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The blueprint of future FM business models

By 28th June 2017Blog, Facilities Management

Blog from Rob Legge, Group CEO, Servest

With every passing decade, the facilities management (FM) landscape shifts noticeably in numerous directions. Back in the 1980s, FM was, in most cases an in-house function. Thirty years on and client requirements have exceeded the scope of the traditional FM offering. It is no surprise, then, that delivery models have changed – and continue to change. Although there remain examples of businesses retaining in-house services critical to their offering, FM is now largely outsourced. Recent research from Global Industry Analysts (GIA) reveals that 69 per cent of the UK market outsources more than half of their facilities services.

Organisations are under increasing pressure to cut costs to their real estate footprint. However, they must do this while simultaneously implementing measures that will help improve engagement, productivity and ultimately, the bottom-line. I think it’s fair to say that business leaders recognise that the FM function is critical when moving to a more collaborative and efficient way of working. As such, there’s more respect for the industry. Despite this recognition, the need to focus on the core business offering can sometimes dilute or override the in-house effort required to adequately maintain the built environment. As the nature of work becomes more complex; so, too, does the FM requirement. As such, in-house FM teams don’t always have the time, the budget or the specialism to execute the necessary provision.

FM providers that offer a range of service lines bring the best of both worlds to the end user. They offer the specialism necessary to execute a diverse array of functions, but with a streamlined approach – meaning the client only has to deal with one party. Liaising with multiple providers to ensure the delivery of a multifaceted FM provision is not time efficient; nor is it cost effective. Perhaps this explains why 70 per cent of end users, as per GIA research, plan to adopt multinational contracts by 2020. There is a growing appreciation for outsourced partners that can deliver a high quality, tailored solution. This cost and time saving alternative also offers the convenience of one point of contact, one invoice and little need to have an extensive in-house FM team.

The outsourcing trend, when reduced to its most basic level, stems from the desire to find a way to make things work in the business as cost effectively as possible.

But it’s not just about partnering with service line specialists – every sector requires its own level of expertise. The greatest innovation we can bring to the table is the structure of our business. We understand that different sectors require different approaches, and we’ve built our business model to ensure that our clients can talk to the specialists that live and breathe their sector. Our retail, manufacturing, education, leisure, healthcare, construction, hotel, public sector, professional services, distribution, utilities and media clients expect us to be experts in delivering FM in similar environments. As you can imagine, the needs of each sector massively vary. In line with these demands, we have moved from a service-line approach – where we organised our businesses into cleaning, security, catering and M&E divisions – into a sector-based approach where our divisions are dedicated to the sectors they service.

In addition, we are making the most of the technology in the FM space. Servest is innovative in nature and each division is exploring the ways and means they can use the Internet of Things (IoT) and ever-advancing tech to enhance the customer experience; whether that’s by interacting in a different, more efficient way – or collating real-time business data as to provide a more proactive and predictive service offering.

We have made these changes to reposition ourselves as a business partner, as opposed to just a service provider. For us, it’s about responding to the challenges of our client base by offering a wider set of service delivery options – without sacrificing the level of expertise required to deliver successful FM.

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