services
2008 revision of the UK Standard
In essence, FM is about taking Industrial Classification code. SIC
responsibility for those support 81.10 covers 'combined facilities
functions and services, leaving the support activities'. That
organisation free to focus on its represents a further big step in
central objectives, whether those formalising an understanding of
involve manufacturing products, the market and indeed in the
providing specialist services, maturing of facilities
operating a government management as a critical
department or delivering healthcare business discipline.
- or any other activity carried out on
all but the smallest scale. And FM is not just about support.
Good practice facilities
Since the early '80s when management can also make a
facilities management began to significant positive contribution to
be recognised as a separate a range of key business
discipline, a variety of definitions concerns: risk management,
has been offered. This can be productivity, reputation,
seen as a process of evolution, corporate social responsibility,
culminating in 2007 with the the talent agenda etc. Equally,
publication of European poor FM may have a negative
Standard EN 15221.1. impact on such issues.

Facilities Management: realising the value of the investment 07


What services does By the late 20th Century, with its
FM encompass? core vs non-core climate of continuous change in
business and technology, and
Typically, when we talk about This is a commonly made the consequent emphasis on
facilities management we have in distinction, especially in the effective utilisation of all
context of outsourcing. 'Core' is corporate resources, facilities
mind a list of activities that
used to describe the key or management had emerged as
includes cleaning, catering,
essential activities of an
security, mechanical & electrical an important business activity.
organisation, with 'non-core'
services and building fabric applied to other areas of activity -
This has only been reinforced by
maintenance. The list can be specifically, those that might be the continued change we have
much longer, however, taking in beneficially provided by an witnessed in the 21st C - in
reception services, external supplier. For example, addition, of course, to the global
offering customers financial economic fluctuations affecting
reprographics, washroom
advice is a core activity for a bank; virtually every public and private
hygiene, internal and external
but most banks take the view that
landscaping and so on sector organisation.
catering, security and M&E
according to the needs of a services can be more effectively
particular organisation. provided by specialist partners. With this recognition of FM has
come a growing range of choice
The distinction is often made How core and non-core are in how specific functions and
defined, and indeed whether services can be secured.
between 'hard' and 'soft' FM
any non-core activities are Though it can be confusing to
when considering the services
outsourced, is a decision for an
included. In this context, 'hard' newcomers (and occasionally to
individual organisation, taking
generally focuses on those account of its own business,
old hands, too), the fact is
services associated with culture, strategy, objectives etc. facilities management is both a
buildings (M&E, for example), critical business discipline and
and 'soft' generally focuses on The critical point is that non-core a thriving industry.
does not mean 'not important'.
services associated with people
(such as catering or cleaning).

Facilities Management: realising the value of the investment 08


3 How is FM delivered?

A market From a decades-old starting


point of single-purpose contracts
How big is the UK
market?
encompassing (typically, maintenance, cleaning
or security), each handled by a A recent study from the research
in-house, single, specialist provider, the firm MBD (published December
bundled and TFM outsourcing concept has 2010) defined a UK market
broadened over the years to encompassing in-house, single,
services valued at encompass 'bundles' of services bundled and TFM services,
118.8bn put in the hands of multi- putting a value on this of
discipline contractors. More 118.8bn.
recently, many larger contractors
have sought to bring diverse The researchers were moderately
service lines together in optimistic on growth prospects
'integrated' packages, promising for the short-term, pointing
greater efficiencies and reduced towards the likelihood of an
One of the Facilities Manager's
management costs. increasing number of client-side
primary responsibilities is
organisations choosing to
providing and managing a range
Alternative service supply routes outsource services on the basis
of services to his or her
are offered by a number of FM that this is perceived to be more
'customers', that is, the
companies who focus specifically cost-effective than delivering
employees within the
on the management of services them with in-house resources.
organisation - whether the FM is
that are delivered by sub- MBD projects annual FM market
employed by that organisation or
contractors - though this once- growth rates for the period 2011-
by an external partner. These
common approach has become 15 of between 2% and 4% - a
services may span the spectrum
less so as many of these significant uplift from the
from security and M&E, through
specialists have either diversified recession-hit rates of the past
cleaning and catering, to plants
their skill base or been bought by year or two. Growth at these rates
and landscaping. Increasingly,
ambitious contractors. 'Total will result in a market valued at
such services are outsourced; in
facilities management' is another 135.4bn in 2015.
other words, purchased from and
alternative, in which the provider
delivered by dedicated suppliers
takes on responsibility for the
- a practice that has grown and
delivery and management of the
developed in parallel with the rise
required service lines. TFM
of facilities management itself.
solutions can be sourced from FM
specialists or from diversified
contractors, who will generally
meet as much of the need as
possible from their own resources.

Facilities Management: realising the value of the investment 11


4 So, how should FM be delivered?

"FM is The choice is not an easy one;


nor is it a case of 'once done and
The starting point
about providing that's finished'. The purpose of Any organisation considering its
this part of the White Paper is to needs for support services and
the support to meet help senior executives think for procuring the most
business through the decision, whether for advantageous solution should
objectives
the first time or in review of a past begin by analysing the strategic
choice. It does not advocate a importance of FM to achieving
particular course: the best option the main purpose and objectives
can only be identified in the light of the business. An organisation's
of a specific organisation's own response to this will be driven by
circumstances. And because many factors including (but not
circumstances change, periodic limited to):
review is essential.
What is the 'essence' of the
Ensuring the most efficient organisation's proposition - its
delivery of facilities services is an strategy, structure, operational
increasingly critical decision. It is ethos, future vision and corporate
also a decision with far-reaching culture?
consequences. The What is the organisation doing -
dispassionate and objective expanding, contracting, changing
process that this decision direction?
requires must avoid superficial What is the corporate strategy - is
analysis of headline costs in it supported by a delivery model for
favour of an in-depth review of facilities services which enables
FM's impact on the full scope of that strategy to be achieved?
an organisation's operations. An Does the organisation have a
approach that regards FM strategy for FM and has it taken full
services as 'non-core', and by account of the intentions of the
association of little importance to Board?
the performance and delivery of How would the organisation's
critical success factors, should Corporate Social Responsibility
be avoided. FM is very much agenda be affected by its FM
'core' in the sense that it is about procurement strategy?
providing the support to meet Has the organisation developed
business objectives. It should not its own sustainable estates strategy
be perceived as some sort of and how are decisions about FM
add-on or after-thought. services tied to this?

Facilities Management: realising the value of the investment 13


FM Process Map

"Risk can be Risk management Managing risk needs to be fully


integrated into the contractual
transferred; The case for outsourcing as against arrangements and the day-to-day
in-house provision is often management of the FM
legal duties and undertaking, whether this is in-
promoted on the basis of risk
responsibilities transfer. Some organisations house or an outsourced service

cannot mistakenly view this as eliminating contract / partnership. Risk


all risk to their business by placing ownership must be carefully
the responsibility on the FM identified and accepted and a
provider. In practice, the impact of contingency plan agreed to deal
failure always remains with the with any incidents or issues that
client, whether or not the cost of arise.
failure has been shared with others.
The full scope of the business
Any risk transfer comes at a support service requirement
price, and an assessment of the needs to be understood, too. The
true value should be undertaken relationship and role of FM
before decisions are made. services must be assessed
Although risk can be transferred, alongside other key services,
legal duties and responsibilities including finance, human
cannot. A risk assessment is resources, IT, logistics, asset
needed so that consideration can management, property
be given to those risks that management and other
should be transferred or retained. professional services.

The specific risks will vary Whilst cost savings may be an


depending on the organisation important objective of any
and the range of services change process, such savings
involved. A detailed risk register need to be weighed against the
will be required to identify the value obtained. By structuring a
consequence of failure and the service in such a way that it is
cost of transferring the risk to a delivered more efficiently, and not
partner organisation. Value-based simply by reducing pay rates or
decisions can then be made on trying to squeeze too much into
those risks to be transferred and too little time, levels of service
those to be retained. can be maintained and customer
satisfaction enhanced.

Facilities Management: realising the value of the investment 15


People management In-house teams are often looked charges are needed to compensate.
upon as being more loyal to their This can be true in either an in-house
employer. There is an expectation or outsourced environment.
Whether services are provided that, particularly in secure
in-house or by contracted staff, environments, an in-house The right choice is the one that's
ensuring the commitment of the employee will be more interested right for you
people involved in the delivery of in his or her long-term Facilities management lies at the
those services at all levels is employment prospects and the heart of an organisation, and
critical. Would an in-house or importance of 'getting it right'. indeed forms an essential part of
outsourced service arrangement This interest in longevity may bring economies and of society itself.
provide a better solution in terms with it an extension of knowledge Regardless of the sector - retail,
of cost, value and/or service of the business and the way it finance, R&D, education, health
quality? Would retention of an operates. This in turn brings the or defence - facilities
existing in-house facilities team additional benefit of historic management provides the
provide better understanding of knowledge, a factor often backbone from which economic
the business requirement; or is a overlooked when making in-house and social endeavour can grow
completely new approach versus outsourced decisions. and develop.
required that will be better
supported by the introduction of In any case, if major change is FM requires management skills,
new managers from an external required, perhaps rationalisation as well as a range of technical
contractor? due to cost pressures, serious skills. Implicit is the need to be
consideration must be given to how able to manage a diversity of
In-house teams, provided they this will be handled and what service areas in a manner that
are properly integrated, can be consultation processes are makes the whole much greater
closer to corporate strategy than appropriate. The human dimension than the sum of its parts. In this
external providers. In-house to change is often given too little way, FM adds value to
facilities managers may consideration. Cutting corners can organisations at all levels.
collaborate and liaise much more bring disastrous results, and
closely with business stream seemingly indiscriminate reductions
managers because they are in staffing levels or pay rates will have
viewed as being 'on the same the same effect. Such changes
team'. In-house managers can become apparent in the poor
also obtain access to other performance of the service when
management peers more easily either reduced service content or
and know who to speak to in delivery occurs or additional
order to make things happen.

Facilities Management: realising the value of the investment 16


5 Delivery Routes

Demonstrating in-house FM expectations clearly but must


also show that he or she has
proactivity and The provision of services using 'been there and done it' - and
in-house teams potentially carries further, they're prepared to do it
excellence in again themselves whenever
great benefits provided they are
customer focus competitive with the external necessary!
market. This means they must
deliver an equal or better service All FMs constantly face the
consistently and demonstrate challenge of how to demonstrate
proactivity and excellence in value to their employers. This is
customer focus. best achieved through delivering
a proactive service and
One significant area where in- communicating success to the
house teams can deliver over and customers, particularly the senior
above the external market is management team. In the right
through their unique position of circumstances, in-house FM can
being able to create close hit the target every time.
customer relationships on a
personal basis without the Derek Paxman, Head of Facilities
complication of being branded, Management, University of the
rightly or wrongly as, 'a Arts London
contractor'.

A key to delivering successfully is


that the senior FM must be a
leader, one who fully understands
the capability of his team to
become 'best in class'.
Conveying this understanding
only comes through direct
communication with each
individual, explaining their
importance to the organisation
and, in turn, the importance of
the various delivery groups on
the site. The leader must set out

Facilities Management: realising the value of the investment 19


Specialists build That is not to say that by being
more risk-aware specialist
A year on, PwC's Head of
Security for the UK and Welcome
their reputations as providers must always be a more Services for London, Richard

experts in the field


expensive option. In fact, the Stanley, had this to say: The
better ones are very able to transformation and integration of
develop unique solutions that save both teams over the last 12
the customer money and deliver a months has been exceptional. We
better and more robust solution. have seen noticeable behaviour
change and service
An example of this enlightened improvements in the last 12
Single service approach is the exercise months with a 'can do' attitude
PriceWaterhouseCoopers went across both services. Having
Frequently procured as a
through in 2009/10. They security officers who are trained
separate exercise, security is one
approached the market to in '5 star' front-of-house
of those 'Marmite' services. You
explore what options were behaviours and the Welcome
either see its intrinsic value and
available to integrate their teams being more involved in
only buy on quality; or it's simply
security and welcome services security awareness have
a commodity and you buy solely
for their London offices. Their aim delivered the elusive 'value
on the basis of price.
was to achieve a fully integrated adds'.
package demonstrating genuine
Yet to buy security on the basis of
world-class front-of-house This case demonstrates the value
price alone is surely only justified
service. of specialist companies working
in situations of very low risk.
together, perhaps dispelling a
Where risk is very firmly on the
But rather than select a single myth of a silo mentality when
agenda, specialist providers tend
provider to offer this package, specialists of similar standards
to tackle its different forms in a
they instead opted for a and values come together with a
way that the generalists rarely
partnership approach, using two common purpose.
can. After all, it's their core
specialist companies, Wilson
business, and they build their
James for the security service Stuart Lowden,
reputation as experts in this field.
(and acting as the main contract Managing Director, Wilson James
Furthermore, they are less likely
holder) and Portico for the
to take risks with customers'
Welcome service.
reputations when striving to
achieve financial efficiencies.

Facilities Management: realising the value of the investment 21


Sharing the success Bundled services value is demonstrated. This was
expressed at the FSA when
in a relationship built The bundled services delivery seven months after the initial

on trust route is defined as two or more contract began the team decided
distinct processes or functions G4S had the professional skill
contracted to a service provider. and expertise to be trusted with a
range of additional services,
G4S provides bundled FM including management of the
services to numerous customers catering contractor.
across government, the NHS and
the private sector. In the case of In these difficult economic times,
the Food Standards Agency, the quality of relationships is
bundling of cleaning, security, crucial to continuing success for
reception and workplace both partners. The FSA has been
management services allowed asked to deliver 30% savings by
the organisation to outsource its central government over the next
soft FM to a single provider while 3 - 5 years. To support them in
retaining more direct control over this, G4S has suggested 25%
service elements. savings on the contract. That's
6% year on year for 4 years. We
When the Agency made the will do this by changes to shift
decision to move away from patterns, increased multi-skilling
managing multiple providers to and voluntarily ending our 'cost
establishing a relationship with plus profit' arrangement. We take
one partner, its objectives this as our own responsibility to
included securing the benefits of support our customer as we
cross-service efficiencies, consider their challenges to be
economies of scale and our own.
professional development of the
services. Bundling allowed it to Bundling means you're all in it
do this while leaving the hard FM together for the long-term. You
with another provider under the share any pain, but you also
landlord contract. share the success of your
customer and enjoy a relationship
One of the benefits bundled built on trust and mutual
services offers is that both client understanding.
and provider have an opportunity
to develop trust and grow the Emma Pearson, Corporate
contract over time as partnering Development Director, G4S

Facilities Management: realising the value of the investment 23


Building a solid Integrated services and portering. The Assembly's
move towards integrated delivery
foundation for Integrated facilities management of soft services was driven by its
is the bringing together of several own objectives.
continued delivery
support services into a single
of benefits management structure. The In essence, these objectives
resulting simplified management centre on customer care. Since
and reduction in administration, as 2007, this partnership has
compared to managing multiple resulted in:
contractors, enables efficiency
benefits to be embedded leading, Ancillary services commended
in turn, to cost savings. by employees and visitors
62% increase in sales in the gift
Often applied to services shop
assembled into soft FM or hard FM Site awarded ISO 9001-2000,
packages, this model enables ISO 14001-2004 and OHSAS
clients to continue to manage the 18001-2007 with no non-
contract from an operational conformances
perspective, but always one step Award of Compass Group UK &
removed from the frontline. This Ireland Centre for Excellence status.
creates the opportunity to build a
collaborative approach with the Through the trust that is built in an
supplier in developing appropriate integrated facilities management
solutions to the more challenging model, teams are aligned and
aspects of the FM provision, where cultures merge with the client
organisational understanding and organisation. There is opportunity
insight into core business for synergies and efficiencies. This
objectives are invaluable. avoids duplication and directs
resources towards a customer-
For example, a Eurest Services focused service for the building
team provides an integrated user. Consistency is at the heart of
services solution for the 108 this model, with success built on an
Members of the Northern Ireland open relationship and clearly
Assembly, plus the 400 support defined objectives shared by the
staff based at Stormont. The 73- client and the service delivery team.
strong team is responsible for a
range of services, from catering John Brownless, UK Sales
and floral displays, reception and Director - FM, Compass UK &
helpdesk, through to cleaning Ireland

Facilities Management: realising the value of the investment 25


A 'joined-up' service TFM relationship, in part by pioneering
the PAS 11000 approach to true
with a single point TFM - total facilities management - collaborative working, now

of delivery describes the delivery of a full enshrined in British Standard BS


service in the main areas of FM, 11000. This journey began in 2006
often including mechanical & with a determination to re-engineer
electrical maintenance, building the FM delivery model, moving
fabric, cleaning, catering, security, from service line contracts to
grounds maintenance, waste bundled services, then to
management and front-of-house integrated services and on to TFM.
services via one lead contractor.
NATS has seen real benefits in
The core principle of TFM is the this transformation over the years:
provision of a 'joined-up' service
with a single point of delivery. This Cost reduction of 16%
approach, when fully implemented, Multi-skilling, employees having
can provide customers with the an interesting variety of job
following benefits: duties
One-team ethos and culture
Clear accountability for the Improved morale
delivery of services Enhanced career opportunities
Reduced management layers in Prioritisation of tasks and
both customer and supplier outputs linked to the client's own
organisations targets
A common data platform giving
open access to all data The TFM model has proven its
Single reporting and billing value as a vehicle to improve
No margin on margin service and reduce cost in the
right circumstances. The BS
Value is created through the 11000 methodology is also a
quality of the relationship valuable aid to clients and
between the customer and the suppliers to collaborate together
provider - true of all FM to share the benefits of this
contracts, but particularly in the approach.
case of TFM.
Paul Worland, Director of
EMCOR and air traffic control Business Development,
organisation NATS have built a EMCOR UK
highly successful value-oriented

Facilities Management: realising the value of the investment 27


6 Conclusion

If an FM strategy is Facilities management is a


discipline that touches virtually
Pressure for change is greater
when significant external
based on a sound every aspect of operations at influences, such as poor
vir tually every organisation, economic conditions, are felt
understanding of needs public or private. In that sense, it keenly of course. It is natural for
and opportunities, makes an invaluable organisations facing this
contribution to both day-to-day pressure to review all their
clear objectives, business and to strategies and activities; but to impose change
effective plans for the future. If that in the operation of facilities
contribution is not fully realised, services without following a
communication and the need may be for greater thorough process such as the
responsiveness to communication and promotion one outlined in this paper is a
or for a fresh look at service mistake which may prove costly,
change - it will deliver delivery and management. both in economic and
fully on the benefits reputation terms. Act in haste,

promised.
Facilities management is also a repent at leisure is an apt
big, diverse and dynamic industry, message here.
with the UK outsource market
valued at well over 100bn. Whatever service solution is
adopted - and however it may
Whether part of an in-house, change over time - if an FM
outsourced, or mixed mode strategy is based on a sound
service delivery model, facilities understanding of needs and
management is there to ensure opportunities, clear objectives,
corporate objectives are met. effective communication and
There is no 'right approach' to responsiveness to change - it will
whether it should be handled deliver fully on the benefits
internally or externally via promised.
contract. The right decision for
any organisation depends on
the specific circumstances and
context.

Facilities Management: realising the value of the investment 29


7 Acknowledgements

www.workplace-futures.co.uk www.i-FM.net www.fmassociation.org.uk

This White Paper grew out of the Workplace Futures is organised Workplace Futures is supported
Workplace Futures conference each year by i-FM the by the Facilities Management
series. award-winning web-based news Association (FMA).
and information service catering
Specifically, the need for such a to the needs of the facilities The FMA is the only trade body
paper, as well as the inspiration to management community. for employers in the FM sector,
produce it, grew out of the 2010 which works for its continued
programme (People, Service and Updated every business day, growth and development. FMA
Profit: a meeting of minds) and the site delivers a unique member companies have a
then 2011 (Commoditisation vs service - easily accessible, fully collective annual turnover of
Service Solution: which is the searchable and highly topical. more than 40bn and employ
future of FM?). more than 500,000 people across
The pioneer when it was the UK.
Each conference programme established more than decade
since the launch of the series in ago, i-FM is still the only online This document incorporates
2007 has tackled a different resource an FM needs. much of the content of Inside
issue in the FM sector; but an Out, a director's guide to FM
underlying theme throughout If you dont have access to the decision-making produced by
has been the comparatively low site - then please sign up at: (the now inactive) Action FM,
'name recognition' that www.i-FM.net/signup a 'ginger group' working for
continues to characterise improved communication and
facilities management, along collaboration within the sector.
with the associated tendency
toward under-appreciation of
the value it both represents and
contributes to UK plc.

If youre in FM, you need to be on i-FM.

i-FM would specifically like to acknowledge the sponsors of Workplace Futures 2011.

Facilities Management: realising the value of the investment 31

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