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British Institute of Facilities Management November 2007 Response to CIC consultation on Innovation in Construction Services Background A joint Industry/ Government study is looking at innovation in construction services, in particular the key interaction between construction clients and their key advisers. As a member of the Project Board, on behalf of the Strategic Forum for Construction, CIC is supporting the study. The project has an industry advisory Group, the Construction Services Innovation Advisory Group (SIAG), the aims of which are: o To deepen understanding of innovation in construction services, defined as the inputs of professional advisers and consultants o To assess whether there are actions which Government and Industry might take to encourage and facilitate innovation in construction services, or to reduce barriers, to stimulate the construction services sector to become even more successful. As part of its information gathering process, and in order to better identify areas where there may be a role for Government, CIC is asking key organisations questions in order to better understand the innovation process – focusing on the interaction between the client and their key advisers in the definition, design and delivery of building projects. Key questions and BIFM responses o What are the emerging innovations that are making a real difference in the construction service sector? What are the broader innovative practices the client /client adviser relationship can inspire? The increasing move by clients towards ‘whole life value’ asset management in the specification of client requirements (as evidenced through the PFI / PPP procurement model) has resulted in a renewed focus on value as against base cost budgeting. This in turn should have an impact on the development of products and services that offer improved returns on investment over the life of the asset by measuring the real cost of managing the facility over its lifetime. The importance of informed clients to the procurement process has a fundamental impact on the partnership between client and client (professional) advisers. An understanding of the value proposition attached to alternative innovative solutions should be the starting point for evaluating preferred solutions. This in turn should impact throughout the supply chain in the design and production of materials that contribute to overall improvements in life-cycle performance and value management. o What drives this innovation in the client or the client adviser relationship? The key drivers relate to value/return on investment; affordability; improved functionality in respect of building use and performance; environmental performance; energy/cost in use reductions and alignment of the chosen solution to the values and culture of the organisation. The client is focusing on the business needs and this takes into consideration Corporate Social Responsibility issues. o How is this innovation evidenced, and how could Government and industry better develop indicators or tools to benchmark the state and level of service innovation? Standard quantitative measures of performance (e.g. cost of construction; running costs; maintenance and energy costs) need to be compared with measures of qualitative performance (e.g. customer satisfaction; user productivity; return on capital invested; contribution to meeting environmental targets; resource management and impact on local communities). NB Innovation (or at least diffusion of innovation) is normally measured by rate of adoption linked back to various independent factors. Consequently, practical measures such as number of architects specifying innovative products could be useful in building up a picture. Techniques are being developed to calculate user efficiency against a common matrix including ‘value add’ and customer service. Government needs to work with the industry to determine standard models of measurement. o What are the barriers to further service innovation? Short-termism in the construction supply chain and design professions, when continued responsibility/ ownership ceases following completion of the construction project. Lack of authoritative evidence on the performance of alternative design solutions and the relative benefits of different approaches. Reluctance of business to share intellectual property where perceived commercial competitive advantage exists – need for a more open approach to innovation, whilst recognising and protecting the investment in innovation made by companies. Lack of investment in research into alternative technologies. Legislative obligations that may lead clients/advisers to favour overengineered solutions from a desire to ‘play safe’ (e.g. health & safety legislation, litigation culture). Failure to adopt / learn from innovations applied in other countries and adapt good practices to UK context. Not taking a service perspective, but rather paying only lip service - if followed through this would logically result in facilities management being further up the construction agenda. Failure to recognise the special factors in construction (see Q5) Pro-innovation bias that ignores anti-innovation and proper questioning of innovation 'failure'. Failure to look at the big picture - 95% ish of buildings are existing etc o Is there a role for Government in supporting these systems of innovation (such as adjusting policy or regulation) in order to gain further economic and social value? Government can encourage innovation through clear guidance on the role of the construction process in the development of its sustainable communities agenda and environmental strategies and how it intends to reward investment in cost efficient environmental solutions that can be proven to result in wider community benefits. Provide incentives for reducing waste throughout the construction and operation of a building by adopting a resource management approach, that acknowledges the advantages of reducing overall costs of running a building and minimising / reclaiming waste by-products. Fund a programme of knowledge exchange and dissemination between various sectors and throughout the supply chain, based on examples of successful approaches – a development of the existing KTP approach focused on the built environment. Reintroduce support for applied research aimed at supporting innovation in the construction, materials and supply industries. Knowledge Transfer Projects should be encouraged and made to drive practical tools that are supported by Government. Contact: Richard Byatt BIFM Communications & External Affairs Director 01732 522948 [email protected]