A Business Proposal to Increase Faceless Infrastructure Performance, and Raise Profits Prepared for Robert Girl Regional Director of Operations Global Workplace Solutions Proposal Number: 01-21 - Northeast A Business Proposal to Increase Facilities Infrastructure Performance, and Raise profits Executive Summary Background Johnson Controls core business is facility management (FM), which we've been in nice our founding In 1885. Johnson Controls has been In the FM business for nearly 60 years.
We have significantly expanded our facilities management capabilities over time, to the point where we now manage 1. 5 billion square feet worldwide - encompassing 72,000 buildings of various types for a wide spectrum of customers. We will bring this vast experience and accumulated best practices to our management of HOC facilities operation. Each year, Johnson Controls purchases over $6 billion in goods and services, externally. As a Fortune 100 company, we leverage the more than 400 purchasing partners we have formed business legislations with around the world through our central purchasing team.
Additionally, we have numerous long-term business relationships with local and 1 OFFS competitively priced in the marketplace. The company has a robust range of technical capabilities that encompass all types of facilities and systems. We are a full Facilities Management company and we know and understand buildings. This expertise will benefit the health care market in all aspects of solution development. The Global Workplace Solutions (GAS) division brings ingenuity to the places where people work, live and travel for over one hundred and twenty five years.
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The brand insistently exceeds the financial results with a track record for sustainable, profitable growth. 2 GAS continually provides value to their customers by following our guiding principles set down by our founder in 1885. These principles incorporate our mission, vision and value proposition we live by and provide for our customer's every day. Johnson Controls mission statement is Exceeding Our Customers' Increasing Expectations. L The mission is founded on quality, innovation, productivity and responsiveness.
All of these are important focus areas and are fundamental in successfully delivering on the Mission at GAS. The GAS mission is rather enhanced by the vision of the organization to enable change and keep our customers agile, because when buildings and environments work better, people work better and businesses perform better 1. Therefore, when incorporating the mission and the vision, GAS has a value proposition that states it will continue to deliver quality services on the ground as our foundation for trust to build competence to bring strategic value to achieve higher levels of Customer Loyalty.
This is demonstrated bellow and implemented through the use of our Strategic Account Management Table of Contents 1. Title Page 2. Executive Summary 3. Table of Contents 4. Objective 5. Recommended Strategy 6. Environmental Impact 7. Implementation Plan 8. Change Management Strategy 9. Key Success Factors 10. Financial Analysis 11. Risk Management Plan 12. Appendix A 4. Objective increase productivity, increase efficiency, significantly lower the cost of operations, and implement cost control systems, programs and methods throughout the healthcare market place.
Through our communications with numerous focus groups, as well as our thorough analysis of the trends in the outsourcing industry, we are confident that implementing the solution that we have proposed in this document will result in inconsistency of services, life-cycle cost savings and world-class facilities management. As one of the largest provider of integrated real estate and facilities management services in the world, GAS will bring its expertise and reach to the health care arena.
Through a focus on building long-term relationships, sustainable innovation, financial stability and a global footprint, our goal is to be the long-term, reliable facilities leadership, operations, and maintenance services strategic partner. In addition to the immediate opportunity, we believe we can provide additional value-added services in the future. Our delivery of a unique approach will leverage our Facilities Management model, providing a single point of contact and linking all touch points between GAS and your organization.
We will ensure sustained, predictable facilities management, while providing best-in-class operational integrity. 5. Recommended Strategy One of the greatest challenges faced by owners of complex facilities is actually getting those facilities to operate as intended. The complexity of the numerous systems installed in these facilities is compounded by multiple design influences, numerous contractors, value engineering, and other variables - all working at odds tit the owner's needs and intent. GAS will leverage its current efforts in MESS optimization and HAVE maintenance by conducting a thorough and complete commissioning.
GAS not only manages higher levels of system efficiencies during the initial commissioning but, also, during ongoing commissioning of your facility as a part of normal operations. This continuous commissioning philosophy recognizes that an intended change in one system variable often gives rise to unintended consequences in other systems. Using Facility Performance Indexing will enhance the sight of the on-site staff that ill operate and maintain assets with the insight that comes through effective deployment of great technologies.
Site plus insight produces foresight, reducing down time and improving desired outcomes. Creating a philosophy that believes that the infrastructure of a building is an ever changing, complex environment and, thus, through the use of sophisticated financial and building utilization tracking tools, GAS can optimize the exposure of the customer which in turn delivers a financial solution that differentiates GAS from the competition. To insure the continual success of GAS, a strategic plan has been created to enhance the facility management offering in the healthcare arena.
In creating this plan, it is crucial to incorporate the aspects from inception through implementation tactics, action items, milestones, deadlines, tasks with their respective owner and, finally, resource allocation. In addition, key performance indicators will be created and monitored so that the results are transparent to your organization. Change management will be a critical element in the overall success of this plan, therefore, areas where that will be utilized will be addressed, facilitating the success of the overall plan. Environmental Impact 6.
Understanding the remote environment factors that affect a business is essential to evaluating and, thus, creating a successful business model. As a facility management organization, GAS must focus on the evolution of outsourcing in the facility arena which is directly tied to the economy. With the ever increasing responsibility required to operate a safe and environmentally pleasant atmosphere for our customers to work in, it is critical that GAS maintain its cutting edge approach of reducing expenses while increasing client comfort and safety.
In March 2009, HOC anted a reduction of $105 million and said that it would eliminate 400 Jobs because of Medicaid cuts, rising expenses and a growing number of uninsured patients. Alan Avails, HOC President wanted to ensure that patients who are adversely affected can be linked to alternative care. That, of course, will become more and more difficult since we have to dig deeper and deeper, lowering our financial stability. 3 Because of the economic environment facing local, federal and the private sector, organizations need to reduce operating expenses while maintaining their level of core services.
This has been the impetus for the increase in outsourcing of facilities management. Short-term objectives, functional tactics, actions items, milestones and deadlines, as well as tasks with ownership, allocating the appropriate resources, are instrumental in a functional implementation plan. The short term objectives for GAS include: 1. Implementation of strategic occupancy planning strategy 2. Have adequate office Space 3. Playbook is in Place 4. Focus Group and Operational Leaders agree on Model 5. Resource service model in place 6.
Business support services model in place 7. Sales Team and non-technical services team in place The requirements for functional tactics that will support the short-term goals include: 1. Marketing: Development of a customer focus group to leverage relationships 2. Accounting: Prepare a financial statement that incorporates forecasting and budgeting 3. IT Infrastructure: Create a portal for a customers and our people to leverage best practices as well as to leverage the buying power of the entire organization 4.
Operations: Research the outsourcing practices of clients and potential clients in the future so as to maintain the competitive pricing structure and, thus, differentiate GAS from the competition. 4 items include: 1. Having the required research to venture into the market place with these new offerings. 2. Educate team members on the specific accounting needs of both the customer and the organization. 3. Conduct a market basket solution which includes service level requirements, regulatory compliance, response time and pricing 4. Perform a SOOT Analysis; 5.
Validate the marketing strategy 6. Fine tune the internal and external portal 7. Reinforce and create replicate able policies and procedures for each market 8. Define a stretch sales target 9. Establish a budget for other direct expenses such as office supplies, products, ND equipment needed at the numerous sites once go live is established 10. Review the current contract language so that the new offering is addressed in the terms and conditions To facilitate the ability to measure outcomes the following milestones and deadlines are established: (See Appendix A for Giant Chart) 1.
Build staffing plan to support the market analysis (20 Days) 2. Vet the marketing strategy with focus group (10 Days) 3. Acquire the need infrastructure (IT) and test at the all sites (30 Days) 4. Finalize financial training requirements with the accounting team (7 days) 5. Obtain organizational buy-in of the sales plan (20 Days) 6. Test and implement the portal (40 Days) 7. Launch offering to the market place (180 Days) GAS is a growth engine for Johnson Controls and, as such, will leverage the resources, talents and expertise of the parent company, since the implementation plan is rolled out to the organization.
This will entail the utilization of the existing corporate infrastructure from finance through final delivery to the customer. The basic services will be self-performed by the GAS personal, however, the technical delivery of the services may be outsourced, as required. The following required tasks will have numerous owners throughout the process, forever, the team leader at each endeavor will be ultimately responsible for the successful outcome of the task. These tasks with team leaders are as follows: 1.
Conduct Market Research - Start research and consult outside marketing experts Obtain supplies and equipment needed - Regional Management 3. Complete sales goals - Team Leader and Corporate UP of Sales 4. Finalize marketing analysis 2. A. Demographics- GAS Market Team with third party consultant b. Market conditions - GAS Marketing team c. Competitive analysis - Third Party consultant 5. Identify weaknesses and opportunities in new market plan - Regional Management Team 6. Prepare a marketing strategy - GAS Regional Sales Vice President 7.
Prepare a plan on how to implement the marketing strategy Local Prepare a forecast and budget - Regional Finance Team 10. Implement standard operating and procedures - Critical Environment Leader 11. Modify the contract to be used with new offering - Internal and External Counsel 12. Quantify potential offering with clientele - Market and Sales Team 13. Procure and implement equipment for office - Office Manager In conjunction with having an implementation plan in force, it is also imperative to extinguish organizational change management needs for a successful implementation.
For this to be successful, understanding what can be changed is critical. GAS, being part of a fortune one hundred company, can leverage internal resources for change management with oversight by the local team. Therefore, the items to be outsourced would be limited to both market strategy and legal review. Through the outsourcing of non-core business, the GAS team can optimize the time it will require to get the product to the new market place. As an example, the modification and development of the new portal could be addressed by website designer.
In addition, through careful scrutiny of the existing facility management contract by outside counsel, the new modification will require less time and receive the benefit of the legal team of the third party provider. GAS is an existing company with an existing client base. It is critical that these new changes do not adversely affect their base business. Through the proper utilization of the focus group, GAS testing of their offer can be accomplished in a short time frame.
The oversight of the change management team is critical in this endeavor as it is equally important to maintain as well as grow. You cannot fill a bucket that is full of holes. In addition, as the GAS business model is people driven, the on-boarding of new personnel to handle this growth will require input from the human resource department. These actions can be overseen by the change management leader. 9. Key Success Factors Determining the success of this endeavor will require GAS to evaluate numerous business factors; primarily, the affected market place.
Through the utilization of the current supply chain as well as the focus group, it is important to factor the number of new clients from this strategy. Understanding the key factors why clients outsource facility management is key to the effectiveness of the strategy, as well as if there are changes required. Concurrently, through working with the focus group, GAS will have firsthand feedback to determine the viability of the offering to the market place. This is the foundation of growth for GAS. The model is built on the underlying principle that clients are clients for life. See table below client longevity) There is a need for the business director staff to perform a quality assessment of the service offering, post sales, to determine the level of client satisfaction. This will allow the organization to cake minor changes to the offering customize the deliverable to each client. Organization to retain customers. This is accomplished through continually demonstrating value during every customer encounter. 4 Based on our Partnership Implementation Agreement GAS will assume full responsibility for the operation and maintenance of health care facilities.
We will deliver a comprehensive partnership approach that offers the convenience and efficiency of outsourcing all plant operations management services to one provider, which will enable health care organizations to focus on their core business value: patients' well-being. We will use a system wide approach that allows for leveraging our facilities knowledge from on-site with support from GAS truck based business, thus, enabling the local management team the ability to access knowledge in energy, HAVE, CACAO, DOD, EPA, to name a few, without the need for outside consultants.
In addition, GAS is committed to investing in the local communities where we live and work. Beginning with education seminars, Blue Sky Involve, which is an employee outreach program that promotes and protects health in every aspect from physical to social interaction as an integral component of our partnership approach as well as irking with various local and MEMBER organizations, we invest in our relationships. The following is a cash flow analysis in conjunction with cash budgeting and forecasting.
Table of Estimated Costs Table of Estimated Revenues The chart with cash flow overview includes revenue, overhead, gross margin, earnings before interest and taxes (BIT) as well as a return on the investment. This investment is forecasted to be six hundred twenty-three thousand dollars. The chart forecasts a return on investment (ROI) of over one hundred and forty-nine percent and a compounded annual growth rate (CARR) in excess of one hundred and thirty- nine percent.
The breakable point for this project is within the first year of operation, therefore, there is no requirement to amortize the debt past year one. The break even analysis is calculated by using the following equation: Break-even point = Fixed Costs/(Unit Price-variable costs). Thus, based on the above information, the breakable point is accomplished in month six. Therefore, to breakable, GAS will need to implement new contracts in excess of six hundred and twenty three thousand dollars. Implementing a new business strategy creates numerous risks, therefore, a risk taxation plan must be implemented.
This will consist of assessing the risks to the management is defined as the policies, procedures, and practices involved in identification, analysis, assessment, control, and avoidance, minimization, or elimination of unacceptable risks. 5 New marketplaces inherently place major risk on the continual viability of the financial return. Implementation cost may change due to the procurement of new hardware, the hiring of talented associates, redesigning a portal and acquiring all the operating certificates needed to operate facilities in a efferent environment can adversely affect the results.
Therefore, by having a plan with strong change management, the organization can limit its respective liability to forecast and, thus, maintain the financial independence from the parent company. 12. Conclusion Demonstrated above is a growth strategy once in place, with key success factors identified, a budget, forecast and break-even analysis created with a risk management enforced the organization can undertake this new venture with a high degree of confidence. Having clearly defined short term objectives, functional tactics, action items, milestones and deadlines put in place, the arduous task of owning the deliverable is now manageable.
We look forward to the opportunity to demonstrate our innovative solutions and world-class management service delivery to the health care arena. A facilities partnership with GAS will enable the hospitals to, not only enjoy a world class healthcare facilities operation, but also realize the benefits of state of the art technology that will deliver the sustainable results needed to provide quality patient care. In addition, implementing a strong facilities strategy will drive energy reduction Laos as we have been awarded ISO 14001 for our environmental standards.
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