Social media and web 2.0 are helping the FM industry cut costs and increase compliance

Picture of Sydney at night

First published in Facility Perspectives, the official magazine of the Facility Management Association of Australia, Vol 5, Number 2, June – August 2011


Not only is there confusion around some of the IT buzzwords floating around, some people question if “IT fads” can deliver measurable business benefits for an industry.  This article clears up some of the confusion and shows how COINs (Communities of Interest) are delivering clear and measurable benefits to the FM industry.


There are an increasing number of OH&S prosecutions against facility managers, property owners and head contractors for the actions of subcontractors. Today, the exposure to significant costs and liabilities necessitate some form of active control over personnel who are allowed on site to work because they put the building, the owner, the tenants and any visitors at risk.

Across the industry, managing subcontractor compliance has been done badly, if at all, simply because it is such a time-consuming and therefore costly, dull task. There are thousands of different certificates, forms and processes that need to be collected for the good of the building, the personnel, the tenants and the owners. Trying to keep track of compliance documents for thousands of subcontractors and hundreds of facilities is a soul-destroying task.  As a result, leaders in the FM and Property industry are using Web 2.0 COINs to share the costs of managing compliance risk across facilities and subcontractors.

How big is the problem?

At an industry level, multiple Facility Managers are collecting exactly the same certificates from a common pool of subcontractors.  The duplication of effort is staggering.

Many to many network of suppliers

If 100 companies distribute 5 policies to 100 subcontractors and collect 10 certificates from each subcontractor, there are a total of 500 policy documents and 1,000 certificates.  When we add up all the copies being transmitted across the industry, we get 150,000 separate documents.  That means that 99% are unnecessary duplicates.  This many-to-many approach is costing the industry millions of dollars in wasted time chasing and storing duplicated certificates. There has to be a better way.

What is Web2.0 and social media?

The primary feature of social media or Web 2.0 is user generated content.  Web 1.0 consists of web pages with a one way flow of information.  Web 2.0 is about interaction, collaboration and exchange of user generated content.  Well known examples of Web 2.0 include YouTube, Facebook and Wikipedia. Users create the content, not the owners.  In the case of Wikipedia, users collaborate to create a trusted source of information.  Slightly more business-oriented examples include LinkedIn and Slideshare however these applications don’t deliver collaboration and measurable business benefits.

Some Web 2.0 applications do deliver measurable business benefits.  Interestingly they have all developed out of industry needs to manage the messy and costly interface between businesses.  Some examples are:

  • iCiX – for the exchange of compliance information
  • incite and Aconex – for project collaboration

What’s a COIN (Community of Interest)?

“Social media” and “social networking”’ implies low security and a non-professional approach, we need a different label that stands for security, trust and collaboration, that term is COIN, Community of Interest which implies common purpose, dialogue, professionalism and the exchange of critical business information between trading partners.

Who would be members of an FM COIN for compliance?

A COIN is a community of interest.  The various parties that would have an interest in compliance are

  • Asset/Property owner
  • Facility Management organisation
  • Subcontractors
  • Tenants
  • Auditors
  • and even the facilities themselves

Much the same way a subcontractor has multiple certificates with expiry dates, each facility has multiple certificates with expiry dates.

FM many to one to many network

So how does a COIN work?

Much like LinkedIn or Facebook, each member of the COIN has their own business-grade secure site on the COIN.  Each member uploads all their compliance certificates, policies and documents onto their secure site, adds key metadata such as expiry dates and chooses with whom to share those documents.  Being able to decide who sees what documents is important because one COIN could include every subcontractor and every facility manager and you don’t want your competitor to see your information. Finally, collaboration is critical for COINs so each member also includes their contact details.  The COIN must provide a communication path between members be it by e-mail, fax, SMS or even voice messaging.

What are the measurable benefits of COINs?

For the industry, the benefits are that

  • non-compliant organisations can no longer hide
  • administration and software development costs are shared across the community
  • information is stored once and accessed many times
  • often, the COIN owners and developers are working with the industry to define the future development

For suppliers, it reduces their costs and can increase their revenue. Documents are loaded once, reducing administration time and their organisations can be quickly and easily found by buyers looking for compliant suppliers.

For Facility Managers and Asset owners

  • Using COINs some of Australia’s largest Asset Owners and Facility Mangers can report average compliance of 95% across all facilities and all contractors. This significantly reduces liability and the risk of prosecution.
  • Compliance administration costs are cut by up to 80%. Time is no longer spent chasing contractors for out of date documents.
  • Missing documents at less than 2%.
  • Reports are produced in seconds with a high level of confidence. Compare this to a 2010 survey in which 56% of respondents reported that they had never run, or found it too difficult to run a report to check supplier compliance.  Even when the report was run, 42% of respondents reported having low or very low confidence in the accuracy of the data as most of the information is out of date.

To paraphrase one of these leading organisations, the COIN has saved us the task and drudgery of keeping track of subcontractors’ compliance, both to their statutory responsibilities and to our specifications.  It has eliminated the incessant tail-chasing exercise enabling us to concentrate on reducing our risk, which is of great benefit to the owners, our tenants and our directors.

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Nigel Dalton-Brown, GAICD, AMIIA, MBA

Managing Director, Chair, Speaker, Lecturer, Author

Nigel is the Founder of Strytex and has been presenting and writing on Goverence, Obligational Awarenss, Risk Management and Compliance administration (GORC) since 2010.

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