Trey: Welcome back to the continuation of our second series of Facilities Management Coffee Talks. Our listeners continue to request to hear from industry experts on very specific industry trends and best practices. Today, our focus is on accurately maintaining contracts in a facilities or computerized maintenance management platform. Our guest is Jim Peterson, one of the original founders of the Accruent Verisae CMMS software platform and an 18-year veteran in the facilities management space.
Trey: Jim, you're a returning speaker and clearly in high demand, so thanks for making time for the podcast today.
Jim: Absolutely, [Trey 00:00:38]. I enjoy it and look forward to trying to offer some tidbits that might help.
Trey: That'd be great, and I'm hoping you have a fresh cup of coffee for today's talk.
Jim: Absolutely. I'm never without one.
Trey: The great thing about a computerized maintenance management platform is this concept of repeatability. And our clients are saying, all right. I go out, I establish some contracts with my contractors. How do I maintain those in my facilities or my CMMS software platform? Can you talk about your approach to that?
Jim: Yeah, well. And honestly Trey, I've been doing this a long time, as you said. And I still do come across customers who, frankly, don't have contracts with their vendors. I was in a meeting just a couple of weeks ago where a national chain still isn't quite there yet. So I think that's really the first step, is understanding what is a contract, what needs to be in a contract and establishing those contracts with your vendors so that you can get to this step in automation.
Trey: Do you have some thoughts on how to prioritize those contracts? Because Jim, some of our listeners are grocers, some of them are mass retailers, some are convenience stores. They come from all across the board. How do they prioritize where they should get started with those contracts?
Jim: Yeah, good question. And I guess I haven't been asked that before. My first notion is cost. Cost and volume. If you've got a good idea of the vendors you're doing a lot of work with or the vendors you're spending a lot of money with, certainly that's where I would start. The value that you're going to get from having these contracts, it literally drives multiple percentage points out of your spend. And so that's why I would go there first, is setting up relationships, establishing those relationships, having the right people negotiate those contracts. And once you have those contracts in place, getting them into your CMMS system so that you can leverage that data.
Trey: Got it. Our listeners, they're all operators. And they'll be the first one to tell you, it's not all about price when they're talking about these contracts. Are there three or four components of a contract that you recommend as priorities as you're going through those negotiations?
Jim: Yeah, absolutely. Where I typically start is again, knowing the work that each of the vendors are doing, having that in your contract. Knowing the type of skills that are required to do the job. Many of the contracts that I've seen and that I think our customers have, you've got journeymen, you've got apprentice, you've got different skill sets and you have different rates that you're going to pay for those types of things. Probably best practice is to also have in your contract a list of, let's call it commonly used parts or consumables. So you can fix your costs on parts as well as part of that contract.
Jim: Certainly, you're going to have SLAs, service level agreements, baked in as well. The system that we have, you've got the ability to set up a couple of different services levels. One is to accept work as it's dispatched to you, a timeframe there. Another one is to show up on site. And then finally, to fix the problem. You're right, it's not just about cost, it's about those types of things.
Jim: And then something that's not necessarily a part of the CMMS, but I do see again good or best in class operators do it, is having a cadence with your vendors, right? A QVR of some sort, where you're looking at metrics that may or may not be tracked in the system, like same day fix, first time fix. How are you trending on making your SLAs? Where are you going? And really, I think maintaining contracts does require some discipline, but the payback we've heard time and time again is absolutely worth the investment.
Trey: That's huge. And that brings me to this concept of who owns it. Let's say we go through and we negotiate these contracts upfront. Who owns those ongoing quarterly follow-ups or those continued follow-ups that you were speaking to earlier?
Jim: The operator, 100%. And again, as we've been out in the field meeting with prospects, meeting with existing customers, this is an area that I think is needed and isn't always in place when we engage with folks. And what I mean by that is someone whose role it is to manage the vendor network, to ensure success, to ensure compliance. Our best in class customers that are really driving savings as well as guest satisfaction are those that have somebody who it's part of their full-time job, if not their full-time job, to ensure contracts are maintained, vendors are visited with. And that there's a program in place for continuous improvement.
Trey: That makes sense. What effect then does it have tied to reporting? Is it all internal, do you share that reporting with your service contractors? What do you think the best practice is there?
Jim: Great question, yeah. A few years ago, we introduced a concept. It's a simple dashboard tile interface. And prior to that, the retailers maintained the contracts, they had a view, they had the edit rights for that. And the contractor could see what the rates were, but that was about it.
Jim: Again, two or three years ago, what we introduced was the vendors have their own scorecard on their screen every day when they log in. And those metrics come certainly from some of the content in the contract, but also just from their performance in the system. And they see every day how they're doing based on the metrics that have been set up for them by the retailer.
Jim: And the funny thing happened, funny thing for me anyway, was we have vendors who now are actually calling the retailers saying, "Hey. I took a look at my scorecard this morning and I know that I'm trending down. I've got some new employees," or this or that. And they're actually proactively managing themselves to try to hit the KPIs that have been set up in the system and in the contracts.
Trey: That gets interesting because now you're leaning in on this concept of the facilities or the CMMS software package being a system of record that both the operator and the contractor are using? It sounds like you believe that the performance of that contractor should be shared with the contractor as well as the facilities team so that everybody's on the same page as far as where a contractor might be falling down.
Jim: 100%. It certainly wasn't my idea to put that functionality into the software, but everyone that I talked to from the contractors and the retailers side, there's no surprises, right? You show up and you're not throwing down a piece of paper in your QVR and letting somebody know how they're doing, you're getting together to talk about how to get better. Because you both know where you're at.
Trey: Can we talk for a minute on the types of contracts? I mean, it's interesting. Our operators obviously think about the service, the hourly rates. But do you see time and materials contracts being represented in these systems as well?
Jim: Yeah, absolutely. The types of contracts from the highest level, a time and materials contract where ... I'll just dive in, if that's all right. A time and materials contract has a few components. One is again, the skill level and the rate assigned to that. But a rate for different times of the day, typically. You've got a straight time, overtime, double time, holiday pay, that kind of thing. That's all stored in a time and material contract.
Jim: And then, not trying to get off topic, but in the system we've got something called [JO fencing 00:08:41], which then lets me know exactly when a technician is on site. And then we take that timeframe and we compare it to the contracts so we can automatically calculate the labor charge. If I've got a different rate from 8:00 in the morning until 6:00 at night and then a time and a half rate from 6:00 to 7:00, and a technician is there from 5:00 to 6:00 and 6:00 to 7:00, they're going to get paid with two different rates. That's all stored in that time and materials contract.
Jim: Certainly service level agreements, parts pricing that I talked about, so any parts that are used by the technician. All of those things automatically populate the invoice.
Jim: A couple of other types of contracts that I recommend and that we support, planned preventative maintenance contracts. These are contracts that have a schedule. These are contracts that need to be done. And typically, at least historically, what I've seen, there's just been a real challenge with both the contractual side as well as getting the work done and proving work was done, both ... Well, specifically for the retailer.
Jim: And the system has this ability to say, okay. For these activities, let's call it a spring start up. Where I'm going to go in and I'm going to inspect the air conditioning system and so on, here's the task that I want you to do. Here's a price schedule per site. I want you to do 37 sites and here's the price per site. All of that can be stored in a contract. You can attach a schedule to that, so the system will automatically create those. And then again, using that JO fencing, we can now prove that a technician showed up, did the work and can only bill for those services once there's proof of them being on site doing that work.
Jim: And then the final type of contract we call is a comprehensive contract. And I don't see much of these any more. Saw a lot of them years ago, and this is where I will pay a fixed sum of money to a [refridge 00:10:34] contractor, say, to do whatever is needed for 5,000 or 6,000 or $10,000 a month or every three months or whatever the case may be. And we've got a capability to set up those types of contracts as well. But again, not seeing as many of those these days. And frankly I'm glad, because I think that it's just not the right model.
Trey: Jim, I'm here taking notes. My listeners joke sometimes that I'm always taking notes. I'd like to go back to some of the things you said. You were talking about planned preventative maintenance. We have listeners that struggle with all of a sudden a solution provider not doing those quarterly, showing up twice in one week to get caught up. How do you make sure that those contracts are directly managed within this type of an automated software package?
Jim: Yeah. Great question. I've heard those stories as well. And in the system, let's say you've got a planned visit that's going to happen once a quarter, for example. You can actually set up service windows in a contract to only allow for those invoices to be created or invoiced or the work to be done in certain time windows. For example, if you want it done on March 15th, you might give them 15 days before and 15 days after the 15th, so there's a 30-day window. And if they don't do the work in that window, that invoice or the capability of the invoice for that work is taken from them.
Jim: Similarly, when those types of things happen, then your schedule can and should automatically update to take into account and bring forward the next window, if that makes sense.
Trey: It does. It sounds like you're literally negotiating these contracts and putting in a level of automated communication or notification out of the system to both the operator and the contractor. Is that right?
Jim: 100%. 100%. There's no-
Trey: How does that work, with the contractor? I mean, does the system email them? Does it message them?
Jim: Sorry, as far as the work orders or the contract itself?
Trey: The contract itself. And I'm specifically thinking about planned preventative maintenance. How does the system notify a contract that that's coming up so that they don't, like you say, miss some of these deadlines?
Jim: A few different ways. Yes, there are email and SMS-type notifications that come out of the system if need be. There's also a report that basically is a calendar, is a window, if you will, that the contractors have access to, to show them what work is going to be needed or do in the future. I've seen people use that for making sure that I have the proper amount of resources. Again, these contractors at times don't have the resources they need to take all of the reactive work as well as the plan. It's a forward-looking calendar that can help them.
Jim: But the work orders that are created out of the system are just like any other work order. All of the standard notifications, it shows up on their portal, shows up again via email or SMS. And then the contract itself and the work that's related to the contract is always available in the system for the contractors to see. It's just that they only have view rights, they don't have edit rights to those contracts. Anything that's put in the system for them, both from a content of a contract perspective as well as work orders related to that, is communicated out pretty well again via tiles, via a calendar and via notifications.
Trey: I know that some of our listeners face a kind of compliance schedules that they have to deal with, a compliance preventative maintenance work order. Is that different from a typical planned preventative maintenance work order?
Jim: Well, slightly, yeah. What I see in those cases is planned work is planned work. The compliance activities typically will have multiple, let's call it steps or documentation or requirements, around them to prove the work was done. For example, if an inspection is required and as a result of that inspection, I have two or three documents that need to be uploaded back into the system. When I'm setting up that contract and that, we call it a compliance PPM, you actually specify in there what is it besides the work activities that I need from the contractors in order for them to invoice that work for me? And so yeah, we do have those capabilities to again, require people to take photographs, to upload specific forms and so forth, and attach those to the planned preventative work order before it can be closed.
Trey: That's helpful. As I'm listening through what you're saying, there is a lot here. I mean, there's a lot of knowledge you bring and probably best practices that you bring from working with clients. One of the things I like to ask industry experts is, have you participated or does your organization offer assessments or workshops that our listeners could go through? To really, really get them ready for deploying this type of a system or incorporating these types of contracts?
Jim: 100%, we do. And you're right, it is a lot. And I would say that what I just talked through, I don't know a lot of retailers or users of the system that do it all. The payback is there and again, I guess for some reason been around for 18 years, there's one side of my that's frustrated that the customers don't take advantage of all the capability that's in the software. But the realist in me understands that it takes work and it takes effort to set those things up and to maintain them. The customers that do do it well tell us that it is absolutely worth it from a payback perspective. That's one thing.
Jim: As far as going through these activities and our best practices and our point of view, we developed a few years back a workshop that we do work through customers as they look at change, primarily. We have some customers or prospects we engage with that are fairly sophisticated and aware of these types of things. And we also have the opposite, right? Where people have either been doing things manually, or perhaps using systems that didn't allow the loading and uploading of contracts and going as deep as maybe our system does. We do do some workshops and some education sessions to really make it an interactive workshop so that they can understand what's possible and what we're capable of doing with them.
Trey: That's helpful. Well Jim, thank you very, very much for your time. Obviously, this was a very specific ask and we truly appreciate your knowledge of it. To our listeners, we are going to continue to drill down into some of these specific use cases and best practices. Also trying to bring you some options that we hear about as we're traveling around North America tied to assessments, tied to membership groups, anything we can do to help you as you start down this journey.
Trey: Thanks again for listening, and we look forward to the next Facilities Management Coffee Talk.
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