1.1 Current business
Core business:
Sydney Opera House (SOH) locates at Sydney Harbour which is an iconic building in
Australia. It is a multi-venue performing arts centre with late architecture style and
providing large scale performances for local people and visitors to Australia to enjoy.
Business objectives:
Sydney Opera House is to be an outstanding showcase for Australian performing arts
and culture. To maintain and upgrade the Sydney Opera House as a performing arts
centre, cultural landmark and architectural masterpiece, and to become an international
leader in the presentation and development of artists and their work. As the number of
visitors continues to increase, we will contribute our expertise to the planning and
renovation of the concert hall to ensure that the Opera House becomes a world-class
venue for artists and audiences. Moreover, by maximizing the SOH business results and
uses its resources and brands, to invest in the performing arts, cultural activities and the
audience development.
According to Sydney Opera House (2018), value and respect our partners’ contribution
is also an important objective for SOH. Moreover, SOH as a major arts institution is
treasuring and renewing SOH for future artists, visitors and audiences, and committed
to sustainable development goals.
Management issues:
l Firstly, as the building structure of Sydney Opera House is really complex, the
building service systems management will be difficult especially management is
undergoing technological change and new computer services are becoming more
and more important.
l Secondly, as Sydney Opera House is an iconic building in Australia. The security
management is significant. Due to the population growth and economic
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development, more and more people will influx Sydney Opera House which will
lead to security management issue.
l Thirdly, many business functions, such as space or event management, require upto-date facility information. However, this information is not being delivered
adequately at present, so updating and delivering to customers is expensive and
time consuming.
l Fourthly, some major architectural upgrades to the Sydney Opera House are being
planned, which will put considerable pressure on existing facilities to combine
services and manage them effectively
1.2 Business Dynamics
l One of the external business demand and driver for changes is people’s growing
demand for art. According to Sydney Opera House (2018), as the Australian
community changes, the image of the Sydney Opera House’s actual and potential
audience change as well. Moreover, within the population and the number of
visitors increase and diversify, the demand for art will grow. 2016 census figures
that more than 28 percent of Australia’s population was born overseas. The number
of immigrants from India and China has doubled in the past decade, and China has
helped drive the rapid growth of Australia’s tourism industry. The number of
Chinese tourists is expected to more than triple to 3.3 million a year by 2026. In
2017, the Opera House attracted 2.9 million international visitors. Therefore, push
the business development of Sydney Opera House and become the international
leader of performing arts and cultural is necessary.
l A great number of new established venues in Sydney will affect the Sydney Opera
House’s development to some extent. The rise in ticket resale sites and scalping
has increased the financial uncertainty of venues and affected the underlying
market dynamics as well. Moreover, the government subsidies has fallen in recent
years, more and more organisation are rely on private sources of income such as
sponsorships which makes the arts market more competitive. Therefore, private
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funding will become a key growth area for funding arts products and remaining the
connection between Sydney Opera House and third party is significant.
l Reducing carbon dioxide, the gas emission and realize recycling so as to achieve
the goals of sustainable development is the direction of the joint efforts around the
world. Due to the SOH consumes significant quantities of energy and water,
achieve the sustainable development of SOH is imperative. Sydney Opera House
(2020) shows that the inspiration of SOH is aim to become a leader in
environmental and social sustainability. Moreover, the Opera House’s power
purchase agreements with energy retailers Flow Power will also be part of its
sustainability drive, as they will link more than 85 per cent of the opera House’s
annual energy consumption of 16 megawatt hours (equivalent to 2,500 homes) with
available supplies from wind and solar projects in New South Wales (Sydney
Opera House 2020).
1.3 Organisation goals
The strategic direction of Sydney Opera House is a way to bring people from an
ordinary world into extraordinary landscapes and performances. The aim of Sydney
Opera House is to be an international leader in the presentation and development of
artists and their work. We will inspire customers to return by attracting a large number
of visitors and providing them with a wonderful experience. At the same time, we are
try to create a customer-focused workplace where customers recognize their
contribution to the development of the Sydney Opera House, while constantly
exploiting the potential of our staff and inspiring them to achieve excellence.
Meanwhile, according to Sydney Opera House (2020), in addition to becoming a world
leader in arts and cultural performance, SHO is also committed to sustainable
development. At the same time, Sydney Opera House will promote quality education
and learning opportunities, advocate for human rights and diversity in staff and business
operations, reduce inequality, to preserve and revitalize cultural practices, heritage and
sustainability, reduce waste generation to promote efficient use of resources, focus more
on climate changes. SOH will continue to be a leader in sustainable development,
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including achieving and maintaining a six-star green rating and developing a carbon
reduction strategy.
- Core business activities
2.1 Management of business organization and people
The management of core business of SOH consists of two parts, one is the Trust which
is composed of 10 members appointed by the Governor on the nomination of the
Minister for the Arts. Another one is an Executive team which is responsible for
monitoring, developing and implementing the SOH organizational strategy. In addition,
according to the annual report of Sydney Opera House (2019), there has approximate
900 staff work and live with SOH each day, and 10.9 million visitors and
1.4 million audiences attend the performance annually.
The core business of the SOH consists of SOHP, Venue Hire, Theatre & Events,
production services, Tours, Food & Beverage, Front of House, Building Operations,
partnerships, Philanthropy and Ticketing.
Core business activities
Based on the core business of SOH is performance of art and heritage, the relevant core
business activities in organization and people are listed below:
Trust:
l Convene board meetings to confirm the agenda items
l Manage, maintain and care for the venues and site of SOH.
l Promote the scientific research of arts and encourage the new development of art
performance.
l Supervise implementation of strategy and management
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Executive team:
l Performing Arts: responsible for all performance, activities and festivals delivery.
l People & Government: renewal planning policy, heritage and stakeholders.
l Office of the CEO: coordinate the organizational operation, oversee the
management.
l Visitor Experience: Foster tourism experience, responsible for security, retail and
ticketing.
l Production and Event: venue and events operation, sale, planning and recording.
l Engagement & Development: promoting, communications, charitable cooperation
activities.
l Programming: events and festival performance and dancing.
l Corporate Services & CEO: financial, legal, risk and program management.
l Building, Safety & Security: asset operations, maintenance and management.
Permanent and equivalent full-time staff:
l Assist the performance and venue work
l Ensure the security of collections in SOH
l Explanation of exhibits for visitors l Exhibition of route guidance.
l 24/7 online consultant services
Facilities requirement
To ensure the organization and staff normal operation of the core business and provide
the excellent performance for visitors and audience, the facilities required as follow:
l High efficiency and security internal management system and collections
management database
l Safety and aesthetic exhibition space to meet the demand of business needs
l Provide high security level of venue to stakeholder and visitors (Camera and access
surveillance system)
l Convenient and secure access and visitor route
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l Provide the safety and healthy workplace which compliances with the Work Health
and Safety Act 2011 (NSW)
l Efficient and convenient internal staff communication tools
l Adequate relax space and facilities for visitors
l Available emergency rescue equipment
l All buildings and equipment are maintained and renewal on time
l High quality of staging, lighting and audio
l Clean, safe and healthy environment which achieves the 5 Star Green Star Rating
l Comfortable and safe seat
l Exhibition manual should be updated on time
l Human resource management system
2.2 Management of technology and finance
Core business of technology
l Website content management of SOH
l Authentic performance effect with synchronous audio loops and captioned
l Online ticket sale and online consultant
l The digital display of SOH on internet
Facilities requirement
l High standard of cyber security capability（secure network payment environment）
l Automation system for ticketing and common question consultant automatic
system
l High level of digital platform
l Using robots as consultants and tour guide for visitors
l Advanced stage lighting and sound equipment
Core business of finance
The relevant core business activities of finance are examined as two parts bellow:
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category Income Expenses
Core business activities l
l
l
l
l
NSW government
grant
Department
Planning
Environment
Performance
Precinct
Private funding
Other
from
of
and
l General operations
expenses
l Building activities
expenses
l Other expenses
Facilities requirement l Procurement system
l Budget management system
l Income management system
2.3 Management of business partners and risk
Business partners management
category Major partners Partners Sponsors
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Business partners EnergyAustralia, Etilhad
Airays, Mastercard
Airbnb,
G,H,Mumm,
JCDecaux,
Stan, Val
morgan
ARUP, Café
Sydney,
Honeywell and
Judith Neilson
Institute for
Journalism and
Ideas, K&L
Gates, Mamamia,
Quay Quarter
Sydney, Wilson
Parking, Yamaha
Core business
activities
l Support the SOH reaching carbon neutrality
(EmergyAustralia)
l Co-organized event and competition (Etihad and Airbnb)
l Cooperation in charitable activities
l Funds and collection donate
l
Support media content creation and open new cinema
audience channels (JCDecaux)
l
Cooperation of art performance and building scientific
research
Facilities
requirement
l
l
Sponsorship management system
SOH information and category management system
l Donation management and store system
Risk management
Risk Building risk Financial risk People risk
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Core business
activities
l SOHP
maintain
l Theatre and
event
l Venue hire
l Production
services
l Building
operation
l Marketing
l Staff salary
l Grant
management l
Procurement
l Partnerships
l Staff
workplace
environment
l Visitor
emergency
Facilities
requirement
l Human resources risk management system
l Building risk management system
l Financial risk management system
l Emergency risk management system - Existing FM organisation and FM infrastructure
3.1 FM Organization
The Sydney Opera House is iconic worldwide, attracting millions of visitors annually
for its iconic architecture, sightseeing, and theatre. An estimate of 4.5 million people
visits the Sydney Opera House, including over 1,500 events annually. The sales amount
to over AUD 53.11 million annually before including sponsorships and endorsements.
Commercial activities have increased since the 1990s with retail, performance activities
and shows, food, exhibitions, and beverages rising in popularity at the facility. The
facility also nets around AUD 47.52 million in government grants and a further AUD
26.55 million annually in maintenance grants (Mitchell & Schevers, 2006). The Sydney
Opera House is an iconic business whose facilities are valuable, and a business model
is sustainable to warrant an FM audit.
The audit can help in understanding the facility’s assets and their effective use to
generate revenue for the facility.
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The FM organizational set-up for the Sydney Opera House is one central organization.
It is located at the centre of Sydney Harbour in Sydney, New South Wales, Australia
and borders Sydney Harbour Bridge. Other facilities within its surrounding area include
Government House Gardens, Sydney Conservatorium of Music, and the Museum of
Contemporary Art with the latter being farthest. These design factors make the Sydney
Opera House more attractive and strategically located. The business alignment of the
Sydeny Opera House to the Sydney harbour makes it attractive to both local and
international visitors.
3.2 Facility Assets
In 2013, the facility was estimated to be worth AUD 4.6 billion. Additionally, the opera
house contributes AUD 775 million annually to the Australian economy (Sanchez,
Hampson, & Mohamed, 2015). The Sydney Opera House has generated massive
revenues to the tune of AUD 100 million, gained from direct sales, sponsorship, and
services. The facility is an asset in this regard, primarily through space for sales, the
brand name for sponsorships and endorsements, and facilities for extra events.
Maintaining the facility, on the other hand, cost AD 32.3 million. One of the facility’s
significant aspects is its roof, which is made of 1600 segments, each weighing
approximately 10 tons (Sanchez, Hampson, & Mohamed, 2015).
Additionally, there are 5,400 precast tile panels in the outer part of the roof. The
magnificent design has its highest point roof 67 meters above sea level. The facility has
10,000 tile bolts, which have an accuracy of 3mm, which allowed for the pre-setting
and fixing of brackets before lifting tile lids (Sanchez, Hampson, & Mohamed, 2015).
These elements of the infrastructure make the facility increasingly costly.
All assets at the Sydney Opera House are identified through a bar code system that
makes them easy to manage. There are over 7,500 assets on the facility, which
necessitates an annual audit of the assets (Akhurst & Gillespie, 2006). The maintenance
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services for the Sydney Opera House assets are categorized as either preventative or
corrective maintenance for the assets to keep the assets in a good state for the visitors
and participants in different events. The facility creates approximately 200 weekly jobs
in the maintenance of the assets alone. The participants and visitors to the Sydney Opera
House are considered critical resources for the business. An estimated 1,500
performances occur on the facility annually, with 1.1 million attendants as patrons and
an extra 1,000 events that are not performance-related events (Akhurst & Gillespie,
2006). In total, the human asset in attendance nets 4.5 million annually.
3.3 Facility Support Services
The most important support services are building information systems that help
preserve information on the facility and detect any weaknesses that need maintenance.
Digital models and floor plans are part of this system. Other integrated systems include
emergency response systems, health emergency systems, and integrated guest
information systems. Processes and systems at the Sydney Opera House form a core
part of FM’s support services (Mitchell & Schevers, 2006). They help ensure that large
numbers of people visiting the house have their data accessible while protecting them.
They ensure the facility is maintained and areas that are worn out identified. Other
digital systems, such as systems for booking space and systems for checking in, are also
part of the support services. Support services also help in simulating wear and tear to
ensure the effective maintenance of the facility. As it is starting to get old, the Sydney
Opera House needs consistent maintenance to maintain its status as a basis of the
economy. Intelligent systems are also an essential part of the support services vital in
FM. Such systems include power cuts in fire, emergency evacuation triggers, alarm
triggers, and a central database operations centre system.
3.4 Assumptions
In FM for the Sydney Opera House, financial and operational assumptions are critical.
The first critical assumption is that the facility is fully occupied all year long. This helps
to manage the flow of people while undertaking services like maintenance. The FM for
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the Sydney Opera House also assumes that the Australia Facility Management
guidelines are followed, including evaluation and assignment of the facility for use. The
facility is assumed to be well run logically with decisions made in a clear structure, and
the facility’s services optimally maintained and delivered. The financial assumption is
that costs at every stage can be presented in a lumpsum manner. Inflation and other
economic uncertainties can be predicted in the cost and revenue valuation. The Sydney
Opera House is an increasingly attractive facility maintained with the government’s
support over time. The assumption is that this support continues through the FM period
and that the events remain constant. There is an assumption that no unexpected events
interrupt the activities at the Sydney Opera House.
Reference:
Akhurst, P & Gillespie, N 2006, Sydney Opera House Facilities Management
Exemplar Project, viewed 13 October 2020,
RCP-_Sydney_Opera_House_FM_E xemplar_Project.pdf>
Annual report of Sydney opera House Financial Year 2018-2019
Atkin, B & Brooks, A 2015, Facility Management, Total facility management, United
Kingdom.
Mitchell, J & Schevers, H 2006, CRC Construction Innovation ,Sydney Opera House:
facilities management exemplar, CRC Construction Innovation, viewed 13 October
2020,.
Sanchez, AX, Hampson, KD, & Mohamed, S 2015, ‘Sydney Opera House case study
report’, Sustainable Built Environment National Research Centre.
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Sydney Opera House 2018, Artistic Strategy 2018-2021, Sydney Opera House, viewed
9 October 2020,
.
Sydney Opera House 2019, Annual report of Sydney opera house financial year 2018-
2019, company report, Sydney Opera House, viewed 11 October 2020, < https://www.sydneyoperahouse.com/content/dam/pdfs/annual-reports/2018-19_Sydne y%20Opera%20House%20Annual%20Report_LR%20Spreads.pdf >.
Sydney Opera House 2020, Environmental Action Plan 2020-23, Sydney Opera
House, viewed 10 October 2020,
.
Sydney Opera House 2020, Environmental Sustainability, Sydney Opera House,
viewed 10 October 2020,
https://www.sydneyoperahouse.com/general/corporateinformation/environmentalsustainability.html.
Sample Solution
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