As clients bargain for lower pricing, higher quality and stringent contract terms, facilities management (FM) providers struggle with the dilemma of bringing down internal costs to reduce their go-to-market contract value to clients, all while balancing efficiencies and sustainability.
Experts told Forbes Middle East how the industry is internally looking at reducing costs and how technology, innovation and transparency are key to retaining customers by delivering greater savings and benefits to them.
The FM industry has evolved over the years to go much beyond its traditional role of cleaning, security and maintenance.
This has meant increased responsibilities, greater costs, but also greater savings and benefits for the owners/users.
“Gone are the days of the traditional caretaker. FM is about taking a holistic view of an entire building and its services, and implementing robust service plans, and asset management and lifecycle strategies to ensure that the original buildings design parameters are met; the buildings systems are optimized; and the building provides the right comfort conditions for its users”, says Peter Fancy, Senior Bid Manager, Services, Multiplex.
‘Be fair with the price’ extols MEFMA
Jamal Lootah, CEO, Imdaad, and President of the Middle East Facilities Management Association (MEFMA) spoke to Forbes Middle East about the evolution of the industry, and the association’s role in acting as an educator and regulator of industry standards to enable greater savings for stakeholders.
“For eight years, we’ve been sending the same message to the owners, the ambassadors, to the companies – be fair with the price! Based on how much it costs you, be honest with that. If the service per sq. ft. costs you one dollar, don’t say 20. You will be out.
“You have to say one dollar. Fine if you can give something better, add two or three cents, but don’t add two dollars” he adds.
With the evolution of the industry and initiatives like MEFMA all geared towards increased transparency, he feels that in order to remain competitive, FM providers will need to be honest in their margins.
“See if as a company you don’t have the correct numbers about how much you spend, and you put any numbers in the contract, you will not stay in the market. You will be out of the game. This is about looking at retention of your client.” Donning his CEO, Imdaad hat, Jamal acknowledges the challenge FM companies face to remain competitive while maintaining quality, service delivery and sustainability, but emphasizes on remaining transparent.
“We should do our best to cut the costs while there is no compromise on the quality. I mean we need to be certified, we have to be having the latest technology, we have to train our team. But today if a Facilities Management company wants to grow and make money, they have to be transparent” he adds.
Technology to the rescue
Technology continues to remain the mainstay for driving significant change, savings and efficiencies for the industry in its rapidly diversifying roles.
Peter Fancy, Senior Bid Manager at Multiplex Middle East, adds: “The FMs role is changing, and through the technological advancements, the use of installed devises, IoTs (internet of things), and wireless technologies, FMs are being challenged to manage their businesses in different ways.
“They are being required to understand data sets and interpret these into actions and support their decision making, meaning that the decision, which they make are more fact based rather than emotional.”
While innovative technologies can definitely impact savings, some experts believe it is the cause necessitated by technology that is the tipping point.
At Emrill for integrated facilities management, a good example of deploying technology to reduce the overall FM overhead is remote monitoring of building management systems (BMS).
“This is an online system where the BMS can be remotely managed from our head office. In essence, one technician can monitor multiple buildings and this means that Emrill does not need dedicated onsite operators at each building, significantly reducing labor overheads” says Gopal Krishnan, Operations Director, Emrill.
Even as technology remains a big driver of efficiencies in the FM industry, experts feel training is equally critical to get optimum value from such an investment as the lack of a trained team can adversely impact the investment in the technology.
“Technology is always the biggest driver. It is about how much you invest and how much of a strong team you have in the company to use the technology. As I said, you can buy very fancy and expensive devices but unfortunately if we don’t have the team to use those devices, it will be a problem. Training, with technology, is important,” Jamal says.
So can these reduced costs eventually be passed onto end-users/owners?
Most experts believe that while that is eventually possible, it can only result through a combination of the various cost saving actions, measuring the results and long-term contract negotiations.
“Over a minimum period of three years, the FM contractor would need to monitor the average cost savings to determine whether these are consistent and can ultimately be passed onto end users” feels Gopal Krishnan from Emrill.
Article Source: Forbes Middle East