Comparative analysis of contemporary asset management and facility management. Trends.

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Deyan Kavrakov FRICS, CIPS
COMPARATIVE ANALYSIS
Asset and Facility Management – Spot the
Difference or the Convergence
1st CEE Real Estate Management
Congress
Warsaw, Poland 2016

2. FAQ
What is the difference between Asset Manager and Facility
Manager?
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Where is the borderline between Asset Management and
Facility Management?
Integration or Convergence?

3. “Strength lies in differences, not in similarities”
We must value the differences, but also be aware of
similarities and then learn from one another to excel.
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4. Financial sector’s asset management = wealth
management:
Management of financial assets, cash and
investments instruments on behalf of their owner.
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5. Asset Categories and Types
Purpose of Use
A. Primary business functions assets
(real estate, production machinery
and equipment, plant facilities, tools,
etc.) They are within the scope of
responsibility of AM.
B. Support business functions assets
(buildings, transportation vehicles,
workplace facilities, mobile devices, IT
equipment etc.) They are within the
scope of responsibility of AM and FM.
Essential Characteristics
A. Immovable assets
o Vertical real estate (buildings)
o Horizontal real estate (facilities)
o Infrastructure networks
B. Movable assets
o Physical assets, which are not
permanently attached to the
immovable assets.
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6. Factors of Differentiation
between FM and AM
The asset type to be managed
The organizational/corporate goals
of the asset’s Owner/Investor
Assigned scope of responsibility
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7. Differences
 For the Facility Manager (FM) the leading
objective is optimal work environment
Facility Manager Asset Manager (Physical Assets)
 For the Asset Manager (AM) the leading
objective is maximum Return on Assets and
Asset Utilization (rate)
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 FM’s scope of work are all assets that support
the primary business of a
company/organization
 FM's priority is to improve the User‘s
primary business productivity and
effectiveness
 FM is focused on End User/Occupier
workplace needs and demands while
optimising operational (OPEX) and capital
expenditures (CAPEX).
 FM utilizes CAIFM and IWMS
 AM’s scope of work are all assets utilized by both
primary business and support business
functions of company/organization
 AM's priority is to improve maintenance
productivity and optimise equipment reliability
as per Investor’s production/primary business
targets
 AM is focused on achieving Investor’s
profitability objectives while minimising assets’
capital expenditures (CAPEX)
 AM priority tool is CMMS

8. Agenda and Priorities of the Client
1. Value – minimize Replacement Asset
Value ratio (RAV), thus maximize
Return on Net Assets (RONA)
2. Capital spending – achieve optimal
Capital Expenditure level while
balancing Risk and Performance
3. Operations & Maintenance – target
optimal MTBF (mean time between
failures) and maximize primary
business process reliability
4. End user/Occupier – maintain
effective User feedback in order to
achieve the first three objectives.
User/OccupierInvestor/Owner
1. End user/Occupant – ensure that FM
services are optimal cost/quality ratio and
directed to supporting high productivity of
primary business processes and end users
2. Operations & Maintenance – operate and
maintain the property/asset in support of
the Occupier’s core business activities and
end users demand for continuous, effective
and efficient workplace environment
3. Value – preserve and maintain the value of
the asset/property based on whole lifecycle
4. Capital spending – secure optimal level of
capital spending in order to achieve the first
three goals
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9. Service Focus
Services directed to:
Employee, End User, Customer, Occupier, Visitor
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10. FM Focus
Services directed to:
Employee, End User, Customer, Occupier, Visitor
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11. Operations
Asset Managers prime interest on a daily
basis is in enhancing effectiveness and
efficiency of assets performance and
production processes, by systematic
maintenance management and reliability
engineering of physical assets.
FM is dedicated to improving End
User/Occupier productivity and provide
adaptive workplace environment in order to
meet the changes in competitive marketplace
and stakeholders demands. FM’s vehicle for
accomplishing it is facilities management &
end user service management.
Hard Services Hard and Soft Services
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12. Decision Making in AM and FM
Balancing the trade-offs among Cost/Risk/Performance within
the whole asset lifecycle lies in the core of AM (And FM)
Cost-based Decision Making
Risk-based Decision Making
Performance-based Decision Making
FM adds one more decisive component to the
matrix
End User Service-based Decision Making
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13. Real Estate Asset Management
Strategic Property Management
Corporate Real Estate Management
Strategic Facility Management
Real Estate AM
The Investor’s horizon: predefined business
lifecycle vs. the whole asset lifecycle
The building/property is an end in itself
No operational responsibilities like
maintenance management or reliability
engineering
Control all property generated revenues and
expenditures
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Executed on strategic level, REAM focuses on proactive,
long-term financial planning, which includes investment
analysis, operation analysis and the positioning of a
property or portfolio of properties in the marketplace in
accordance with market trends, conditions and investor
profitability targets. (BOMA)

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Common fundament – the concepts of Whole Asset Lifecycle and Total
Cost of Ownership/Occupancy.
FM & AM use shared management methods like Asset Utilization Rate,
Asset Register, Asset Replacement Value, Criticality Condition Index; Asset
Inventory Management; they utilize similar analytical techniques,
procedures, IT solutions.
Operational level FM and AM scope of services in the areas of
maintenance, operations, safety, logistics, and technical infrastructure.
Corresponding management functions: strategic planning, risk
management, service management, financial planning and control,
performance management, quality management, change management,
project management, energy management, outsourcing, benchmarking etc.
Common Ground of AM and FM
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15. Trends and Perspectives of AM and FM
 Convergence or integration
 Standards
 ISO 55000 (0-2)
 CEN EN 15221 (1-7)
 Integrated Facility Management (IFM)
 Real Estate Facility Management (REFM)
 Mergers & Acquisitions
 C&W and DTZ;
 CBRE and GWS (Global Workplace
Solutions) of Johnson Controls
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16. __________________
If the only tool you have is a hammer,
all problems look like nails.
__________________
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