Bob Forsyth – Is the FM circle coming back around?

Bob Forsyth - Chief Executive Officer at Kings Security
Bob Forsyth – Chief Executive Officer at Kings Security

Bob Forsyth, Chief Executive Officer at Kings Security, discusses facilities management in his latest blog. Bob writes: “When I began my career in the Security sector 25 years ago, I joined what was at the time the second largest security company in the UK. A well-known brand, they (along with the other 5 top providers) were focused exclusively on the provision of security personnel. Over the last 10 years we have seen the rise of the FM integrator: The ‘top 10’ list of manned security suppliers in the latest Infologue survey is now dominated by large FM providers. The intended benefit of offering security within a bundled or integrated FM solution is to provide clients with a one-stop-shop for services and management information, as well as savings on account management resulting from larger scale contracts.

“However, this was mainly only relevant to the manpower element and – save for some notable FM owned providers – the technology subsector has remained largely untouched. Whilst there may be several reasons for this, for me the technology/fire systems side is much more complex and harder to scale. It also requires the deeper, more technical knowledge associated with systems evolution and engineering infrastructure. Besides, the technology business model is driven more by project revenues than is typically seen in manpower provision, making this type of business less appealing to the monoliths in FM.

“Over the last 24 months, we’ve begun to see the volume FM market falter due to overly aggressive pricing, unachievable revenue reductions and ‘savings plans’ that the service providers simply cannot deliver. I have long held the view that, to be successful in an FM approach, all service lines need a specialist focal point to ensure that best practice and innovation are delivered. Perhaps that’s why I am seeing a market in which clients are starting to migrate back to single, specialist providers, and unplugging certain elements of an FM bundle. Equally, I believe there is a move away from 100% self-delivery by the FM players looking at best in class as part of their own client approach and solution.

“Customers are not gaining the cost base reductions they expected without significant innovation being delivered – an arena that is better suited to the specialist provider. Additionally, there is now little pricing differential between the major providers and, therefore, the procurement function is not able to gain further cost savings. Finally, with limited financial incentive to change providers, customers are looking for support, great service and the true concept of ‘value for money’ – after all, if rates are pretty much standardised across the industry, then why not buy the best for the price?

“One more storm cloud continues to loom over this mature, price-driven market, threatening an even more changeable outlook: increasing wage inflation poses challenges for both technology and personnel providers. Driven by the macro factors of limited labour resource, the skills gap and legislative change this is only set to get worse, driving the cost of the baseline service up each year. This is something that no service provider can ignore, with companies passing these increases on to clients. This reduces the scope of the large bundled FM value proposition – delivering year-on-year savings through scale, is harder than ever to actually achieve.

“So, is the general approach to service coming back around to the specialist providers? I think it is – especially to those that have technology at their core and an ethos of technology-led innovation adopted early in the contract cycle, to deliver smarter (and therefore more efficient) ways of working”.

Kings Security Website