How do you negotiate FM cost control with stakeholders?

There are many ways to communicate with stakeholders; however, the most common ways to negotiate the FM cost controls are during the meetings and or e-mails, where the proposal is shared with all assumptions such as market stability, pros and constraints, opportunities and downword pressures.

En mi opinión, cada cliente tiene una estructura e intereses distintos, son "únicos" lo que conlleva a que tengan necesidades e intereses "únicos" también. Para poder entenderlos con mayor claridad es importante identificar a los principales representantes del cliente que tengan relación con los servicios a ofrecer de esta manera se pueden construir soluciones que se adapten realmente a las necesidades, entender mejor cuales son los puntos de dolor y donde están las oportunidades de, por ejemplo generación de valor o ahorro de costos.

To negotiate FM cost control with stakeholders, it is important to establish clear objectives and priorities, gather comprehensive data and analyze current costs, develop a range of cost-saving options, engage stakeholders early and actively, present a compelling business case, negotiate with empathy and understanding, establish clear agreements and accountability, maintain ongoing communication and collaboration, monitor and evaluate performance, and recognize and reward achievements.

To do this, you need to compile a comprehensive list of individuals, groups, or organizations impacted by or influencing the project, which includes internal and external stakeholders. Determine the level of influence, importance, and impact each stakeholder holds on the project's success and categorize stakeholders based on their significance. Analyze stakeholders' roles, objectives, motivations, expectations, their concerns, requirements, and potential sources of support or opposition, so you can establish effective communication channels tailored to each stakeholder group's preferences. Identify the stakeholders' goals, concerns, and expectations regarding cost control in FM and tailor your approach to align with their objectives.

The first step is to Identify key stakeholders, and understand their perspectives, concerns, and power dynamics within the negotiation context. This will lay the groundwork for effective communication and strategy development. Recognizing their varying priorities and authority levels enables the formulation of tailored negotiation approaches, fostering collaborative discussions and mutually beneficial outcomes. This understanding of stakeholders' roles and interests serves as a foundational step towards successful negotiation planning and execution.

I negotiate according to the values, urgency and ambition given to the building. For example : 1/ maintenance is at a minimum to comply with regulations, the expected quality of services to occupants and find an initial agreement with the lessor 2/ In the long term or if the site belongs to us: investment for standards or labels with negotiation with the maintainer over 3 to 5 years In all cases: the transfer of control to the lessor on standards and maintenance for 2 to 3 years if the building has just been delivered is imperative given the environmental risks and decrees

As FM value is assessed, look at both first cost and life-cycle cost. Life-cycle cost has a tremendous impact on process type, impact, viability and overall contribution to the operational bottom line. As well, assessing life cycle can maximize value while minimizing waste from a lean perspective.

Ensuring you have a well planned out and robust 5 to 10 year Capex plan will greatly improve the conversation with the client. Being able to show value and cost avoidance also shows diligent oversight and proactive financial reasoning.

Managing discussions with Stakeholders from my point of view needs to be supported with historical data and lessons learned from previous experiences. Let us start by defining the scope of service and alignment with the organization's mission, goal, requirements, and available budget allocated for buying the service. While looking into it strategically, you can decide to go through a material-based agreement or quality-based agreement. This approach will give the best control over cost while maintaining high-quality standards. Not to forget that quality-based agreements require frequent monitoring efforts which need a trained team with enough documentation and a quality assurance matrix.

You would need to build trust and confidence of character to your stakeholders. To achieve this, you need to maintain transparent communication regarding cost control initiatives, progress, and outcomes. This rapport and credibility will facilitate collaboration and support from the stakeholders. By establishing clear reporting mechanisms, stakeholders would be updated regularly. The aim is to foster positive relationships with stakeholders based on trust, transparency, and mutual respect. Remain adaptable to accommodate stakeholders' changing needs or expectations.

Stakeholders often do not know exactly what service is needed. This is fatal from a cost perspective. If we need the supplier to understand what we actually need, it becomes expensive. This is where we can escalate to the management level and draw attention to shortcomings. Principle: no criticism without a suggestion for improvement. → Early involvement of purchasing.

Negotiation transcends a win-lose paradigm; it thrives on seeking mutual understanding and value creation. Emphasizing collaboration over competition fosters an environment where all parties aim for mutually beneficial outcomes. By focusing on shared interests, exploring common ground, and seeking creative solutions, negotiations can yield agreements that satisfy the needs and objectives of all involved. This approach not only strengthens relationships but also promotes long-term cooperation and trust, shaping sustainable and positive outcomes for both parties involved in the negotiation process.

Address conflicts or disagreements among stakeholders promptly and diplomatically. Mediate discussions and find mutually acceptable solutions to maintain project momentum. To negotiate effectively you would need to remain adaptable to accommodate stakeholders' changing needs or expectations and be flexible in adjusting project plans or strategies based on their feedback.

In the area of facility management (FM) cost control, the culmination involves negotiating and finalizing agreed-upon terms with stakeholders. This step marks the convergence of insights, perspectives, and strategies to establish a framework that aligns with both parties' expectations and objectives. Negotiating FM cost control parameters entails transparent discussions, ensuring clarity on cost structures, budget allocations, service levels, and key performance indicators (KPI). By reaching a consensus on these terms, stakeholders forge a collaborative foundation for effective cost management, fostering trust and accountability in the FM endeavors.

As a rule, the stakeholder already has a plan of services that are required to maintain or even expand the FM area (site closure is not included here). As purchasers, we can try to become part of the budgeting process through relationship management. With the information gained from this, we can proactively plan the important tenders for the following year together with the stakeholder. Planning means: specification / SoW --> long list --> short list --> negotiation (possibly e-bidding?) --> contracting.

From my experience, I can state that Negotiating FM cost control with stakeholders involves a collaborative process to define, align, and agree upon cost-related aspects of facility management services. This negotiation typically encompasses discussions on budget allocation, cost-saving strategies, service levels, and performance metrics. It aims to strike a balance between cost-effectiveness and meeting stakeholders' needs, ensuring an optimal utilization of resources while maintaining quality and efficiency in facility operations. Effective negotiation fosters transparent communication, mutual understanding, and agreement on cost control measures, laying the right foundation for successful FM practices and stakeholder satisfaction.