The facilities management sector is an important contributor to the UK, employing roughly 10 per cent of the UK working population and estimated to be worth £111bn a year to the national economy. Stuart Linington, managing director, NG Bailey’s Facilities Service peers into his crystal ball to predict what lies ahead for the sector in 2016
A report by MTW Research in 2015 said the FM market had picked up following a pre-election ‘slump’ with order pipelines rising as the pent-up demand was released.
At least 60 per cent of the FM market is reported to have seen sales growth last year, with lots of new specialists and smaller contractors entering, making it an increasingly crowded marketplace. But that growth is expected to be slow over the next three years, reaching £117bn by 2017. So, in that context, what do I think we can expect to see in the FM market over the next 12 months?
WHAT’S THE FUTURE OF TFM?
Total facilities management (TFM) has been the big buzzword in our sector for a number of years, but more recently there have been signs that clients are starting to consider if TFM is the right way to go.
TFM has seen a move towards the ‘bundling’ of hard and soft FM elements together in building maintenance and management contracts.
This has certainly fuelled the mergers and acquisitions activity in our sector, and as a result some hard FM specialists – such as Norland and GSH – have been swallowed up by the TFM operators to allow them to deliver a total solution to clients.
Hard FM is usually a significant part of any overall facilities management cost and a significant cost. It also has significant risk associated with the services it covers. It is for this reason that customers consider breaking away from TFM to ensure that a specific Hard FM contractor independently retains responsibility for the Hard FM services, ensuring they have the necessary focus.
I think that is why we could see TFM packages being unbundled, with clients engaging separate soft and hard FM specialists.
Clients in both the public and private sector want value for money, and that means exceptional customer service, technical excellence and outstanding delivery. And because of this I think clients will start to consider both bundled and unbundled options more over the next 12 months. Could the move away from TFM gain momentum over the next 12 months?
SMART MAINTENANCE FOR SMART BUILDINGS
While SFG20 is still the definitive standard for planned maintenance, there is no doubt that maintenance needs to be smarter. Clients want their buildings to be more efficient in every respect but, while the “internet of things” offers the potential for smart buildings, in reality FM operations are still playing catch up with the technology.
Technology is being employed increasingly by maintenance teams. It’s much more commonplace now for engineers to be using tablets instead of PDAs, and real-time reporting allows for a more efficient response from service centres and staff. In addition, dynamic scheduling ensures that the right person goes to the right job at the right time.
Clients and contractors can now access vast amounts of data around building performance but, despite industry promises of translating information into a wealth of benefits, we have seen that disparate information gathering rarely leads to the generation of tangible results.
Faced with a plethora of multi-source data, I think the big challenge for FM will be in how we monitor, analyse and act upon the information and which data we choose to use and ignore, in order to manage particular assets in variation to SFG20. It’s also important to do so in a way that creates tangible value to the business owner or user.
With an integrated approach to analysing selected data from “smart buildings” and using it to support the engineering of specific outcomes on particular parts of a building or estate – be that cost reduction, asset up-time, more energy efficient operations, risk management or building user productivity – we should see FM contractors adding more value to their customer base in this area.
While energy efficiency will continue to be a principle driver throughout 2016, energy sustainability doesn’t exist in isolation from productivity sustainability. Using available data to create different outcomes on various parts of an estate can ensure that FM is a profitable and important service.
However, a smart building operations approach not only requires a greater degree of skills development, it also needs joined-up technical operations, IT & FM integration, longer-term contracts and direct investment thinking. We also need a greater degree of contractor/ customer partnership to turn promise into practice. Where we are doing this, we are seeing that significant added value can be released against multiple-line budgets.
If we take a managed step-by-step approach and build up progressive approaches to investment and data-driven FM across longer contract terms, we should see significant results this year. The data is, by and large, already available. The challenge is in filtering out the “noise”, taking a higher-level, longer-term perspective and effectively joining the value dots in a realistic, progressive and manageable way.
FM AT HOME
Residential FM will become an increasingly important sector in 2016, driven largely by the growth in the high-end London housing market.
Alongside the boom in luxury apartment complexes comes the demand for more sophisticated building management services and many landlords are looking to outsource their hard and soft FM needs to specialists.
London has, of course, been the dominant player in luxury residential developments – not just in the UK, but in Europe – but there are clear signs this is starting to spread to other major cities in the UK, such as Birmingham, Manchester and Leeds.
As more high-end residential developments emerge in key cities across the UK, I think the demand for specialist technical excellence on a local and even regional level will increase, providing opportunities for hard and soft FM experts.