1. FM Newsletter July 2012
Facilities Management Update
The Current State of FM: Is TFM the right For these reasons suppliers are continuing to grow
strategy? their portfolio of services, to deliver a broader and
Despite the fragile state of the British economy, the more innovative offer. However, this diversification
Facilities Management (FM) category remains resilient. must be carefully managed to ensure it meets the
This is due to a combination of the category’s long clients’ requirements. Sustainability is a critical factor
term contractual nature and FM market suppliers within supply chain and if not evaluated effectively
maintaining good credit ratings. could lead to disintegrating relationships on both
sides.
These are the findings of a recent report by MTW
Research, which examined the current state of the UK The report concludes that economies of scale, in terms
FM market. The study also found that despite the of procurement and operations, will become
sector’s resilience, difficult market conditions are increasingly sought after, leading to an upsurge in
affecting smaller single service suppliers. On the other acquisitional activity. In the same vein there will be an
hand, suppliers offering Total Facilities Management increase in cross-border integration and market
(TFM) solutions are increasing their market share. development as FM providers look to capitalise on
international economies of scale.
The report shows that value within the FM industry is
driven through longer term strategic partnerships that Outsourcing FM services – Focus on savings
continue to deliver thorough phased approaches over A recent survey conducted by FM World found that,
the contract lifecycle. In this context, TFM provides for the majority of companies (83 per cent of 130), the
clients with reduced margins across multiple service decision to outsource FM services is driven by financial
streams. TFM is particularly important in terms of savings. 64 per cent cited improving service levels.
managing the demand and level of services. These are Other reasons for included obtaining better technical
the areas which 4C has focused on over the past year expertise, transferring risk and focusing on the
in order to successfully deliver savings. organisation’s core business.
Release cash Reduce cost Manage risk Improve ROI
T: +44 (0)20 7605 1600 E: info@4cassociates.com W: www.4cassociates.com
2. A survey carried out amongst 4C clients revealed TFM: Appetite for change
similar results. As part of a recent internal survey, 4C gathered
information on the FM strategy approaches of recent
FM clients.
Of the major cost
transformation
projects
undertaken by 4C
in the past year,
60% have a FM
procurement
strategy
characterised by
purchasing on an
individual service
stream basis,
whereas 40% have
a TFM strategy.
Worryingly, the FM World survey found that only 67 Asked whether the
per cent of respondents said the savings targets were existing strategy
achieved. The reasons provided for ‘failing’, included was the preferred
unrealistic expectations on the client side and inflated future FM strategy
saving claims by the outsourced provider to win the only one of 4C’s
contract. cost
transformation
4C Associates’ FM Lead, Chris Herbert, believes this teams reported an
high rate of failure can be easily rectified. obvious appetite
for change.
“FM is a diverse category and commonly involves
multiple stakeholders with varied focuses. The key is In this case the client favored a stepped approach
to maintain honest and on-going communication with involving bundling services in the first instance before
clients and stakeholders at all times and ensure that potentially moving to a TFM strategy. However, the
targets are challenging yet realistic. Claiming that you consensus amongst 4C cost transformation teams was
can deliver unrealistic savings only serves to destroy that TFM is in the minds of all clients as a strategy but
trust and will backfire in the long run.” that a high level of organisational maturity and
internal co-ordination is required to implement it
successfully.
4C Associates has the insight, technology and
experience to drive rapid profit improvement.
We offer specialist consulting, technology and
managed services to transform your costs. We
apply industry and functional expertise to deliver
exceptional benefits.
Our team works with leading organisations across a
range of cost categories including Direct Materials,
Services, Marketing, IT, HR, Logistics, Supply
Chain, Property and FM. We apply deep practical
knowledge, combined with process and change
“FM is one of the most visible functions within a skills, to deliver reduced costs and increased profits.
business – every employee expects a clean workspace –
and has major implications on productivity and To discuss how we can transform your costs please
morale. So while cost savings may get the headlines, contact us at:
seemingly secondary objectives such as service
enhancement, innovation and risk management are Tel: 0207 605 1600
incredibly important and certainly a major focus of our Web: www.4cassociates.com
work”. Email: Petra.urhofer@4cassociates.com
Release cash Reduce cost Manage risk Improve ROI
T: +44 (0)20 7605 1600 E: info@4cassociates.com W: www.4cassociates.com