1. THE DIGITAL FM: How to Cut Costs by 30% While Increasing Quality

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4. Review Session Learning Objectives
Learning actions and structure that lead to 30% less cost, increase time to increase value
Use performance metrics to communicate effectively to ensure buy-in at all levels of the organization
Learn how to increase the capability of the FM
Minimizing the amount of information to learn, but increasing the understanding of the FM impact to the organization

5. Introduction - Meet Our Presenter:
DEAN KASHIWAGI
Emeritus Professor, Researcher, and International Consultant
IFMA Fellow, Fulbright Scholar & Professional Engineer
Created a robot and language of metrics to assist FMs
14 year service in USAF
Total of 38 years industry experience
Championed programs to advance the FM profession, and continues to prepare the next generation of FMs

6. Digital FM: How to Cut Costs by 30% While Increasing Quality
Dean Kashiwagi, P.E., PhD
KSM Inc. | Director
CIB W117 Coordinator
Fulbright Scholar
IFMA Fellow

7. Who is the CEO? Who is the “FM Professional of the Future”?
“Non-Observant”
Confusion
Surprised
Thinking
Decisions
Rule Based
Complex
No Metrics
“The Observant”
Understanding
Sees Future
Observe/Know
No Decisions
No Control
Simplicity
Metrics
Consistency
More likely
Differences
LS: Observant
RS: Non-Observant
Needs all details
Inconsistency
Cannot tell the difference

8. What characteristics cuts cost?
Add value
Maximize thinking
Maximize decision making
Maximizes the use of information
Technical details
Detail oriented
Strategic goals
Language of metrics
High stress levels

9. Case Study on Thinking and Decision Making
Dutch researchers built a computer formula designed to minimize decisions
The formula examines data and picks the best contractor for a job
Researchers tested the computer’s ability to predict the outcome of actual past projects
The same test was given to project 30 professionals and 60 college freshmen

10. Test Scores (Lower # is better)
Overthinking?
Test Group
Test Scores (Lower # is better)
Perfect Score
Computer
109
Students
189
Professionals
223
Randomly Generated Answers
310
Worst Case Score
650
Computer is twice as efficient as professionals
Students are 18% more efficient than professionals
Computer used far less information than professionals

11. New Business Paradigm Dictated by Reality and Observing People Who Are Experts

12. System Created to Assist People to See

13. System Created to Increase Value and Performance

14. Minimize Risk by Minimizing T&DM

15. Leadership Structure Robotics, Automation
Identification and utilization of expertise
Expertise [non-automated]
Requirement of the Future
Increased efficiency in all areas
Increase quality
Minimize cost
Increase value of people

16. Professionals and Experts of the Future
Robotics, Automation
FM Professional of the Future: Identification and utilization of expertise
FM Associate of the Future: Expertise [non-automated]
Requirement of the Future: Identification and utilization of expertise
Increased efficiency in all areas
Increase quality
Minimize cost
Increase value of people

17. Minimize Complexity and Communications
Cut cost by 30%
Identify and utilize expertise
Use metrics and allow experts to utilize BV structure instead of relationship based traditional practices
Use BV structure to increase level of expertise
Simplification will reduce stress, be easily understood and increase the value of human life

18. Best Value Approach Structure Cuts Cost
Client’s representatives who use BV structure [BV expert]
Structure identifies and utilizes expertise
Expert Vendors create transparency
Structure mitigates risk that vendors do not control
Documented using metrics
Win-win [best value for lowest cost]

19. Testing Cost Cutting Structure
25 years [1992]
$17.6M Research Funding
1,900 tests delivering $6.6B of services
98% customer satisfaction
9 countries, 33 states
Minimized % project cost
Increase quality, customer satisfaction and vendor profit
54 Licenses, Most licensed technology developed at ASU [most innovative university for two straight years].

20. Traditional Relationship Based MDC vs
Traditional Relationship Based MDC vs. Utilization of Expertise [Logic vs. Control]
High
I. Relationship or Price Based
II. Best Value
IV. Unstable Market
III. Negotiated-Bid
Land of the blind
Land of busybodies
Group therapy
No accountability
Everyone has great value
Transparency
Language of metrics
Identify and utilize expertise
Value of expertise increases
Lower cost and high quality
Perceived Competition
Performance
Low
Minimized competition
Long term
Relationship based
Vendor selected based on performance
Utilize Expertise (No Thinking)
Manage, Direct and Control [MDC] (Influence)

21. Minnesota Tests [6 years]
General Overview
Overall
Group 1
Group 2
Group 3
Group 4
Total Number of Projects
399 8 21 10
355
Total Awarded Cost ($M)
$434.88
$37.81
$17.24
$5.07
$332.70
Overall Change Order Rate
8.83%
3.73%
4.04%
1.27%
10.16%
Client
7.61%
2.15%
1.08%
0.33%
Designer
0.69%
1.68%
2.07%
0.63%
Contractor
0.01%
-0.21%
-0.17%
0.00%
Unforeseen
0.52%
0.12%
1.06%
0.31%
0.51%
Overall Delay Rate
47.17%
35.31%
1.59%
16.38%
51.68%
21.92%
15.26%
7.41%
24.13%
4.47%
5.69%
8.97%
4.48%
2.65%
10.93%
2.42%
4.54%
3.42%
5.04%

22. School District 287 Plymouth, MN Tom Shultz, CFM
Active or Recent Research Partners
Updated: 12/23/2014

24. School District 287 Report
Project Name
Value ($M)
Percent Complete
Duration (Months)
Schedule Delay %
Change Order
Client Satisfaction
NEC – General Construction
$25.9
100% 17 0%
2.8%
10.0
NEC – Technology Systems
$1.6 7
32.7%
0.9%
7.6
NEC – Demountable Walls
$2.0
0.4%
9.0
TOTAL:
$29.5 11
11%
2.9%
8.9
Notes:
1. Technology Systems vendor was not selected using BV
2. CM done by owner saving client $2.6M
3. Tom Shultz won the 2011 IFMA FM of the Year award

25. Three latest tests in Minnesota
$65M City of Rochester Convention Center Modification
$20M City of Roseville Parks and Recreation Project
Rochester school district

26. US Army Medical Command [5 years]
General Overview
MEDCOM
Total Number of Projects
619
Total Awarded Cost ($M)
$973.94
% Over Awarded Budget
5.50%
Client
4.13%
Designer
0.60%
Contractor
0.00%
Unforeseen
1.31%
% Delayed
41.13%
30.84%
0.25%
1.48%
8.57%
Before report:
Did not have a way to track projects.
Unaware how much cost or time deviation was occurring.
Thought the vendors were “cheating” them.
Could not quantify problem was coming from.

27. Source of Risk Owner 90% of all project cost and time deviation
Minimize thinking and decision making – expose what they can by observation
Identify and utilize expertise to lower cost
Vendors
1% of all project deviations
Use language of metrics to identify capability to do unique requirement
Detailed preplanning of everyone’s activities
Simplified milestone schedule
Track time and cost deviation
Vendor deviation is less than 1%

28. Tests in U.S. Over 25 years State of Hawaii State of Utah
State of Georgia
United Airlines
Schering Plough
Entergy
Federal Aviation Administration
Harvard University [2005 CoreNet Global Innovation of the Year]
U.S. Army Medical Command
State of Oklahoma
University of Minnesota and other states
State of Arizona Department of Environmental Quality
Kamehameha Schools

29. 1st Government Test in Netherlands $1B Infrastructure Delivery
Rijkswaterstaat Corporate Dienst
11 februari 2009
1st Government Test in Netherlands $1B Infrastructure Delivery
Infrastructure repair critically needed [drivers spend 1-2 hours on road going and coming].
Procurement and execution takes too long [12 years].
Over-management of vendors.
16 projects, 6 awards, $1B test of best value PIPS.
Goal is to finish 10 projects in 3 years. 29
Kick-off Spoedaanpak 29 29

30. Program Results 15 projects finished (goal was 10).
Program Results
Procurement and project management application
15 projects finished (goal was 10).
25% faster delivery time of projects.
50–60% reduced transaction costs and time for both vendors and client.
95% of deviations were caused by Rijkswaterstaat or external [not vendor caused].
NEVI , Dutch Professional Procurement Group [third largest in the world] adopts Best Value PIPS approach. 30

31. Program Dir. of Training: Jeroen van de Rijt
NEVI now understands that the BVA is a Mainstream Approach, but the Weakness is PM/RM
Program Dir. of Training: Jeroen van de Rijt

32. Courtesy of Best Value Group [Jeroen Van de Rijt]
Cataract surgery
Complex IT project
Food Services
Fast-track €800M
Parking Garage €55M
Airport, €100M
Supplies of routine products
Construction works
Super complex
Bio repository 32
Maintenance 8 year contract
Courtesy of Best Value Group [Jeroen Van de Rijt] 32

33. Advancements BVA experts [A+] are thriving [procurement]
Norway running first tests
Poland getting training
India is importing technology into Engineering university
Education and testing in China and Vietnam
Saudi Arabia construction classification is moving ahead with implementation
State of Utah returning to BVA after 16 years of first implementation

34. Best Value PIPS Most Critical Aspects are PM and RM3 2 1
Selection
Clarification
Execution
Pre -Qualification
Award Contract
All Vendors
One Vendor
Differential in capability/expertise
[using nontechnical performance metrics]
Education of vendors
Technical review of scope and vendor plan
Weekly tracking of project deviation.

35. Future of FM
FM professional of the future will identify and utilize expertise
FM associate of the future is the expert who needs to get their expertise through technical training
FM professional and FM associate of the future must be partners in the future
Partnership based on observation and not thinking, decision making and influence

36. Conclusion: Change of Paradigm in the Information Age To Minimize Cost and Maximize Value
Best Value Approach (BVA) minimizes the cost of services from 5 to 30 percent
Automation of the mind that will affect both the FM Professional and the FM Associate of the Future
Help people to learn five times as fast and be more consistent and accountable
Increases efficiency, accountability and profit
Increase the worth of people
Everyone who has a family can start utilizing the “FM of the Future” concepts

37. FM of Today vs. FM of the Future
FM is a Cost
FM Professional is the technical expert
FM Associate is responds to the expert
FM Professional needs technical certification
FM is in C-Suite
FM Professional is a leader and CEO who identifies and utilizes expertise [BVA]
FM Associate is the technical expert
FM Associate needs technical certification
FM professional and FM associate are partners
Language of metrics

38. IFMA WWP: Oct 17 - 20 Paradigm shift in 5 different sessions. Date
Time
Session Title
Room
Oct 17
1pm-5pm
Deep Dive 2: Step by Step to Implement
the “FM of the Future” Approach
Convention Center
Oct 19
8am-9am
Digital FM: How to Cut Costs by 30%
While Increasing Quality
332A
4:15pm-5:15pm
Who Wants to Be a Millennial-aire? –
Nurturing in the Young Workforce
332C
Oct 20
Minimize Project Risk and Costs: A New
Approach to Project Management
340A
11:45am-12:45pm
The FM Compass: Roadmap to Leadership

39. Q&A LinkedIn Dkashiwagi1@gmail.com YouTube KSM-inc.com
Jan 15-19, 2018 (Tempe, AZ)
2018 Best Value Certification, Education and Training

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For attending this educational offering at IFMA’s World Workplace
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