Over the last few years the effect of the global recession has seen many organisations focus on cost reduction. With property and FM representing typically the second highest cost for businesses behind people’s salaries, the result has been inevitably a cost squeeze with FM service providers pursuing a ‘race to the bottom’ on price, that has actually left just about everyone unhappy.
All too often, these cost pressures mean that service levels being delivered fail to meet the standards clients require. It’s a story many will be familiar with, but as we emerge from recession, how will things change? As the shackles come off, what sort of FM model will businesses need to support their pursuit of growth and profitability?
This subject came up in a very interesting panel debate at which I spoke at the Facilities Show last year. There was discussion about which type of service delivery model could work best for clients and how FM companies could find new ways of adding value and driving innovation.
My belief is that first we must address one looming challenge in our FM contracts. How do we balance the delivery of the day-to-day, but very necessary, jobs that keep a building running smoothly, with the increasing need to become more strategic and align our activities with the bigger business goals of the client organisation? Could one answer be reverting to insourcing to attain greater alignment of strategic goals and objectives? Possibly, but that ignores the strategic advantages of a third party services provider. It also overlooks the benefits an outsourced provider brings to the equation through the introduction of broader industry best practice, years of experience and levels of expertise, plus innovation and lessons learned from other operations.
My own view is that the move to outsourcing of property and FM services that we have witnessed since the turn of the millennium will continue to accelerate, but that quality rather than cost will be a more important driver in future decisions.
The reason I believe that the drivers will be different is because all around us the workplace environment is changing radically and rapidly. Economic pressures have forced many leading organisations to shrink their property footprints by as much as 40 per cent over the last six years delivering millions of pounds of cost savings on real estate costs. Alternative workplace designs and the rise of mobile technology have facilitated more productive, new ways of working, allowing workers to continue to operate through the adoption of agile working practices.
Recent research undertaken by Mitie indicated that 70 per cent of the respondents worked for organisations that were already operating, or about to implement, agile workspace. By 2020 it is predicted that 60 per cent of UK workers won’t be chained to the traditional fixed desk. FM service providers need to make a step-change in their approach to understanding the agile working approach and start shaping their service lines to reflect and facilitate it.
What does this actually mean in terms of FM services? Instead of boxing ourselves into a corner and providing a list of commodity services to a set of rates, FM outsourcers need to understand that we are now dealing with a much more sophisticated client requirement to provide a ’great workplace’ for people to be creative and productive. This demands a much more holistic approach to service delivery, with the focus shifting from simply cleaning and maintaining buildings and infrastructure to an approach that asks: “What do the people in the buildings need to achieve their goals?” Clients are less interested in what we do and how we do it, but are interested in the benefits we are bringing to the organisation to support their people and generate profit. That means really understanding the core strategies of the client company, providing essential data insights and input to strategic decision making in conjunction with delivering higher value services such as agile worker engagement, hotel and concierge services to support this.
We’ve seen how numerous companies have built amazing workplace environments that support and inspire their people. They’ve done it in just about every case by putting their people right at the centre of every consideration. They believe it will provide a differentiator through attracting a higher calibre of talent as well as providing a competitive edge that will set them apart from their peers. I believe that in this kind of environment the pressure on us in the facilities management industry will be to focus on our soft services to add value to our client organisations rather than just maintaining ‘business as usual’.
Tomorrow’s workplace will also be much more automated and feature a high degree of inbuilt intelligence connected to a plethora of building systems. Data will become a critical success factor because it allows us to understand so much more about how people are using the work space, to benchmark one building against another, to identify anomalies and trends that can help us improve efficiency, quality and reduce cost.
FMs not only generate the majority of useful data from their Computer Aided Facilities Management (CAFM) systems but also have the knowledge and expertise to interpret this data and to act on it. Yet in our research, the consensus was that although access to data was generally good or improving, many organisations were not good at assimilating the data and translating it into action. This surely represents a huge opportunity for FMs to take a strategic lead and increase our profile as a proactive driver of business change.
It’s long been recognised in the print industry that you can have quality, speed or low-cost, but not all three at the same time. In FM some cynics might say you will be lucky to get just one! So how do we as FMs balance that triangle? The answer comes down to building a realistic understanding of what clients feel needs to be achieved, and then sharing those objectives with the FM provider, rather than dictating how a set of tasks are to be delivered. We have countless examples of contracts where the client has started the discussion with a very long laundry list of KPIs and SLAs, but in reality actually wanted to meet no more than a dozen key principles.
Once we agree and establish the parameters of the outcomes those clients wished to achieve, which invariably concentrate on delivering a quality experience to their customers and staff, we will then be able to identify how to best deliver them, which will result in some very creative, yet cost effective answers. The future is looking positive for the industry’s FM service providers. The scary bit is that the future is probably already here.