Setting service standards
Published: 04 September, 2014
Procuring cost-effective service management is high on the agenda for commercial property owners but with FM vital to the smooth running of any shopping centre, cost-savings shouldn’t come at the expense of quality.
Capital & Regional has recently signed a three year contract with its security provider VSG to provide all soft services across its UK shopping centre portfolio.
The new soft services partnership has been launched at all eight shopping centres - The Mall Fund’s six centres in Blackburn, Camberley, Luton, Maidstone, Walthamstow and Wood Green, the Kingfisher shopping centre in Redditch and Waterside in Lincoln - at a cost of £6.4m per year.
After consulting with the management teams at each centre and deciding to combine the security and cleaning services into a single tender to achieve benefits of scale, Capital & Regional’s national facilities manager, Alan Wiggan, researched the market and selected the six service providers he believed had the potential to deliver their vision.
“The tender was complex and hard fought but ultimately the company who probably knew us the best was able to provide the most comprehensive proposition at the best price. VSG have tailored their service design to the shopping centre market and they’ve got a proven reputation. We’ve worked with them for 10 years so we know we have shared values and that cultural fit, and we feel very comfortable that they will deliver the best service at the right price.”
“We have a very clear picture of the cost base having worked out what the average cost per sq ft should be for FM, and we were able to work up a package with VSG,” he adds. “It’s a no risk approach.”
The facilities team at Capital & Regional have developed training plans for all staff and according to Wiggan, they are breaking new ground in conjunction with VSG with specialist security training that is helping it self-deliver more of the previously sub-contracted cleaning. And they encourage staff in both teams to develop new skills, with some members of the cleaning team gaining security licenses so they can support the security team when needed.
“We have committed and reliable cleaning and security teams at each of our sites, which will be retained under the new contract and we will continue to develop new ways to empower them to be all they can be and be part of the memorable customer experience,” he says.
“Customer experience is very important. One of the main tasks for security staff is to provide customer service in one way or another, whether it’s helping a parent find a lost child, helping someone to find their car, supporting retailers or dealing with a situation that’s getting out of hand. They should provide a safe and welcoming environment. That’s their number one objective and it comes very naturally. But as well as being safe, a centre must also be fresh and hygienic - the staff are at the forefront of operations every single day.”
Wiggan believes outsourcing drives best value for tenants through the service charge as well as removing risk for the business. And by working with shopping centre security and cleaning experts, they maintain cutting edge knowledge.
“There is no doubt that competitive tendering is the most cost effective way of procuring services,” he says. “It may be seen by some as old fashioned but it works every time providing you have invited the best service providers in the shopping centre industry to participate.
“A proven shopping centre industry reputation is a good starting point, but cultural fit and shared values are also important. Above all though we have to be able to trust our service partners - trust them to do what they say they will do, trust them to honour their tender prices and commitments and most importantly of all, treat the people who deliver the services in our centres in a way they would expect to be treated.”
The methodology of tender is important, and while output-only specifications undoubtedly work in many areas of FM, Wiggan says it is unrealistic to expect a bidder who may have only visited the centre a few times to be able to successfully re-engineer the operations as part of the bid, and unrealistic of Capital & Regional as the client to hold bidders to unsustainably low prices.
“I normally provide the bidders with the current security and cleaning hours and other metrics that build up the key base data and work with the preferred bidders to refine the cost model ensuring all aspects are properly covered to achieve a clear input based specification and output specification with clear measurable deliverables,” he explains.
People tend to think shopping centres lag behind when it comes to FM service delivery but Wiggan thinks it unfair to compare a shopping centre environment to other commercial buildings: “Shopping centres are large and complex buildings. You can’t have a standardised approach,” he says. “It’s a public building, it’s not like an office where you know how many people are coming in every day and what they’re going to do.”
Among other benefits, the move to bring VSG on board to provide soft services is expected to bring significant investment in new cleaning machinery and equipment. VSG’s tie in with the Compass Group has given it cleaning capability and know-how, an important consideration when it comes to specifying the right cleaning machinery for each centre, an area where Wiggan refuses to cut costs.
“The centre floors are one of our most important areas and it is vital to achieve the best possible standards in the shortest time and to do that we need the best quality machinery on the market,” he says. “They should be able to clean the centre floors to the best possible standards in the quickest time and for that, you need best in class. There are no doubt cheaper models available but cutting costs is a false economy; well-maintained high quality machines will last for two or even three contract terms.”
While some flirted with the idea a few years ago, combining cleaning and security into a single operation is still rare in the shopping centre world but Wiggan believes Capital & Regional will be one of many to take the plunge.
“Things are changing and more and more facilities managers are waking up to the possibilities” he says. “Shopping centres can enhance their customer offering and save money but first you have to know your own operations before you can expect someone else to do it. When it comes to procurement, there are a number of FM companies that have developed a shopping centre pedigree; there is a lot of new capability.”
Capital & Regional has taken a leap in choosing to combine hard and soft services but its decision to extend the contract to VSG after a thorough and hard-fought procurement process is one Wiggan and the team are sure of.
When it comes to best practice in driving innovation in FM, Wiggan advises surrounding your business with FM service delivery experts: “I am part of an in-house team of specialist FM managers, each an expert in our respective fields and we work together on many key projects, looking over the horizon and designing our brand of FM for the shopping centre of the future.”