Reinventing facilities management

for the digital world

White Paper | 2016
“Digital” is no longer merely a descriptor for technology companies, managers can advise on creating the kind of spaces and facilities that
new marketing trends, or an outlying division within an organization. can help companies attract and retain top talent, enable new operating
According to a 2015 global study conducted by MIT Sloan Management models and advance the business model.
Review and Deloitte, almost 90% of respondents anticipate their
Some forward-looking FM leaders have grasped the enormity of the
industries will be disrupted by digital trends to a great or moderate
opportunity—and the challenges. The shift to “digital FM” involves
extent.1 The results are hardly surprising since digital disruptions
automating FM business processes—everything from move-ins, service
have transformed nearly every facet of our lives. From personal to
requests and maintenance, to energy management or workspace
professional, it is hard to imagine our lives without the devices and
customization. It also enables facilities managers to collect data on
technology we rely on each day.
activities and systems performance that can be analyzed to inform
Digital technologies have radically altered how, when, and where better decision making, capital planning and improving the workplace
people work, redefining the workplace—and changing how real estate experience for employees and customers alike.
and facilities are used. With ubiquitous internet connectivity and cloud
The challenges are primarily about developing the strategy and
services, employees can work from almost anywhere—from their home
capabilities that are needed to adopt digital processes and support
offices, from a company office in another city, from a client site, from
digital workspaces—capabilities that not many FM teams currently
a co-working space, a common area space within a building or even
possess. For example, some facilities managers do not have the
from the corner Starbucks. At the same time, digital technologies also
experience on their team or the knowledge of data analytics that will
enable “friction-free” processes and business models. Intermediaries are
be needed to turn a flood of information into insights that can guide
eliminated and companies can adopt “asset-light” operating models—
decision making about alignment of FM priorities with strategic priorities,
using digital platforms to engage on-demand resources, including
optimized maintenance planning and asset management, improved
workers. Digitized processes also give companies the information to
facility services, and enhanced human experience. As an industry, FM is
make data-driven decisions about how to both manage and use space.
not alone in feeling unprepared to succeed in a radically
As digital systems become more powerful and more deeply embedded
changing digital world; only 31% of respondents in the MIT Sloan
in the processes and workings of organizations, the way companies
Management Review and Deloitte conducted survey said their
manage and use offices, manufacturing sites, warehouses, distribution
organizations are adequately prepared for the digital disruptions
and retail space will continue to evolve.
their industries are going to face.2 Leading FM teams have a distinct
As leading organizations undergo their own digital transformations, opportunity to stand out through their honed technical, analytical and
facilities management (FM) must also move into the digital age. This strategic-thinking skills and their ability to communicate the benefits of a
involves both the adoption of digital technologies to perform and well-managed digital work environment.
enhance FM functions and finding ways to provide additional services
for occupants and tenants, including accommodating the needs of a Some forward-looking FM leaders
diverse digital workforce, which may or may not be on the premises. have grasped the enormity of the
The digital workplace creates an opportunity for FM to take on a more
strategic role; embracing new technology to improve services, facilities
opportunity—and the challenges.

1,2
Kane, G.C., Palmer, D., Phillips, A.N., Kiron, D., & Buckley, “Aligning the
Organization for Its Digital Future,” MIT Sloan Management Review (Summer 2016)
Deloitte University Press.

COPYRIGHT © JONES LANG LASALLE IP, INC. 2016. All Rights Reserved 2
The “ friction-free economy” will continue to grow, both because of employer demand and lifestyle
preferences of some workers. Today, an estimated 29 percent of the US

changes how commercial workforce is contingent and, according to some estimates, that share
could exceed 40 by 2020.3
property is used In the friction-free economy, the organization itself is becoming more
fluid. The corporation is atomizing, looking a lot less like the old
Hollywood studios with lots of fixed assets and permanent rosters of
Advances in computing, software, and communications have changed stars, and more like an independent production company that assembles
how companies operate, and advances in business models such as the the best talent it can find for a project and then disbands when the film is
virtual workforce and virtual workplace are reinventing business models released.
and how businesses interact with customers and their employees.
The liquid workforce, however, vastly complicates how real estate is
With online platforms to match buyers and sellers and ready access to
used—and compels companies to rethink how they plan for space
information about products and pricing, consumer and B2B transactions
needs and invest in property. Permanent employees, who may work in
have become relatively friction-free. There are fewer middle men and
the office always, sometimes, or almost never, must be accommodated.
market makers and more direct interactions between suppliers of goods
They need space and access to meeting rooms and other facilities, but
and services and their customers (see sidebar, What is the friction-free
not every day or even every week. On-demand workers may need space
economy?). Within companies, advances in computing power and
in the company’s headquarters or in a remote office. They may need
software make it possible to automate all sorts of processes, including
desk space occasionally or they may need to co-locate with a particular
customer-facing functions such as answering customer service inquiries
group of full-time employees for several months. Or they may work out
or routing work orders.
of their own offices or need help finding a co-working space. Facilities
Some of the most profound effects of digitization are seen in how management can help manage this fluctuating demand, optimize space
companies organize themselves and use labor. Labor markets have usage, advise on services that are best suited for the company culture
become more transparent and flexible because of online platforms that and workforce, and help companies with their human capital strategies.
improve matching and enable both employers and workers to participate
in new ways. Companies are finding that they can boost productivity, Today, an estimated 29 percent of the
unleash innovation, and jump on opportunities faster by using an
increasingly “liquid,” on-demand workforce. This workforce is made
US workforce is contingent and,
up of full-time employees as well as contractors who continually move according to some estimates, that
on and off the payroll. The ranks of contract and freelance workers
share could exceed 40 by 2020.

3
Intuit 202 Report: Twenty trends that will shape the next decade, Intuit, 2010.
COPYRIGHT © JONES LANG LASALLE IP, INC. 2016. All Rights Reserved 3
 What is the friction-free economy?
In 1996, when Bill Gates coined the term “friction-free capitalism” a new toy can hire designers online, engage accountants and
in his book, The Road Ahead, the idea was still futuristic. Today lawyers on an as-needed basis, and even order up prototypes
it has permeated every corner of the economy. What Gates from a factory in China—all from a cubicle in a co-working space.
observed is the transformative power of ubiquitous connectivity Large corporations are also taking advantage of these friction-free
to the internet and expanding access to data. The first result was possibilities, shifting IT operations from capex to opex with cloud
a wave of companies, such as Amazon, that “disintermediated” services, for example, and virtualizing whole functions, such as
traditional consumer and B2B markets. With Amazon, you no marketing and human resources.
longer needed a bookstore to buy a book. With e-Trade you no
Another aspect of friction-free capitalism is the sharing
longer needed a stock broker. These businesses took away the
economy—a new business model that uses online platforms—
middlemen and gave customers direct access to the goods and
AirBnB, for example--to connect owners of underutilized assets
services they needed. As online commerce exploded, consumers
(a spare bedroom) with users (travelers). AirBnB has been
and businesses learned that they could find information
disruptive to the lodging industry and companies are trying to
about pricing, features, and quality so they could make better
extend the model to commercial real estate, too. Mall operators
purchasing decisions. Suppliers built new direct-to-customer
are offering vacant space online for pop-up stores, there are
models. The speed of commerce accelerated and the cost
warehouse-sharing services, and even services that allow
declined, because there was less friction.
office tenants to rent out conference rooms by the hour
Fast forward 20 years and digitization and new ways of gathering or empty desks by the month.
and using information have taken friction-free business to a
new level. Entirely new business models and operating models
have emerged. Asset-light companies are charging ahead and
challenging incumbents because they can tap any asset or
capability they need on the internet. A startup trying to market

COPYRIGHT © JONES LANG LASALLE IP, INC. 2016. All Rights Reserved 4
Four dimensions of digital They are replacing paper processes and introducing entirely new
ones—such as using sensors to detect burned-out light bulbs—

facilities management that eliminate the need for human intervention in reporting. Data
gathered via these computerized processes can provide greater
transparency into employee preferences, facility usage and drivers
The digitization of the facilities management function is playing out of cost so facilities can be managed more efficiently and clients
across four dimensions: digitally-enabled FM services; employee can make better-informed decisions about capital planning, asset
productivity and retention; energy and sustainability management; management and facility services.
and compliance. In all of these areas, leading companies are using One set of digital innovations for the FM function involves
computers, sensors, networks and data to streamline existing FM automating workflows. For example, if a plumbing repair is needed,
functions and extend the bounds of FM into higher value-added the office manager can log onto an online platform to report the
activities. Armed with data, FM teams are no longer simply processing incident. From there, the process is automatic. A call goes out to an
orders for desk moves or responding to complaints about burned-out approved vendor to make the repair, eliminating paper orders and
lights. They are using data and analytics to predict space demand, manual steps, such as locating an approved plumbing contractor
save energy, and keep equipment running (See sidebar: Digitizing with immediate availability. The automated process also captures
maintenance for better results). They are scheduling space for data that was never tracked in paper-based systems. Using GPS
workers in the office and helping locate co-working spaces data, the system can tell when the technician arrived and left the
and other facilities as needed. They work as partners to create site, for example. The system can also determine if the invoice
an environment that encourages collaboration and creativity, and price conforms to the contract price and, using benchmarking data,
engenders employee engagement. can show whether the cost of the repair is out of line with area
averages. With digitized services, there is transparency throughout
the process – allowing everyone to see what stage the request is in
and when it is completed.
Workplace productivity
and retention End-to-end digital Finally, facilities management can use building usage and
FM services
performance data—how many employees are on premise and
when, how much energy is consumed, how often paper towels
run out in washrooms—to optimize operations and advise users
on workplace and CRE strategy. Companies may even be able to
use the data captured by digital FM services to create a revenue
stream by offering un-needed space for short-term use the way
an apartment owner might offer a spare room on Airbnb. Several
online services match companies with capacity—a day of meeting
room time, for example—with users.

Energy and
Compliance 2. Workplace productivity and retention. Keeping workers
sustainability connected, engaged, and productive is an important priority for
companies that are waging a war for talent. Some four million
baby boomers are reaching retirement age every year and
companies need to make sure that they can attract and retain the
millennials who will take their places. Working with FM to provide
1. End-to-end digital FM services. When functions and processes the right workplace experience can give companies an important
are digitized, companies find that almost any activity can be strategic advantage. With digital FM, facilities managers can
managed and optimized through benchmarking based on advise tenants on the right facility services for an organization’s
performance data. This applies to facilities management, too. culture, by using benchmarking data from similar organizations.
Virtually all FM functions can either be moved onto digital systems
or managed more efficiently using digital technologies, enabling
FM employees to do their jobs better. Companies are using Working with FM to provide the
“end-to-end” automated processes to manage maintenance and right workplace experience
repair, improve energy management, and provide employee-
focused services such as concierge and other hospitality services.
can give companies an
important strategic advantage.

COPYRIGHT © JONES LANG LASALLE IP, INC. 2016. All Rights Reserved 5
 From reserving conference rooms to adjusting lighting and
Digitizing maintenance for better results temperature preferences, digital FM provides employees with
new levels of space personalization and efficiency—often from
With traditional maintenance, it is difficult to know if you’re making the convenience of a mobile app. The data derived from these
nonessential repairs or racking up nonessential expenses. preferences can then be used to continue to enhance and optimize
Without meaning to, your maintenance program could be falling the space—increasing employee productivity through fewer facility
short – opening you up to risks with asset failures, unexpected “distractions” and improving overall happiness.
costs and an ineffective plan that isn’t aligned to your business Working collaboratively with the IT and HR departments, FM can
objectives. In the age of digitization, maintenance programs are help the company create a seamless electronic work environment
evolving. Technology and data enable an entirely new approach that provides the same experience whether workers are sitting at a
to maintenance that can reduce maintenance costs while avoiding desk in the headquarters or working from a home office hundreds
costly failures and extending the useful life of critical equipment. of miles away. With cloud-based applications, desktop video and
Digital technologies make it possible to move beyond costly video conferencing facilities in the office, workers have access to all
maintenance routines, under which machines are serviced at the tools they need to do their jobs in or out of the office. They can
regular intervals without taking into account usage or criticality of collaborate, attend meetings, participate, contribute, and engage
the asset. By monitoring performance in real time in combination wherever they are. FM is playing an important role in making this
with understanding the criticality of the asset, facilities managers vision of the virtual workplace a reality.
can use data analytics to create improved maintenance plans that With the increasingly specific data gathered, the FM team can
are predictive and reliability-based. This approach leads to the provide valuable business intelligence to support the company’s
second benefit: avoiding equipment breakdowns that can disrupt CRE function. For example, using predictive analytics tools,
business. By maintaining equipment based on actual need, facilities management can predict the ebb and flow of space
owners can reduce asset ownership costs by getting more years requirements and work with other members of the CRE team to
of use out of costly equipment. optimize space usage. A rule of thumb among facilities managers
is that 50 to 60 percent of office space is unoccupied at any time
because employees are traveling, working remotely, or out on

COPYRIGHT © JONES LANG LASALLE IP, INC. 2016. All Rights Reserved 6
 vacation. Using actual hour-by-hour data gathered by sensors and labor-intensive and costly process. It has also been prone to human
other means, FM can help CRE leaders see exactly how space— errors and gaps. Moving compliance online has made an enormous
offices, cubicles, meeting rooms, public areas—is utilized and make difference, not only making compliance more accurate and efficient,
more precise predictions of need. This makes it possible to ensure but also creating greater transparency for management. Systems
that no worker is ever denied a work station, while also reducing can automatically track when required inspections are due and
the amount of un-needed space in a facility. The same data-driven capture data about the results. In the past, a facilities manager
approach can help CRE leaders with long-term occupancy planning would manually close a work order once an inspection was
and space utilization decisions. complete. Now, accurate verification can be confirmed with a few
taps on a mobile device or clicks on a computer.
3. Energy and sustainability. Digital FM can also improve energy
efficiency and contribute to overall company sustainability goals. With online systems to engage and manage vendors, facilities
Smart building technology has been reducing energy use for a managers can make sure that they are complying with the
decade or more, by using electronic controls to manage heating, company’s financial rules—staying within budgets, for example—
cooling and lighting. Now, with connected systems, using “machine as well as complying with local codes. For example, when a vendor
to machine” (M2M) communications and sensors, facilities submits an invoice (electronically, of course) the system can verify
managers can take energy efficiency to another level. Sensor- that the charges are within limits that the contract permits and block
based control systems have advanced beyond simply powering on payment for variances until the issue is resolved. Digital systems
lights using motion detectors. More advanced energy-management can also let managers oversee vendor relationships across multiple
systems can observe complex usage patterns and tailor energy properties simultaneously to make sure budgets are not being
usage precisely for particular occupants. There are also on-demand broken. Real-time data allows the FM team to track expected costs
temperature and lighting apps that office workers can download to versus actual invoices, and to track expenses against budgeted or
their mobile devices. This enables temperature and lighting control projected expenses. With digital systems, FM teams can keep the
in an individual office or zone, rather than an entire floor. This documentation for each vendor online, including required licenses
contributes to energy savings, gives employees a sense of control and current contracts with the company.
over their environment, and can head off disputes over too much or
too little heating or cooling.
Remote monitoring and control functions have also improved:
multiple building systems can now be monitored from a central
command center, providing fault detection and diagnostics, and
issuing alerts when issues arise. System alerts can also be used
to automatically schedule in-house maintenance teams or engage
third-party services.
The flood of data that can be harvested from sensors can also help
companies improve maintenance routines. While building managers
have long been able to monitor performance of major systems, the
ability to analyze data from a remote command center gives FM
the ability to diagnose performance problems and correct issues
that might otherwise go undetected. For example, at one company,
sensors identified and corrected issues with unnecessary HVAC
equipment run-time, stuck dampers and incorrectly calibrated
sensors. These simple changes led to increased energy efficiency,
and the company was able to recoup installation of operation costs
of the smart building technology in less than 14 months.
4. Compliance. Digitization both simplifies and extends the
compliance function of facilities management. The FM team is
responsible for ensuring that what goes on in and around the
building complies with government regulations and that all work is
done in accordance with relevant fire, safety, and zoning codes.
In the world of paper-based processes, compliance has been a

COPYRIGHT © JONES LANG LASALLE IP, INC. 2016. All Rights Reserved 7
What stands in the way Next steps
of digital FM It falls to management, CRE and FM leaders working together to make
digital FM a reality. Executives can start by talking to their FM leaders
Despite the clear advantages and advances, only a relative handful of to understand the way the FM role is evolving in the digital age. There
organizations have adopted digital FM. There are many reasons for this, also needs to be conversations between top CRE leaders, FM and
including a lack of clear vision and definition around the changing FM executives about the costs, benefits and trade-offs of investing in digital
function. But there are also practical and technical hurdles. Companies FM. FM leaders will need to be knowledgeable about the company’s
need to work with third-party vendors to get the full range of digital FM strategy and be able to demonstrate how digital FM approaches can
capabilities. And today, electronic systems in the office environment are contribute to both the top and bottom lines.
fragmented, making it difficult to gather the data that would provide a
comprehensive picture of how space is being used. Many organizations Within an organization, the FM team will need to assess their current
—for good reason—are reluctant to invest too soon, for fear of betting on capabilities and identify what will be needed to build on those
the wrong horse in a technology race that is still being run. One example capabilities as FM goes digital. Digital FM is not a one-size-fits-all
is location tracking to help understand employee behavior and tailor approach. Each company’s requirements and resources dictate a
space to their needs and preferences. In some environments, such as unique mix of solutions.
factories, companies are trying active badges. Another possible solution is
To start (or complete) the transition to digital FM, organizations can:
sensors in light fixtures. Without a trusted partner advising on the options,
organizations are understandably hesitant to jump right into digital FM. • Ensure that their organizations have employees (or have access
to employees) who are technologically savvy and can think
There are also human factors that hold back digital FM, including both strategically and analytically
attitudes and capabilities. Organizations are just getting their heads
around the potential benefits of digital FM. Organizations need to be • Collaborate with FM, IT and HR to make sure they have the tools
shown that they have an opportunity to not only control CRE costs to deliver a consistent, high-quality experience for employees and
more effectively, but also to help win the war for talent and raise overall contractors wherever they work
organizational performance. In terms of capabilities, digital FM faces the • Invest in technologies and systems to evaluate, analyze, connect
same obstacles that confront businesses across industries: a shortage and track data that will drive intelligent business decisions
of talent that has both data analytics skills and the business knowledge
• Identify possible partners. For many companies, the transition to
to apply digital technology effectively. As a result, most businesses
digital FM will require partnering with a service provider that already
are still building the capacity to collect, analyze, and interpret streams
has the tools, technologies and talent.
of property operating data to drive intelligent business decisions and
enable new ways of working. For example, it is estimated that
only a third of CRE teams have started to use predictive The FM team will need to assess their current
analytics to inform decision-making.4 capabilities and identify what will be needed to
build on those capabilities as FM goes digital.

Conclusion
In the era of the frictionless economy, the shift to online processes and data-driven decision-making gives the facilities management function
the opportunity to significantly expand its role. Not only can digitization make FM teams far better at their traditional work but it can also help FM
contribute more broadly to the company’s success. Digital FM will allow FM teams to better anticipate and control maintenance costs and ensure
facilities are functioning properly. Digital FM will certainly make FM teams better at aligning facilities with strategic priorities, controlling CRE
costs and making sure facilities are accommodating all the workers and uses that the company requires. But it can also make FM a partner with
top leadership in building flexible organizations that can compete in markets that move at the speed of digital information. This journey will entail
a dramatic rethinking of the FM function—and a bit of stretching by FM leaders who will have to move beyond their comfort zones. The
rewards make the risks worthwhile.

4
Mind the data gap: Aspiration vs. reality in corporate real estate, Forrester Research, 2014.

COPYRIGHT © JONES LANG LASALLE IP, INC. 2016. All Rights Reserved 8
www.jll.com

About JLL
JLL (NYSE:JLL) is a professional services and investment management firm offering specialized
real estate services to clients seeking increased value by owning, occupying and investing in real
estate. With annual revenue of $4 billion, JLL operates in 75 countries worldwide. On behalf of its
clients, the firm provides management and real estate outsourcing services for a property portfolio
of 3 billion square feet and completed $99 billion in sales, acquisitions and finance transactions in
2013. Its investment management business, LaSalle Investment Management, has $47.6 billion
of real estate assets under management. For further information, visit www.jll.com.
COPYRIGHT © JONES LANG LASALLE IP, INC. 2016. All Rights Reserved