Strategic Management of Built Facilities Strategic Management of Built Facilities Craig Langston and Rima Lauge-Kristensen RO Routledge UTLEDG Taylor &. Francis Group E LONDON AND NEW YORK First published by Butterworth-Heinemann First published 2002 This edition published 2011 by Routledge 2 Park Square, Milton Park, Abingdon, Oxon 0X14 4RN 711 Third Avenue, New York, NY 10017, USA Routledge is an imprint of the Taylor & Francis Group, an informa business © Craig Langston and Rima Lauge-Kristensen 2002 All rights reserved. No part of this publication may be reproduced in any material form (including photocopying or storing in any medium by electronic means and whether or not transiently or incidentally to some other use of this publication) without the written permission of the copyright holder except in accordance with the provisions of the Copyright, Designs and Patents Act 1988 or under the terms of a licence issued by the Copyright Licensing Agency Ltd, 90 Tottenham Court Road, London, England W1P 0LP. Applications for the copyright holder's written permission to reproduce any part of this publication should be addressed to the publishers British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloguing in Publication Data A catalogue record for this book is available from the Library of Congress ISBN 0 7506 5440 6 Typeset by Avocet Typeset, Brill, Aylesbury, Bucks Contents List of contributors vii Foreword ix Preface xii Introduction xiv PART 1: CORPORATE GOALS 1 1. Workplace ecology 3 2. Worker productivity 9 3. Strategic facility management 15 PART 2: FUNCTIONAL PLANS 23 4. Space planning 25 5. Needs analysis 35 6. Portfolio management 44 PART 3: INFORMATION MANAGEMENT 51 7. Communication strategies 53 8. Building management systems 63 9. CAD databases 82 PART 4: RISK MANAGEMENT 91 10. Risk and uncertainty 93 11. Outsourcing 102 12. Continuity planning and disaster recovery 110 PART 5: PROPERTY MAINTENANCE 119 13. Maintenance planning 121 14. Obsolescence and refurbishment 128 15. Support services 134 vi Contents PART 6: FINANCIAL MANAGEMENT 141 16. Feasibility studies 143 17. Budgetary control 151 18. Tax depreciation 159 PART 7: VALUE MANAGEMENT 171 19. Whole-of-life assessment 173 20. Building in value 188 21. Multi-criteria analysis 196 PART 8: BUILDING QUALITY ASSESSMENT 209 22. Due diligence 211 23. Premises audits 220 24. Environmental health and safety 227 Index 237 List of contributors Editors Craig Langston - Associate Professor in Construction Economics at the University of Technology, Sydney (UTS). Before commencing at UTS, he worked for a professional quantity surveying office in Sydney. His PhD thesis was concerned with discounting and life-cost studies. He developed two cost-planning soft- ware packages (PROPHET and LIFECOST) that are sold internationally, and is author of several books covering aspects of construction economics and facility management. Rima Lauge-Kristensen - Architect and research scholar. She holds a PhD in physics and a bachelor of arts degree in architecture, and has worked in a number of roles relating to the construction industry. She has particular expertise in the physics of building systems and emerging technologies that aim to minimize energy demand. Specialist contributions Rick Best - Senior Lecturer in Construction Economics at UTS. He has degrees in architecture and quantity surveying and has research interests in information tech- nology, energy in buildings and low energy design strategies. Rick is undertaking research in district energy systems and the international performance of construc- tion projects, and is the co-editor of several books on value in building. Gerard de Valence - Senior Lecturer in Construction Economics at UTS. He has an honours degree in economics from the University of Sydney. He has worked in industry as an analyst and economist. His principal areas of research interest include the measurement of project performance, economic factors related to the construc- tion industry, and the impact of emerging technologies. viii List of contributors Grace Ding - Lecturer in Construction Economics at UTS. She has a diploma from Hong Kong Polytechnic, a bachelor's degree from the University of Ulster and a master's degree by thesis from the University of Salford. She has practised as a quantity surveyor in Hong Kong, England and Australia. Grace is currently under- taking PhD research in the area of environmental performance measurement. Peter Smith - Senior Lecturer in Construction Economics at UTS. Prior to his cur- rent appointment he worked for a large professional quantity surveying practice and an international construction and property development company. He is currently undertaking PhD research and has an interest in consumer investment advice and property maintenance. John Twyford- Senior Lecturer in Construction Economics at UTS. He has a doc- torate in judicial science and is editor of the Australian Construction Law News- letter. He has significant industry experience in the development and administration of construction contracts and has been involved in educating students in this field for more than 20 years. Foreword Wes McGregor Only the future lies ahead. The strategic imperative of all enterprises that aspire to success is to view the future as an opportunity. An opportunity to develop and then implement plans leading to sustainable comparative advantage over their competitors. Strategic management is the means of guiding an enterprise through its actions to its chosen future. It involves determining purpose and objectives; formulating plans of action to achieve these objectives, most probably in a climate of change; imple- menting the actions; then evaluating the outcome against the objectives and making changes where required. Strategic management has for long been an established component of business, yet its application in the management of key resources of business - its property and related facilities services - has often been conspicuous by its absence. Why? Ranging as it does from maintenance to security, and from cleaning to workplace planning, facilities management is more often than not perceived as a low-grade activity of no real consequence to business. Concomitant with this, facilities man- agers are generally perceived as having a low level of contribution to the success of the organization. Nothing could be further from the reality. The built environment for work (workspace) is rarely, if ever, neutral in its influence upon the performance of the enterprise. It either helps or it hinders. It either supports or it inhibits. It either stimulates or it demotivates. Workspace and its facilities infrastructure are the tools at the disposal of the peo- ple in the business to enable them to achieve the enterprise's goals. The key aim of their strategic management is to add value to the organization through the effective management of the built environment. Yet the perception of business leaders is all too often that facilities and their managers are resource consumers rather than value adders. Changing this view is a major challenge faced by all facilities managers. The performance of facilities managers impacts upon the performance of their organizations' workspace, which itself has a direct impact upon the performance of workers and hence that of the enterprise as a whole. Through their actions, facilities managers have a vital part to play in enhancing corporate performance and thereby