Co-operation vital in a recession
It will soon be 10 years since we saw a recession. However, after several very strong years there is no getting away from the fact that the economic outlook is weakening. But how is the FM department affected by falling demand in the core business? Is it business as usual, or does service change?
According to Jan Mohlin, Director of Facility Management at Ericsson, a recession often reveals just how good the working relationship between client and supplier really is.
Ericsson outsourced its FM operations in 2000, the overall aim being to reduce facility management costs. Today, all Ericsson service in the Nordic region is sourced from Coor, and the Swedish operation is governed by an internal group of four people, who also have a functional responsibility within Ericsson globally.
Adaptability is key
In a recession, there are higher demands on being able to adapt to the prevailing climate for the core operation. Jan Mohlin says that flexibility in agreements is vital for the FM operation to be able to adapt to a more restrained reality.
“The overriding experience from the last recession was that the agreements we had in place carried on working well even when the economy turned. We didn’t really need to alter the agreements much. There were already conditions in place to downsize the operation, and even to reduce the workforce according to the new situation. Working together with Coor, this all went very well even though the last recession was a very bad one.”
Jan Mohlin says that co-operation between client and supplier is absolutely crucial.
“Some services will always be needed, and there’s a bare minimum that has to be maintained otherwise quality will suffer unduly. That’s why we regularly have an external evaluation consultant look both at the quality of the functions and our co-operation with Coor to see how we’re working together.”
On occasion Ericsson has consciously reduced the quality, although this mostly relates to changes an end user would not notice. According to Jan Mohlin, one important aspect is to work with the utilised space.
“Our focus is on using fewer square metres. This may mean the price per square metre actually increases, but that the cost per employee decreases because we utilise the space more efficiently. This is a constantly ongoing process, whereby we look at how many square metres each employee is using and at ways of concentrating activity in our premises, for instance.”
Better prepared this time round
Jan Mohlin explains that experience from the last recession has made Ericsson better prepared for the one it now faces.
“We’re acting well in advance this time round, and the conditions are different. Last time Ericsson was a company in crisis, whereas things are completely different now. We’re making money and taking market share. What we’re doing now is aligning our costs. We’re trying not to make any dramatic changes, but we’ve started talking to Coor and are looking at different scenarios.”
Jan Mohlin does not think that demands on a supplier are any different in a recession than during a boom, but he does say that it is important for the supplier to continuously gauge the atmosphere.
“The important thing is that the supplier knows when to slow down. We too have a responsibility as a client to communicate our wishes and requirements to the supplier. If, like us, you enjoy a good relationship with your supplier, the discussion is open and productive even when times are hard. We have a long history with Coor and have developed alongside one another. Coor’s strength is that they’ve focused on competence that can develop the operation, which means they also have the right set-up to adapt the operation as conditions change.”
Ericsson is the world’s leading provider of technology and services to telecom operators. The market leader in 2G and 3G mobile technologies, Ericsson supplies communications services and manages networks that serve more than 185 million subscribers. The company’s portfolio comprises mobile and fixed network infrastructure, and broadband and multimedia solutions for operators, enterprises and developers. The Sony Ericsson joint venture provides consumers with feature-rich personal mobile devices.
About the service assignment
The assignment is a function agreement, whereby Coor delivers workplace and property-related service for Ericsson sites in Sweden, Norway, Denmark and Finland.