Value through innovation in long‐term service delivery

Abstract

Purpose -Public-private partnerships (PPPs) and other innovative procurement mechanisms are frequently used to deliver both an asset and a public service over a protracted period. The value streams to the parties involved can be complex, but generally arise from the satisfactory provision of infrastructure that is fit for purpose throughout its life. This research aims to investigate the effectiveness of the facility management (FM) function in delivering long-term value to both the client and consortium. Design/methodology/approach -This paper describes a case study of a PPP in Australia that delivered social infrastructure in multiple locations to a state government. Drawing upon multiple perspectives from within the consortium, it utilises inductive principles to identify the influences on value generation through innovation by the FM function. Findings -The ability of an Australian FM contractor to provide value within a PPP context has been shown to reflect some of the attributes described in literature. However, the extent of innovation, especially in the design and construction phases, has been limited by organisational history and capability, and relational and contextual issues. Originality/value -This research highlights a flaw in the rhetoric relating to PPP delivery, namely the disconnection between the asset delivery and service delivery phases, which stifles the consortium's capacity to innovate and maximise value. It reveals a set of influences that both resonate with the literature and plausibly explain the suboptimal performance of the FM function within an Australian PPP. By using highly iterative analysis leading to within-case generalisability, it provides a robust basis for wider investigation of the problem.

Business model renewal in context of integrated solutions delivery: a network perspective

“…For example Consoli (2006) identified differing views on control and power issues in the contractor -operator relationship hampering implementation of integrated solutions. Also, FM service provider's lack of knowledge on design issues and capacity may be a barrier to implementing integration successfully (Brewer et al 2013;Jensen 2009).…”

“…In Integra, additional activities are needed to ensure that the project delivery fulfills the set technical quality and service performance requirements while not exceeding the acceptable costs levels and utilizing premises for long-term value creation and subsequent appropriation. In practice, these activities include a multitude of informal relationship management activities and unofficial negotiations between the network parties and the client, in order to resolve issues through bargaining (Brewer et al 2013). It is notable that these activities are not conducted only by the Integra/ Developer acting as the system integrator (Brady et al 2005b;Winch 2001), but also by the Integra/ contractor and Integra/FM service provider.…”

“…For real estate and construction sector companies this has meant adopting new business models that are based on product and service deliveries in order to provide one integrated solution to the client (Bresnen, Marshall 2000a;Dainty et al 2001;Leiringer, Bröchner 2010). However, several challenges have been identified, that affect the adoption of new business models in the real estate and construction sector firms: inability to manage change in the working practices (Brady et al 2005a;Brewer et al 2013;Leiringer, Schweber 2010); slow transfer of new practices across projects (Dubois, Gadde 2002a;Nam, Tatum 1988); the varying competence of clients (Barlow 2000;Blayse, Manley 2004) and unoptimized incentive structures. Also the established internal routines and cultures of firms may affect the adoption of new business models, (Brady et al 2005a;Leiringer, Schweber 2010).…”

Evaluation of the Promotion of Through-Life Management in Public Private Partnerships for Infrastructure

“…Variation in the degree of involvement of participants working under sub-contract is a particular problem. Even where the different phases of private participation in the life-cycle have been brought under the governance of a single organisation, this does not guarantee the formation of attitudes and/or relationships that would lead to life-cycle integration [76,77]. A constant turnover of staff, and particularly regarding the project manager role [78], is an additional related hindering factor.…”

“…Sometimes the reasons for discontinuities are perverse in the PPP context. An Australian study [77] of a PPP, delivering social infrastructure in multiple locations, note the frequent exclusion of facilities management considerations from the design phase, in order to reduce the cost of hiring consultants.…”