“Sea change” set to transform FM industry over next ten years

The facilities management industry will change dramatically over the next ten years as clients increasingly look to FM for advice on business operations, a new study has found.

The research found that property directors increasingly view FM providers as the ‘feet on the ground’ within organisations, providing management with essential information needed by the board.

This will transform perceptions of FM from that of a commodity service to a provider of vital information that can ensure effective operations.

The study, called The Future of Facilities Management, was commissioned by FTSE 250 strategic outsourcer MITIE.

The research drew on in-depth interviews with 30 senior property and facilities directors across the UK to develop a closer understanding of the issues and opportunities they face.

Key findings include:

  • Outsourcing as a means of reducing cost is becoming less popular than as a way to harness expertise
  • Companies are becoming more interested in consolidating multiple services to single suppliers as a way of improving value
  • Energy and carbon consumption are playing a growing role in property decisions and strategies, with a focused effort to drive down both
  • There is a significant consolidation opportunity for service providers able to deliver an integrated package of broad property services
  • A focus on KPIs is rapidly being replaced by a focus on outcomes, with the value attached to the broader outcomes rather than the minutia of a contract

Many FM providers now use the huge amounts of data they capture on operational costs and premises efficiencies, along with their own experience, to identify opportunities for improvement in their client’s organisations.

The result is that companies, and in particular their property directors, now rely on FM providers to assist with changing property strategies that must incorporate an attractive working environment with the need to contain all operational costs.

For example, FM providers can now use their data about occupancy rates and how their premises function and operate on a daily basis, to help Property Directors realise the most effective strategy for property rationalisation and utilisation.

Martyn Freeman, managing director of MITIE’s Facilities Management business said:

“The FM industry is still relatively new, having only really been around for the last 20 years or so. In just that short amount of time, we have seen a change from a demand for single services with multiple providers to a more integrated approach.

“This research shows the industry has huge potential to elevate itself and become fully integrated with its clients, thereby adding more and more value.

“FM providers have their fingers well and truly on the pulse of their customers’ enterprises, and as such are best-placed to act as consultants for particular issues, such as reducing costs or increasing efficiencies.”

Paul Harrington, Real Estate Director, PwC, and one of the participants in the survey said:

“The approach to outsourcing has changed over the last few years and will continue to evolve perhaps at an even faster rate than it has to date.

“A combination of changing work patterns, coupled with the continuing need to reduce overall occupancy costs, will enable service providers to play a more strategic role in the delivery of operations supporting the business.

“For FM providers to evolve as a trusted business partner they need to provide that ‘value add’, providing solutions flexible enough to meet those changing business needs.

“This report recognises the trend for FM providers to work harder at developing closer relationships with their clients to better understand their business needs moving forward and to step up to the challenges ahead.”

However the report has also identified that if the FM industry is to continue growing in stature, it needs to make way for further changes.

In particular, the FM industry needs to examine how it can add genuine value rather than just deliver to an agreed service level.

To achieve this, a shift in focus is required from the minutia of contract terms, to instead creating programmes based on delivering a quality of service that goes beyond basic commodity delivery.

Those interviewed as part of the research thought this gave FM providers an unrivalled opportunity to demonstrate their increased value to organisations.

MITIE is holding a series of debates with key individuals in the FM and property sectors over the coming months to further explore each of the main themes from this research.

Most recently it has held a debate around ‘agile working’, exploring the arguments for agile working and the barriers holding the practice back from becoming fully integrated in every day working life.

To download the full research paper and join in the debate online, visit www.mitie.com/themitiedebates.

MITIE Website