GEC NEWS WIREAccording to Fortune Business Insights, the global facility management market is projected to grow from $1,260.36 billion in 2022 to $1,856.44 billion by 2029, at a compound annual growth rate (CAGR) of 5.7% in the forecast period. To take advantage of this growing market demand, facilities management (FM) companies must effectively respond to several trends, challenges and macro-environment changes that have significantly impacted the industry.
First, in the new age of hybrid working, they are having to deal with a more distributed workforce. This model forces facility managers to be more strategic about managing and maintaining office space, building infrastructure, and investing in technology that supports hybrid collaboration. While many companies are scaling back their headquarters operations, others are increasing the number of satellite offices closer to where people live to encourage in-person collaboration. That’s creating new demands and challenges for FM companies.
Second, customers are becoming more demanding and are increasingly looking for outcome-based contracts that provide defined end results and guaranteed solutions to problems rather than traditional ones that simply deliver a product, or a service.
Third, due to an aging workforce and resource shortages, many facilities management teams lack the workers and skills they need. Subcontractors can help to fill in gaps, yet over-dependency can reduce profit margins and result in inefficiencies. It can also hurt customer satisfaction if subcontractors do not deliver the same quality of service as the organisation’s own field engineers, who ultimately serve as brand ambassadors.
Fourth, there is an ongoing drive from facilities management companies to reduce the environmental emissions and waste generated in the buildings they look after today. According to research by Frost & Sullivan, 40% of CO2 emissions, 75% of electricity consumption and around 35% of waste production comes from our creation and use of buildings. These sobering statistics underline why we can expect, globally, to see a far greater enforcement of sustainability policies. This is not just about legislation. More and more, companies who demonstrate credible Environmental, Social and Governance (ESG) performance are being commercially rewarded – winning tenders and business contracts in preference to competitors who, from a sustainable practice perspective, are lagging behind.
Finding a solution
Given all the above, we see a growing list of challenges ramping up for facilities management companies across the sector, the industry is increasingly coming to terms with these and addressing them through a series of interlinked solutions.
In terms of hybrid working, facilities management companies need to come to terms with the variability in demand for services. With peaks and valleys in workplace utilisation, its no longer economical to provide services on a scheduled basis. Instead, FM companies must migrate to a more on-demand service model.
One way they can help support building efficiency is through predictive maintenance. By integrating IoT, data analytics and AI/ML with a field service management software platform, FM companies can anticipate service issues, avoid unnecessary onsite visits, and deliver a proactive experience. These same technologies drive improvements in sustainability and building efficiency, and, as a result, profitability.
With regard to outcome-based contracts, full asset lifecycle support is one approach that offers a positive route forward. Whereas traditional contracts are transactional in nature and focus on service delivered over a limited time frame, outcome-based performance contacts concentrate on value and outcome delivered over an asset’s lifecycle. For example, maintaining the temperate of an office building at a comfortable 72 degrees, whenever the building is occupied.
To deliver on this promise, FM companies need to be able to configure contracts to account for all the service tasks, resources, and processes that make the outcome possible over the asset’s lifecycle.
To address skills shortages, FM companies can drive customer self-service. That starts by providing customers with the ability to book, cancel and reschedule appointments themselves. Building on this, FM companies can empower customers to search FAQs and access user guides, or AI-powered virtual agents, to fix issues themselves.
Finally, in terms of sustainability, we are witnessing facilities management providers looking to cloud-based technology to help them understand whole-life costs and manage and model complex projects and built assets in the most sustainable way.
We are also seeing greater use of sensors to provide real-time data to ensure heating, ventilation and air conditioning (HVAC) systems are operating effectively and efficiently, minimising the use of energy whilst detecting and addressing any system degradation. Sensing also underpins remote resolution, allowing action to be taken before a fault occurs, often preventing the need for a service visit, and enhancing sustainability further.
Looking ahead
The facilities management industry continues to grow dynamically today but for those delivering services, shrinking real estate footprints, the drive towards sustainability, and changing customer expectations can all affect the bottom line. Fortunately, we are seeing tools coming on line that can address all these challenges and thereby help ensure that companies across the sector can forge ahead positively and achieve the growth that is projected for them.
