Are EMSTF Services Value-for-Money?
Established in 1996, EMSTF aims to provide cost-effective and high quality, comprehensive E&M services to its customers. Responding to customers’ needs and to improve customer service, EMSTF has identified long-term improvement measures, and formulated a five-year plan to achieve the corporate goal of “creating public value for community betterment through partnership with our clients”. Furthermore, EMSTF will keep operating at slim profit to enable client departments to retain more funds to better their services for the community. EMSTF believes that a dollar it saves for the client is a dollar more the client can spend on serving the community.
Customers are Satisfied
The question is, are EMSTF services value-for-money in customers’ eyes?
In 2014, EMSTF conducted a customer opinion survey, and the results clearly indicate that customers highly recognise and appreciate EMSTF’s slim-profit operation in delivering high quality, comprehensive services and they will continue choosing its services.
Conducted between May and July 2014 by an independent research consultant, the biennial Customer Opinion Survey (COS) received around 1,000 completed questionnaires, and also interviewed in-depth about 130 customers, at different rankings. The survey provided customers’ feedback for continuous improvement of EMSTF service quality and business processes.
75% Customers Prefer EMSTF
Asked whether EMSTF was considered their most preferred E&M service provider, 75% respondents indicated that they “always”, “very often” or “often” preferred EMSTF, which was 18% higher than that recorded in COS 2012.
Highly Competitive Service
Furthermore, the majority of respondents expressed that they were most satisfied with EMSTF’s “integrity”, “courtesy”, “support under emergency & crisis”, “technical competency” and “familiarity with the operations and facilities of government departments/public bodies”.
Customers also recognised EMSTF’s strengths in service competitiveness. In COS 2014, it attained a record high Service Competitiveness Index of 6.19, an increase of 5.5% compared to that of 2012.
Customers Emphasise Quality, Not Price
Customer satisfaction is a strong indication of EMSTF’s service quality and reliability. In fact, 72% respondents acknowledged that “reliability” was the key factor driving them to continue choosing EMSTF’s engineering services. It was followed by “technical competency” and “service quality”. “Price” is the least important factor among all.
Record High Overall Customer Satisfaction
Overall, EMSTF achieved a record high overall Customer Satisfaction Index of 6.22 on an 8-point scale. This is another strong indication of customers’ recognition of EMSTF’s performance.
Deloitte Study Affirms EMSTF’s Competitiveness
EMSTF appointed Deloitte Consulting (Hong Kong) Limited (Deloitte), one of the leading consulting firms in the world, to conduct an independent study to review its pricing at the end of last year.
Pricing is Consistent with Market Transaction Price
Deloitte points out in its “Review of the Current Pricing Mechanism of EMSTF” that EMSTF has been using a “cost-plus” pricing strategy “to ensure that the price of its E&M services is reasonable and consistent over time (i.e., provides good value for customers)”.
High Quality, Comprehensive Services
Deloitte states, “Use of this approach to pricing should mean that, in principle, its prices should be in broad alignment with, and comparable to, market transaction prices.”
Deloitte also points out, “Price information for E&M services market appears to be partial and relatively opaque. This appears to be because price information for bids is commercial in confidence, market transaction volumes are low (i.e., limited price points), and market transaction prices vary depending on requirements (i.e., no overall market transaction price).”
Despite the lack of market price information, EMSTF has devised its own mechanism to collect such information, such as contractor bid response analysis and an electronic Contract Administration System, which “provides useful and useable data about E&M services market transaction prices” according to the report.
EMSTF also takes part in open tenders and conducts post-tender analysis to collect information on market transaction prices and to ensure price competitiveness.
The Deloitte report continues, “E&M services contractors, including the EMSTF, position themselves consistently. In general they tend to emphasise quality and customer-centric service characteristics, rather than price.”
With regard to E&M services market, the Deloitte study says, “The E&M market is not one homogenous market, but at least 25 distinct sub-markets...Compared with the 421 registered contractors on the EMSTF Approved Contractors List, the EMSTF operates across all 25 sub-markets, whereas 303 (72%) contractors operate in only one sub-market.”
Low Return on Revenue (RoR) to Enable Clients to Retain More Funds
Unlike other contractors, “EMSTF provides a wide portfolio of both general and specialised E&M services. In this respect, the EMSTF differentiates itself from other contractors through its ability to provide a comprehensive, ‘one stop’ E&M services solution. Other contractors are not able to offer the same level of coverage of service provision.”
Indeed, EMSTF at all times takes the extra step to get involved in customers’ projects, sometimes even before the projects start. These professional services are unique and probably not provided by other service providers in the market. They include feasibility studies, assistance in fund bidding, provision of on-site staff, crisis management and emergency back-up service after project completion and much more, which are highly recognised and valued by customers.
In fiscal 2012-13, EMSTF operated at 6.9% RoR. The Deloitte study points out that EMSTF’s RoR is not higher than the “median” level in comparison to other key contractors’ on the market. With regard to EMSTF’s RoR performance, “the overall trend reveals a steady decline.” In fact, in fiscal 2013-14, EMSTF operated only at 5.3% RoR, an abatement of 1.6% compared to that of 2012-13. The RoR has become significantly lower, which is in line with EMSTF’s aim to operate with slim profit so as to enable clients to retain more funds and better their services for the community.
High Tender Success Rate
As EMSTF operates in an open and competitive market, both quality and price are key determinants for project awards. For example, EMSTF recently won several maintenance contracts from the Hospital Authority and the Airport Authority, and the Ko Shan Theatre contract from the Leisure and Cultural Services Department, all via open tenders.
The Deloitte study states, “The EMSTF’s overall level of success in winning tender bids is 48%, which is high.” The report goes on to say, “It provides an indication of the EMSTF’s competitiveness in the E&M services market.”
Quality Services at Slim Profit are Value-for-Money
The 2014 COS and the Deloitte study have both confirmed EMSTF’s performance and its competitiveness in quality services and pricing. Customers also recognise and support EMSTF’s slim-profit operation in delivering high quality, comprehensive services, as EMSTF’s services are value-for-money!
EMSTF values its relationship with customers and their feedback, which is vital for the continuous improvements of service quality and business processes.
EMSTF has further fine-tuned its five-year Strategic Plan and will make continuous improvements according to customer feedback in COS 2014. These include (i) keeping customer informed; (ii) applying advanced new technologies to E&M systems; and (iii) enhancing contract management.
EMSTF’s professional team will also work proactively to explore and introduce new technologies, certification programmes and innovative E&M installations to customers. Examples are the identification of energy saving technologies, the use of computerised e-platforms and mobile technology in providing timely work progress information and customer service, and the introduction of ISO 55001 ”Asset Management Certification” to enhance clients’ asset management from lifecycle strategies to everyday maintenance.
Most importantly, EMSTF will continue to operate with slim profit so as to enable client departments to retain more funds to better their services for the community.
EMSTF is honoured to be a close partner of its customers, and will continue to provide them with value-for-money engineering services.