Procurement Intelligence Unit

The recent advent of World Facilities Management Day shows its crucial role in business success. Although strong facilities management provision itself won't allow companies to clean up in the market, efficiency in back-office operations frees up resources for competitive operations.

If you missed World FM Day, it was an international profile-raising event for the profession that took place last week (24 June). It involved award-giving to the best performers, topical discussions over social networking sites and other festivities. The day even brought a march out onto the streets of Abuja, Nigeria, as local FM representatives sought to take their celebration of FM into public highways.

Facilities management no longer seeks to maintain its low profile, especially in the current economic climate where the department faces budget constraints. Maintenance budgets are easily cut when the consequences are not felt until months, or even years, in the future.

A recent UK-based report found that FM contracts are focusing more upon multi-service provision, as more companies seek to extract economies of scales from a comprehensive package of FM services. Especially during the reason, a significant "flight to price" strategy was seen by procurement departments, as FM contracts were cut to the bone.

Another recent study from the US found that FM professionals are expected to manage increased office space, with increasingly less resources. A study by Today’s Facility Manager found that 40% of FM staff saw increased workload over the last year, yet over half are managing multi-site premises.

However, like many areas of business, FM must see its fair share of cuts. The question for professionals is how to create savings within FM, without facing the potential of large capital outlays in the future. Outsourcing many services, such as cleaning, building maintenance and security are traditionally the FM areas which companies procure out-of-house.

However, with tightening bank balances, companies may consider other areas to save on non-core FM expenditure. UK-based law firm, CMS Cameron McKenna, for instance, has moved to outsource its entire back-office staff to deliver 10-15% efficiency savings. The maintenance of an organisation's physical premises is necessary, but not sufficient to provide competitive edge. Outsourcing FM provision does not lose organisational knowledge, threaten the security of innovation nor does it affect core services. Extending outsourcing up-take in FM may produce significant cost savings. 

Yet companies must not be lulled into a false sense of security over short-term savings. Clients must seek to develop a close relationship with their FM providers, as short-term contracts may lead to undesirable cost-cutting in the short term.

Coupled with these issues, the profession is likely to see big changes in the coming years. The increasing professionalisation of the workers in this sector will also impact upon future operations. Professionally qualified new brooms will sweep into the profession and will enable best practice sharing as new practitioners implement the new policies that they studied in class into the workplace. The old-fashioned profile of FM practitioners in oily overalls will be replaced by the sharp-suited graduate student. 

Furthermore, green issues can no longer be swept under the carpet. Reducing carbon footprints through responsible environmental spend will be embedded into facilities contracts. Current reports indicate that manufacturers are unable to supply the demanded level of green office products. Many product innovations will be entered in the market in the future, and FM professionals will need to be aware of these, and how to plan to integrate these into the company.

FM is set for big transformations. And although its contribution to wider business success should be celebrated, the sector is likely to see sweeping changes in the future, generating opportunities that will produce long-term savings.