FACILITY MANAGEMENT IN THE NORDIC REGION

1. ISS & NORDEA: FACILITY
MANAGEMENT IN THE NORDIC
REGION
CREATED BY: Group-1

2. 2
ISS & Nordea Intro & Strategic choices
Osho Kharbanda
Flow of presentation
Group 1:-Anmol, Anurag, Ayush, Barnaa, Osho
Competitors, Market scenario & Negotiation
Barnaa L. Dekaa
Implementation of Output based model
Anurag Chaturvedi
Quality Measures & Control
Ayush Gupta
Governance and Baseline
Anmol Gupta

3. Introduction
6 month Evaluation Meeting
March 2011: Facility Manager at Nordea Bank AB optimistic about six-month evaluation meeting for Nordea’s service provider ISS.
Account Manager at ISS: Nordea’s One of biggest client in Nordic region. Reflect on last Six-Month effort of implementing proper
routine, Facilitate more trust in company’s relationship. Concern over Nordea’s request for further increase in service levels.
Scope for improvements Right Tools & methods to measure
quality
Increase number of innovation in
service operation

4. 4
1. Established as a result of mergers
between Danish Unibank, Swedish
N o r d b a n k e n , t h e N o r w e g i a n
Kreditkassen, and Finnish Merita Bank.
2. Largest financial group in the Nordic
region, with activities in corporate
banking, retail banking and private
banking.
3. 1,400 branches in 19 countries.
4. Values such as professionalism, value
creation and accountability were key
factors in handling the business of the
company’s 11 million customers.
Nordea Bank AB
Controlling Risk

5. 5
Outsourcing
Focus more on the company’s primary activities
— banking — Nordea’s top management made
a strategic decision to outsource various
peripheral activities such as catering, security
and cleaning.
Integrated facility management (IFM)
Pan-Nordic approach, to create standardised
processes across the region. Individual branch
managers were given the authority to negotiate
their own contracts. Company was moving
towards an integrated facility management
(IFM) model.
At Nordea’s-We Avoid Risk
In Denmark, Finland and Sweden-ISS. However,
within Norway, Coor Service Management (Coor).
Nordea’s policy of reducing risks by not putting all
of its activities, efforts and investments towards
only a few opportunities.
Optimal Solution for all
Nordea was gradually moving away from a
country-based structure and towards a line
organisation. In the past, Nordea had worked to
find the best solution in each country; now the
company wanted to find the optimal solution for all
Nordic countries. In line with strategy of focusing
on its core activities, expand its outsourcing scope
from only “soft” facility services, such as cleaning
and catering, towards including “harder” services,
such as space management and repair and
renovation services.
Strategic Choices
Nordea’s Bank

6. 6
1. ISS started in Copenhagen in 1901 as a
security company with only 20 employees.
2. By 2011, ISS was the world’s largest
commercial provider of facility services,
employing 520,000 people in more than 50
countries.
3. ISS provided single, multiple and integrated
facility services within five areas: cleaning,
catering, office support, property services, and
security.
4. One of ISS’s main competences was “people
management” — namely, managing low- and
semi-skilled labour.
5. Unlike most competitors in the industry, ISS
used very few sub-contractors. Instead, ISS
focused on using its own employees to
conduct all services, from cleaning to security.
ISS: Facility Services
A Global Service Provider

7. 7
Multi-Local
ISS had always followed a “multi-local” strategy
in which each country’s organisation maintained
local control in order to develop business
according to local market needs.
Umbrella Organisation
coordinate the company’s activities in the four
Nordic countries, promote best practices and
accommodate the demand for Nordic solutions.
IFM Model
ISS delivered many services that were either
provided individually or integrated through the IFM
model. The company trusted that the IFM model
offered clients a more cost-effective solution due to
the synergies derived from the integration.
Smoother Communication
Synergies were obtained through the company’s
intensive training of its employees, the sharing
of knowledge across services and the careful
planning of work tasks. Furthermore, the IFM
model eliminated the “middleman” layer so that all
contact was directly between ISS account
managers and clients. This made communication
smoother in terms of knowledge sharing and
accountability.
Strategic Choices
ISS

8. 8
01.
In 2011, Nordic Region
was most mature market
for Facility Management.
02.
Entry barriers low No. of
Competitors high
03.
ISS had attained Market
Leader position in 4
Nordic countries
Market Share
ISS: Across nordic’s countries
0%
800%
1,600%
2,400%
3,200%
MARKET SHARE
23
32
22
23
DENMARK FINLAND NORWAY SWEDEN

9. 9
1.Demand for FM solutions had grown steadily.
2.Cost-reduction and outsourcing of non-core activities
3.After Global Economic Crisis (2008) demand rose for
multi-services and integrated service solutions
4.Yet in 2011, IFM services was still small part (20%) of
ISS’s total FM revenue
5.However market trend pointed to higher demand for
IFM solutions

10. 10
01.
The Compass Group
(British)
02.
Sodexo (French)
03.
Johnson Controls
(American)
04.
Aramark (American)
Competitors: ISS
IFM Market dominated by few large players, Including ISS

11. 11
1.2010-11 ISS appointed as Nordea’s FM partner for 20+
locations in Denmark, Sweden and Finland
2.Scope of services were both “Soft Services” (Receptionist
Services, Internal Mail, Catering etc.) and “Hard
Services” (Repair, Moving, Space Management etc.)
3.Contract served 4,300 workplaces, cleaning of more than
1,30,000 sq. meters and daily meals of 12,000+ employees
4.New innovation in the contract was the “Output-based
Approach”
5.ISS was given greater managerial role within Nordea
Negotiation of Contract

12. 12
1.Relationship between ISS and Nordea can be divided into 3
phases:
• The First Phase (1976-2004) Focus on clearly specifying how
to conduct services in each location
• The Second Phase (2004-2010) Focus on standardizing
services across the locations
• The Third Phase (2010 onwards) Focus on Output Based
Services (quality was more important than method)
2.Annual turnover of contract was 30 million Euros
3.Relationship kept evolving between ISS and Nordea
Negotiation of Contract

13. 13
Goal: To collaborate on specifying details of the output based contract,
develop a proper governance structure to handle daily problems and to
build interpersonal relationship.
How it is achieved?
• First 6 months of new contract
• Weekly conference calls made between key people at Nordea and ISS
• Agreement on specs and quality levels to be done
• Clauses on penalties were suspended
Normal Phase: Meeting were held once in a month.
Contractual agreement became valid in all respect along with penalty
clause.
Transforming Period

14. 14
Challenges Faced
1.Clause not having service description leads to
subjective interpretations. E.g. catering service
contract includes food should be healthy ,varied and
of high quality. How quality to be measured not given.
2.Price of the contract was difficult to be determined
3.Experts were soon commissioned to determine a
precise and operational definition that would also
make possible for ISS to deliver its service within
price limits set by Nordea.

15. 15
Aligning Expectations
1.Alignment of expectation written as Service Level
Agreements(SLAs)
2.SLAs= legal formulation of how the quality of a particular
service should be.
3.SLAs useful in maintaining similar level of quality in services
across different countries. For this adjustments were made in
SLAs to accommodate specific local needs and demands.
4.Appropriate communication to Nordea Employee regarding
the changes in implementation of services with respect to
new contract.

16. 16
Quality Control and Measurement
1.Quality of the delivered service was the main
performance indicator, measurement of quality was
the key.
2.Emphasised by KPI(Key Performance Indicators)
mentioned in the contract.
3.ISS conducted a monthly assessment among
Nordea employees of their satisfaction level with the
services delivered.

17. 17
Quality Control and Measurement
1.The responses to these (short questionaries,
answerable in a few minutes) were then compiled into a
satisfaction index.
2.These satisfaction scores were listed as traffic light
colours( red-satisfactory, green-unsatisfactory).
3.Introduction of APPA to make the process less biased.
4.Independent quality surveys in various departments of
Nordea and reports open to comments.
5.Comments were directed to ISS Internal Support Unit.

18. 18
Control Measures
1.Informal user groups, consisting of departmental
secretaries.
2.SoS.nordea.com, served as a formal help desk.
3.In addition, Nordea’s Facility Unit conducted an
Annual End User survey and Customer Satisfaction
Survey.
4.No third party was involved.
5.Penalties, monetary fines, included in most serious
cases.

19. 19
Standardisation of Services
1.PAN Nordea level of Standardization.
2.Streamlining of Services by SLAs
Rebuilding Trust
Long relation: Advantage for ISS or matter of
concern?

20. 20
Catering in Denmark
1.Issues to be handled at country level
2.Notable rotation of employees in catering services
3.Quality can be fixed overnight but not Image
4.Special trained Chefs to gain confidence
5.Lunch invitations to address more complaints
Losing Norway
• Deficient quality levels
• Contract given to another service provider

21. 21
Finding the Baseline
1.From Control Measure towards establishing IFM
2.Situation of Denmark canteen stabilized
3.Norway still a goal
Call for Innovation
• Innovation: Cost Reduction or Better and efficient quality?
• How to tap ideas?
Incentives to Change
• From Bonus to sharing of Profits.
• Focus on creating value added innovations.

22. 22
Conclusion
1.True Strategic Partnership
2.Shared Vision
3.Customer Vision on Nordea
4.Easy to Deal with Solutions
5.Seamless workday of Employees
6.Increase in Productivity
7.Innovate Partners always willing to try new things
“Service with Human Touch”

23. Thank You
Any Questions?