The topic for today is related to the heart of all the Business world. We are going to have look in the service sector and will try to find out how it will become one of the leading sectors all around the world.
For companies with distributed operations – retailers, manufacturers, transportation, and logistics – facility management can represent 10 to 25 percent of the total indirect spending. That’s a lot of money getting invested in this side of the Business. Do u know why..? There are several factors/ Trends leading to the growth of facility management services. Outsourcing is a well-established strategy that’s on the rise thanks to an influx of vendors, while integrated approaches to facilities management, workplace strategy, and technology all hold promise. The global market for Facility management is estimated to reach around $1.9 trillion by 2024. The outsourced segment accounts for more than half the total and has attracted a growing number of vendors with new service offerings.
The six emerging Trends in Facility Management are as follows:
- Outsourcing facilities management
- Integrated value and related services
- Workplace strategy
- Internet of Things (IoT) evolution
- Advent of robots
- Augmented reality
These are some of the most important trends which offer Cost savings and productivity improvement. It totally depends on the organization to an organization that which trending service is required by which company. We will discuss all the Trends in a little detail respectively.
Outsourcing Facilities Management:
Organizations are evaluating their operating model to maximize value creation. Before they outsource facility management to third parties, however, they review the appropriate mix of insourcing and outsourcing based on capability, cost, and coverage. Several factors are altering the equation.
- Growth in outsourcing – Outsourcing has now surpassed 50 percent of the total facilities management market in several regions, including Europe, Middle East, and North America.
- Industry-based adoption - In manufacturing companies, soft services such as landscaping and janitorial are preferred categories for outsourcing. Hard services such as utility equipment maintenance are typically still insourced. If the benefits they achieved are not significant, some players in these industries have opted to fully outsource facility management.
- Penetration of integrated facility management (IFM) - IFMs are capturing increased market share in outsourcing, particularly in North America, where IFMs are close to 20 percent of the outsourced category.
Based on these services there are a lot of questions related to how to implement them. The companies need to be Cost-effective to beat the competition in the market and also to hire quality technicians so that the service is impeccable compared to the Third-party organization.
Incorporated value and associated services
Companies are trying to incorporate the value and associated services in the effort to streamline management and improve performance. This offering can include the following functions such as Facilities Management, Energy management, Production & Maintenance, Employee services, etc. The lesser the Outsourcing providers the more efficient the functions of the company become. Decision-making is easier as fewer people are involved. Suppliers that provide incorporated services can become Strategic Business Partners of the company. Companies like ourself (Teluscare) follow on the same strategy where we offer the providers to become Independent Strategic business provider on their own terms and rate. Factors that are important while considering outsourcing are:
- Organizational capability: Does the real estate function have limited capacity or capability?
- Demographic portfolio: Does the company have a diverse geographic footprint?
- Cost: Are costs higher than benchmarks for peers?
Workplace strategy is becoming one of the most important aspects of employee engagement and retention. Workplace like Modular workspace, Co-working, Lifestyle amenities, Wellness designs, etc.
Notably, trends in this category can increase facilities management costs (for companies that choose to invest more in workspace design), but they could also indirectly compensate for these outlays with higher employee productivity. Also if these are the factors, organizations need to balance employee engagement and workplace investment. Organizations are increasingly looking for suppliers that are capable of maintaining an evolving workplace.
Internet of Things (IoT) evolution
A number of trends and developments are spurring the adoption of IoT-enabled equipment by facilities management across a range of applications. The use of IoT devices, such as motion sensors for lights and automated temperature controls, are some of the best examples of efficiency management. Data transmission costs are determining whether edge, cloud, or hybrid computing approaches will prevail. Security is lagging behind the development of IoT devices and platforms.
Companies should consider partnering with suppliers that have an end-to-end IoT vision and the capabilities required to convert this vision into reality.
Advent of robots
Automation is suited to take over the repeated and hazardous tasks. Asian and European companies are leading in the adoption of robotics for services such as cleaning and security; widespread adoption could occur within the next decade. Applications of robotic process automation are still in the early stages of facilities management. Organizations can pilot robots for repetitive tasks or partner with suppliers that have expertise in the deployment and maintenance of robots.
Developing end-to-end AR solutions that have the potential to transform facilities management. Smartphones and tablets are dominant in the hardware market, while wearables are still in low levels of market penetration. Content sourcing is also a factor that involves IoT’s information collection capabilities. While Mapping is still limited to spatial tracking, marker-based and shape imposition technologies are being developed. Software Development Kits (SDKs) are well developed for consumer applications such as gaming but are still in the early stages for facility management applications. Augmented reality is still in the early stages of development for facilities management. Organizations would have to coordinate across several functions to use AR effectively. Companies should work with partners that are actively engaged with AR providers and pilot technology when the market is ready with a solution.
CONCLUSION (Actions to be taken)
Facilities management leaders can’t simply flip a switch to harness these trends. Some companies will need to adjust their strategy, organizational capabilities, and culture. And considering that a few of these trends are still in their infancy, executives should focus on laying the foundation. Several actions can help. Establish a Cross-functional team between procurement and operations to create an impact that can be sustainable.