Facilities Management - Q&A

09/07/2019
Blog, Q&A

Kevin Sensier our Category Lead answers a few questions about Facilities Management and how to make them work for your organisation.

What does the Facilities Management (FM) market landscape look like?
The last five years have seen strong growth in the UK Facilities Management (FM) services market. Sector revenues have been increasing at an average rate of 3.4% per annum, despite the impact of recent downsizing in the financial services market. Growth has in part been driven by a trend towards larger contracts encompassing a wider range of services and promising significant cost savings through more effective leverage of service provider resources. This in turn has driven significant convergence in the Real Estate and FM sectors, where ‘white- collar’ global Corporate Real Estate (CRE) providers have merged with ‘blue-collar’ FM service delivery companies, in order to provide more of an ‘end-to-end’ service to their customers. The major players now have the capability to support clients across multiple geographies and offer services ranging from traditional FM disciplines (such as cleaning and planned maintenance) through to catering and concierge services.

Why is there a trend to outsource FM services and what does this mean?
Most organisations have already externalised at least some of their FM services. For example, very few organisations these days employ their own cleaners and maintenance providers. However, the increased range of services being offered by providers is driving a second phase of outsourcing under which additional in-house services are bundled with existing service contracts to achieve better quality, reduce fixed costs and deliver economies of scale. This can be achieved via either single or multiple suppliers managed directly by a client’s internal FM team, or a single FM provider that takes on the direct end- to-end management for a ‘thin client’. A broader outsourced approach involves either an Integrated or Total FM service provider managing multiple suppliers, often across multiple regions, for the client.

How can CPS help you with a ‘health check’ of your FM services?
We offer a rapid FM Opportunity Assessment. Our consultants will review your organisation’s FM operating model, analyse the current service costs for different ‘hard’ and ‘soft’ FM categories and identify potential efficiency savings that can be achieved under differing service delivery models, based on our extensive experience in the market.

Efficiencies typically fall into operational ‘quick wins’ which can be implemented under existing arrangements, and medium to long-term efficiency changes based on service restructuring
and alternative procurement and contracting approaches.

Where initial analysis indicates a cost saving opportunity, we will conduct an FM Benchmarking Review to compare your organisation’s service and cost metrics with industry benchmarks and provide robust projections of potential savings and service quality improvements that can be achieved.

What is the opportunity with Facilities Management services?
Taken together, the full range of FM services (both current contracts and residual in-house services) typically represents a major operating cost for most organisations. Consequently, savings opportunities can be significant.

In our experience, savings as high as 10% to 15% are achievable as a result of bundling services, challenging specifications and service levels, competitively bidding contracts, improving the procurement model and incentivising providers to deliver incremental service and cost improvements.

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