By Marty Chobot
Published in the March 2007 issue of Today’s Facility Manager
What is churn? Simply put, it is the process of moving employees and assets—as individuals or as large groups. In its 2002 “Project Management Benchmarks” report, the International Facility Management Association (IFMA) defined churn rate as the number of moves in a year expressed as a percentage of the total number of offices occupied.
All facility professionals have to deal with churn. Organizations are dynamic entities that must move people and equipment in order to adapt to change. Whether driven by business change, facility renovations, or the daily activities of occupants, moves are here to stay.
In addition, moves are perhaps the most difficult, as well as most visible, process facility professionals need to coordinate. There are many stakeholders in the process (HR, IT, telecom, third party vendors, and let’s not forget, the person who is moving), and it requires a lot of communication and interdependencies to be successful. There are very obvious and painful outcomes when moves go slowly or errors occur.
But while churn is a fact of life, facility professionals can control the high costs, downtime, and confusion that are often symptoms of this condition.
In the 2002 IFMA Project Management Benchmarks report, the mean churn rate across the surveyed organizations was 41%. One company even reported a churn rate of 167%! While most organizations are unlikely to reach such a high churn rate, even a rate of 50% can add up to undesirable costs.
For example, if an organization has 2,000 occupants on site and a churn rate of 50%, this equates to moving 1,000 people each year at the site. If the average cost per move is $300 that is an expense of $300,000 per year.
But there’s more. That cost per move only takes into account direct costs. What about the indirect cost of the moved person’s interrupted productivity? With a conservative estimate of four hours downtime and an average fully loaded cost of $50 per hour for an employee, this adds another $200 to the move. The cost rises to $500,000 per year, along with nearly two person years of lost productivity!
There are really two ways to combat the impact of churn: better strategic planning to reduce churn rates or better move coordination to reduce the financial and productivity impact of each move. Reducing churn rates is the best bet, since no move costs less than the move that is avoided through better planning.
According to Jon Ryburg, president of the Facility Performance Group in Dexter, MI, “An ability to forecast the long-range and near-term facility requirements of a company’s operations accurately does more to reduce churn rates and costs than any other single method.”
The problem is that most facility professionals get too caught up in the day-to-day challenges of managing moves and their other duties to produce and maintain a viable strategic plan. According to the 2002 IFMA Project Management Benchmarks, only 54% of organizations have a current, written strategic plan. As a friend of mine once said, “Folks are too busy chasing the pigs to build the fence.”
Facility professionals either need to add resources, which can be difficult to do these days, or find ways to streamline their move processes in order to gain the time they need to be more strategic and perform better planning.
Moves involve a lot of people and require a significant amount of communication between involved parties. But at a high level, moves all follow the same overall process.
Request Management. Move requests identify which employee(s) must move and when or what large-scale move projects are in the works.
Planning. Before the move starts, move planning entails high-level coordination with internal customers and groups that support the move process such as HR, IT, facilities, and telecom groups.
Coordination. During the move process, move coordination means getting the right information at the right time to internal and external vendors and groups to ensure the move occurs in the proper order and on time.
Process Review. After the move, there is a review conducted using follow-up surveys of employees moved. The move data can be analyzed to uncover issues and determine areas for improvement.
While there are wide ranging strategies for dealing with the physical aspects of moves—universal planning and flexible furnishings, for instance—facility professionals often overlook the significant amount of information and communications generated by these events. This is where technology can play a vital role. Integrated Web based space and move management systems can help to improve move coordination and reduce costs and downtime.
Striving for best practices can facilitate improvements in the move process. As part of that, an integrated workplace management system (IWMS) can assist in reaching the desired goals. An IWMS is generally defined as an enterprise platform that supports the planning, design, and management of an organization’s physical asset base. This platform can interface with graphical and analytical tools such as Computer-Aided-Designs (CAD), Geographic Information Systems (GIS), and business intelligence (BI) tools.
1. Best Practice: Provide visibility into existing and planned space usage. Facility professionals must work with management to understand evolving business needs and goals before they can accurately plan for the spatial changes that will be required. Likewise, education of the management team as to the spatial impacts their decisions will create is also crucial.
There are critical issues for which a facility manager must strategically plan. Will a new product require a new cross functional team? Will that team of people require co-location? How will an upcoming acquisition or merger affect resources? Will employees be reorganized? Keeping abreast of management decisions and the drivers for change will help in planning the move event.
On a more tactical level, a good understanding of how space is currently occupied and used is critical for accurate forecasting.
IWMS Advantage: Manage space occupancy. IWMS solutions can integrate move data with CAD floor plans to visualize existing occupancy as well as future or planned occupancy. Through graphical layouts facility professionals and their internal customers can see vacancies and assigned spaces, including to whom space is currently assigned and future assignments through already planned moves. Real time space occupancy enables self-service moves and ensures accurate planning, preventing double bookings and avoiding unnecessary moves.
An advanced IWMS has the further ability to integrate facility data with human resources information into a single database. As a result, new hires added to the HR system can initiate an on-boarding process in the IWMS. This enables facility managers to increase their on-boarding capacity and reduce lead times.
2. Best Practice: Create a team of move liaisons to manage interdepartmental communication.Identifying a team of people to take on the role of move liaison or coordinator can clarify responsibilities for moves within a given division, department, or group. This creates a repeatable process to continue executing streamlined moves.
Steve Baumgardner, manager of engineering at Berlex, Inc. in Wayne, NJ, says, “[Managers should] lock in a certain group of people (liaisons) that have the ability to talk to management and have the authority to move people. Requests come from the liaison who reports to the department manager. Ninety-nine percent of all move requests come from liaisons. If we get a request from someone else, it is questioned. This saves us time, because we don’t have to track down permission.”
IWMS Advantage: Better communication, better collaboration. Accessible move management solutions enable better communication with internal customers, thus resulting in better collaboration. For example, internal customers—both the liaisons and the personnel to be moved—can be given views of their planned moves to help them prepare. Also, groups like IT can see a list of all moves that require their attention. Real time, point and click tools enable interaction between internal customers as well as provide a vehicle to align internal and external service providers with the move coordinator’s plan.
3. Best Practice: Understand the churn. Some organizations may be well aware of their churn rates, but few can accurately track the associated costs. Churn is necessary within any healthy, evolving organization. The goal is not necessarily to reduce churn, just its impact.
For instance, a pharmaceutical company, Novartis, wanted to manage its 80% churn rate better. The high churn was the result of new building growth, remodeling projects, and cross functional teaming.
Novartis wanted to maintain the competitive advantage of bringing teams geographically together. So rather than give up that key business practice, it sought an improved automated response through the use of software. As a result, it was able to increase its ability to on-board new occupants at its New Jersey headquarters by 50%, while also reducing related move costs and downtime.
IWMS Advantage: Tracking move costs. Tracking move costs allows companies to go beyond the big picture by bringing focus to specific information.
Organizations can begin to track moves by department, by reason, or by type. This detailed information can uncover potential areas for process improvement or the need for a strategic planning session with a specific department. For example, it can become easier to identify departments with higher churn rates or move costs and to concentrate on helping those departments to improve.
4. Best Practice: Automate move management tasks. A fully integrated workplace management system provides Web based forms for move requests and automatically generates e-mail updates to involved parties. Information is electronically routed through the appropriate channels for review and approval beforehand, thus reducing bottlenecks and issues further along the timeline. These communication improvements create accountability, which results in minimal downtime during moves and reduces overall costs.
“We can set up our move management system to send automated e-mails,” says Dave Kuiper CFM, workplace strategist at Herman Miller in Zeeland, MI. “We’ve used this to send surveys to get feedback for continuous improvement from our partners. This is one factor that has helped us increase our group’s customer satisfaction rate to 97%.”
IWMS Advantage: Easy to use. Intuitive, point-and-click designs of the leading IWMS enable users of varying skill levels to work together in an automated environment. This level of usability is required for the adoption of move management systems by internal customers and other move stakeholders.
Web based systems that automate the move process can be the innovative facility manager’s solution to reducing the cost and downtime from churn, creating a better work environment. Client/server or desktop applications of the past provided basic move planning functionality but required extensive user training and, as a result, were not well suited to extending to users across the organization. Today’s Web based technology provides real time, comprehensive move management solutions that allow for easy adoption.
Chobot is vice president of marketing for Raleigh, NC-based FM:Systems, where his responsibilities include conducting market and facility management research, generating new opportunities, working with industry analysts, and developing benchmarking programs.