Cover Story

Realty Plus - - Table Of Content -

Lever­ag­ing Fa­cil­ity Man­age­ment in Real-es­tate

Fa­cil­ity man­age­ment (FM) sec­tor started gain­ing roots in In­dia in 1990s. Af­ter a re­luc­tant start, it has seen ro­bust growth in the past two decades. How­ever, the fa­cil­i­ties man­age­ment mar­ket still re­mains highly un­tapped given cur­rent mar­ket pen­e­tra­tion of only 40%. Realty plus analy­ses the FM sec­tor chal­lenges & po­ten­tial go­ing for­ward.

As per the re­port pub­lished by Re­search and Mar­kets, the FM ser­vices mar­ket in In­dia is pre­dicted to grow at a CAGR of 17.19 per cent in 2016-2020. The key driver for the growth is the de­mand mainly from man­u­fac­tur­ing, re­tail, health­care, in­fra­struc­ture & ed­u­ca­tion sec­tors and es­pe­cially from IT/ITES/BPO/ BFSI seg­ment. Var­i­ous hard ser­vices and soft ser­vices re­quired in these in­dus­tries in­clude - Hard Ser­vices (Plumb­ing and Air Con­di­tion­ing, Main­te­nance, Fire Pro­tec­tion Sys­tems, Me­chan­i­cal and Elec­tri­cal Main­te­nance & Oth­ers) and Soft Ser­vices (Clean­ing, Laun­dry, Cater­ing, Waste Man­age­ment, Se­cu­rity, Oth­ers Ad­min­is­tra­tive Ser­vices). Grow­ing de­mand for em­ploy­ee­cen­tric work­places is one trend that is bring­ing FM ser­vices in lime­light. The var­i­ous stud­ies have es­tab­lished strong link­ages be­tween fa­cil­i­ties, em­ployee ex­pe­ri­ence and pro­duc­tiv­ity. For ex­am­ple, a well main­tained HVAC sys­tem for im­proved in­door air qual­ity IAQ) may be per­ceived as a cost, but the bet­ter IAQ re­duc­ing em­ployee sick leaves and the cor­re­spond­ing work hours makes the cost di­rectly pro­por­tion­ate to in­crease in pro­duc­tiv­ity and com­pany prof­its.

ra­jesh Shetty, Se­nior Na­tional Di­rec­tor, Fa­cil­i­ties Man­age­ment, col­liers in­ter­na­tional in­dia men­tioned an­other im­por­tant as­pect of FM, “With FM busi­ness be­ing all about sourc­ing sup­port and al­ter­nate so­lu­tions, sup­ply chain man­age­ment has be­come an in­te­gral part of the busi­ness. And with more and more dili­gence com­ing into FM busi­ness, and with in­tent to strike a right bal­ance be­tween costs and qual­ity, sup­ply chain man­age­ment is tak­ing on a larger dom­i­nant role in the FM busi­ness. And in or­der to drive con­sis­tency in ser­vice de­liv­ery over a sus­tained pe­riod of time, it is crit­i­cal to have longevity of ser­vice part­ners, which could be achieved by care­ful se­lec­tion and con­se­quently nur­tur­ing an on-go­ing re­la­tion­ship cre­at­ing a long term ben­e­fit for all stake­hold­ers.”

WHY FM Ser­vices

An or­ga­ni­za­tion’s build­ing or prop­erty is its big­gest ex­pense and main­tain­ing that as­set for op­ti­mum

ef­fi­ciency and longer life cy­cle can di­rectly add to the bot­tom line of the com­pany. FM can also trans­late the in­tan­gi­ble cor­po­rate brand­ing into tan­gi­ble of­fice en­vi­ron­ment by pro­vid­ing ser­vices and ameni­ties that strengthen over­all work pro­duc­tiv­ity and cus­tomer/client ex­pe­ri­ence. With the in­tent to max­i­mize value and min­i­mize costs in­her­ent in own­ing or leas­ing fa­cil­i­ties, cor­po­rates, ma­jor in­dus­tries and IT sec­tor are em­ploy­ing pro­fes­sional fa­cil­ity man­age­ment ser­vices.

The pro­fes­sional fa­cil­ity man­ager as­sis­tance in leas­ing and prop­erty man­age­ment pro­vides strate­gic di­rec­tion to meet the busi­ness ob­jec­tives. Also, the com­plex build­ing de­signs and ecosys­tem of me­chan­i­cal, en­gi­neer­ing and pro­cure­ment ser­vices re­quire com­bi­na­tion of skill sets to run them smoothly. FM ser­vice providers de­liver that and more in terms of let­ting the busi­nesses fo­cus on their core op­er­a­tions.

More­over, as busi­nesses rely heav­ily on the proper run­ning of the fa­cil­ity, FM ser­vices aid in max­i­miz­ing the value of equip­ment and fix­tures, re­duc­ing op­er­a­tional and main­te­nance ex­pen­di­ture. The grow­ing em­pha­sis on sus­tain­abil­ity and gov­ern­ment reg­u­la­tions to en­sure en­ergy-ef­fi­ciency has also made the role of FM ser­vice provider crit­i­cal in the com­mer­cial, re­tail and in­dus­trial sec­tors.

the global & in­dian Mar­ket

Ac­cord­ing to Trans­parency Mar­ket Re­search (TMR), the global fa­cil­i­ties man­age­ment mar­ket is ex­pected to reach US$1,887 bil­lion by 2024 with Europe at the fore­front and Asia Pa­cific be­ing the most promis­ing mar­ket in the com­ing pe­riod.

The de­mand for FM ser­vices from cor­po­rate sec­tor such as bank­ing and fi­nance, in­surance, and IT is on the rise and the chang­ing gov­ern­ment rules for car­bon foot­print and waste man­age­ment are ex­pected to pro­pel the de­mand for FM in man­u­fac­tur­ing in­dus­tries across the world.

En­ergy con­sump­tion is the vi­tal fac­tor for the small-scale and medium-scale busi­nesses to hire fa­cil­i­ties man­age­ment ven­dors. FM ser­vices are also help­ing or­ga­ni­za­tions world over to com­ply with sus­tain­abil­ity stan­dards and CSR man­dates. Some of the key global FM com­pa­nies are ISS World Ser­vices A/S, Sodexo, Inc., Bil­fin­ger HSG Fa­cil­ity Man­age­ment Gmbh, Broad­spec­trum Pvt. Ltd. (Aus­tralia) Ara­mark Corp., Em­cor Group, Car­il­lion, Atkins, Macro, MITIE, Ren­tokil Ini­tial, among oth­ers.

In com­par­i­son, In­dian fa­cil­ity man­age­ment mar­ket size is es­ti­mated to grow to USD 56.67 bil­lion by 2021. The lead­ing FM ven­dors in In­dia are - Avon FMS, CBRE, Cush­man & Wake­field, Jones Lang Lasalle, Knight Fa­cil­i­ties Man­age­ment, UDS, Atkins, ISS, Nou­vel to name a few.

The In­dian FM mar­ket is ge­o­graph­i­cally strong in cities such as Ban­ga­lore, Delhi, Mum­bai, and to some ex­tent Pune and Chen­nai. Ban­ga­lore com­mands 40% share of the over­all fa­cil­ity man­age­ment mar­ket rev­enues. Though In­dian FM sec­tor has pres­ence of in­ter­na­tional FM com­pa­nies and ma­jor do­mes­tic or­ga­nized play­ers, the ma­jor chunk of the mar­ket is dom­i­nated by un­or­ga­nized and small scale FM ven­dors. Nel­lie Sa­muel, Joint chief ex­ec­u­tive, Knight Frank Prop­erty ser­vices ltd. said, “The global FM is top driven and iden­ti­fies this ser­vice as an in­sep­a­ra­ble part of the over­all struc­ture. The skill lev­els are high and the em­pha­sis is on au­to­ma­tion backed by tech­nol­ogy based so­lu­tions. In­dian FM on the other hand is man­power in­ten­sive and is seen purely as a sup­port func­tion. It is han­dled mostly by the ad­min­is­tra­tion de­part­ment and the gov­er­nance is fo­cused on cost re­duc­tion. The process it­self is man­power in­ten­sive and the skills at the func­tional level are in­ad­e­quate.”

the in­dian fm Mar­ket Driv­ers

Realty sec­tor Growth: The real-es­tate sec­tor in In­dia is slated to grow at 30% and is pre­dicted to reach USD 180 bil­lion by 2020. Ac­cord­ing to CBRE, 2016 wit­nessed record of­fice space ab­sorp­tion lev­els of over 43 mil­lion sq. ft. re­flect­ing a 9% y-o-y growth. In 2017, the of­fice sec­tor is likely to main­tain its mo­men­tum with an an­tic­i­pated ab­sorp­tion of 40 mil­lion square feet and IT/ ITES be­ing the key de­mand driver for space across the coun­try. In re­tail seg­ment, seven mil­lion square feet of ad­di­tional Grade A sup­ply is ex­pected to hit the mar­ket, led by South­ern cities. Sim­i­larly, there will be an in­creased de­mand for mod­ern ware­hous­ing and in­dus­trial parks that has al­ready crossed 10 mil­lion sq. ft. mark in 2016. Such vig­or­ous growth in realestate pro­vides im­mense po­ten­tial for in­te­grated FM ser­vices com­pa­nies.

as projects go multi­na­tional and mul­ti­cul­tural, there is a grow­ing de­mand for fm ser­vice providers who can man­age cul­tural di­ver­sity within the work­place and un­der­stand the lo­cal reg­u­la­tions for or­ga­ni­za­tions to es­tab­lish in new mar­kets.

When com­pared to global stan­dards, fm in in­dia is yet to see the ma­tu­rity that west­ern coun­tries have at­tained. the in­dian FM mar­ket con­tin­ues to re­main price sen­si­tive and thus re­mains frag­mented with un­or­ga­nized lo­cal play­ers of­fer­ing to match the tar­get prices and thereby fail­ing to bring in a longer vi­sion of en­hanc­ing the over­all as­set value.

Deepak Up­pal, ex­ec­u­tive Di­rec­tor, vatika Ho­tels Pvt. ltd. cor­rob­o­rated, “The growth of the fa­cil­ity man­age­ment sec­tor in In­dia is di­rectly pro­por­tional to the growth of real-es­tate sec­tor. The in­creas­ing Grade ‘A’ com­mer­cial spa­ces, multi-na­tional com­pa­nies of­fices and lux­ury res­i­den­tial are driv­ing the de­mand for ser­vices like house­keep­ing, se­cu­rity, main­te­nance etc.”

Grow­ing IT/ITES/BPO sec­tor:

The coun­try ac­counts for ap­prox­i­mately 65% of the global IT mar­ket which is ex­pected to con­tinue to grow at a rate of 12%13%. Global oc­cu­piers ac­count for siz­able share of leas­ing ac­tiv­ity and de­mand from do­mes­tic cor­po­rates is also on the rise. These com­mer­cial space oc­cu­piers fol­low in­no­va­tions in work­place strate­gies and space uti­liza­tion while im­ple­ment­ing their ex­pan­sion plans for which var­i­ous hard and soft fa­cil­ity man­age­ment ser­vices are re­quired. san­deep Sethi, Man­ag­ing Di­rec­tor – in­te­grated fa­cil­i­ties Man­age­ment, Jll (West Asia) added, “FM in a lot of ways mir­rors the growth tra­jec­tory of the IT/ ITES sec­tor, with very sim­i­lar tal­ent de­mands as well as tal­ent-re­lated chal­lenges. There is a min­i­mum year-on-year ad­di­tional man­power de­mand of about 14%. If one adds an ap­prox­i­mate at­tri­tion rate of 25% to this, the min­i­mum em­ploy­a­bil­ity op­por­tu­nity is 39% at a prin­ci­ple em­ployer level. At a sub-con­trac­tor level there is a sim­i­lar de­mand.”

Adop­tion of BMS:

The ad­vance­ment in build­ing tech­nol­ogy and de­ploy­ment of Build­ing Man­age­ment Sys­tems

(BMS) al­low FM com­pa­nies to func­tion ef­fi­ciently. Link­ing of var­i­ous ser­vices like Se­cu­rity sys­tem, HVAC, Ac­cess con­trol etc., on a sin­gle dash­board for mon­i­tor­ing en­ables timely ac­tion with­out dis­rupt­ing or­ga­ni­za­tions work­flow. This brings in trans­parency and client con­fi­dence on FM providers boost­ing the FM busi­ness.

In­creas­ing FM Out­sourc­ing:

The com­plex busi­ness and reg­u­la­tory en­vi­ron­ments are forc­ing busi­nesses to fo­cus on their core ob­jec­tives and out­source non- core func­tions like main­te­nance and prop­erty man­age­ment. The growth in tech­nol­ogy in FM sec­tor is also mak­ing it eas­ier for va­ri­ety of fa­cil­ity ser­vices to be man­aged by out­side ven­dor.

Out­sourc­ing fa­cil­i­ties Man­age­ment

While jury is still out whether in­house or out­sourc­ing of FM ser­vices is bet­ter, it all de­pends on the end-user sec­tor as well, as to which FM model works best for them. The role of FM is to sup­port non-core busi­ness so that the or­ga­ni­za­tion can fo­cus on its rev­enue gen­er­at­ing

core busi­ness. For ex­am­ple, in com­mer­cial sec­tor, build­ings per­form a sup­port­ing func­tion and in­come is gen­er­ated in gen­eral from non-build­ing-re­lated ac­tiv­i­ties whereas, in a ho­tel in­dus­try, in­come is gen­er­ated di­rectly from ac­tiv­i­ties within the build­ing it­self and build­ing be­comes the pri­mary gen­er­a­tor of rev­enues.

There­fore, the ef­fect and in­flu­ence of FM on its users largely de­pends on its im­por­tance within a given sec­tor. In­dus­try re­search points out that out­sourc­ing of FM has been more preva­lent and suc­cess­ful in en­vi­ron­ments where the fa­cil­i­ties are part of the non-core ac­tiv­i­ties of the or­gan­i­sa­tion.

Ben­e­fits of Out­sourc­ing: As a non-core ac­tiv­ity, op­er­at­ing of FM in-house can be costly, in terms of both money and time. Out­sourc­ing not only saves the com­pany’s staff time spent on over­see­ing FM but also mi­imizes ex­penses re­lated to FM soft­ware and their timely up­dates. Also, KPI per­for­mance mon­i­tor­ing is a vi­tal as­pect of en­sur­ing that the out­sourced FM ven­dor is work­ing ef­fi­ciently. This KPI mon­i­tor­ing also en­ables the com­pa­nies to keep eval­u­at­ing their ex­ist­ing goals and amend them to be more ef­fec­tive as per the fu­ture goals.

With such chang­ing re­quire­ments and busi­ness strate­gies, the in­house FM sys­tems would need to be changed or up­graded. A good out­sourced FM sys­tem will of­fer the flex­i­bil­ity of se­lect­ing the ser­vices from his ex­ist­ing bou­quet of ser­vices as per the com­pany’s goals, sav­ing time, ef­fort and cost of change over.

Con­tract Tran­si­tion Man­age­ment (CTM): A tran­si­tion plan is im­por­tant while tran­si­tion­ing from in­ter­nally pro­vided ser­vices to an out­sourced con­tract to avoid rep­e­ti­tion of past mis­takes and en­sure a win/win con­tract for both the provider and fa­cil­ity man­ager. A CTM should ad­dress: • In­fra­struc­ture and tech­nol­ogy

(e.g., CMMS/IWMS) • Pro­cesses (e.g., eval­u­a­tion and mon­i­tor­ing) Com­mu­ni­ca­tion & Col­lab­o­ra­tion Peo­ple Man­age­ment • •

Ac­cord­ing to teena Shouse, CFM, IFMA Fel­low, vice Pres­i­dent of cor­po­rate ser­vices at fa­cil­ity en­gi­neer­ing as­so­ciates, “CTM should in­volve change man­age­ment, clar­i­fi­ca­tion of roles and re­spon­si­bil­i­ties and a sys­tem­atic ap­proach to man­ag­ing the tran­si­tion, the risks, and the change. Most of the time fail­ure oc­curs be­cause both par­ties did not do the nec­es­sary due dili­gence lead­ing to lack of co­or­di­na­tion be­tween pro­cure­ment and the busi­ness unit, weak pro­gram scope and full un­der­stand­ing of client ex­pec­ta­tions, etc. A suc­cess­ful tran­si­tion takes time. Even for very sim­ple con­ver­sions to be suc­cess­ful, at least four to five months are needed. It is es­sen­tial to have clear tran­si­tion ex­pec­ta­tions, as well as the time and the fund­ing nec­es­sary to achieve those ex­pec­ta­tions. Fi­nally, a suc­cess­ful tran­si­tion re­quires a well-de­vel­oped risk man­age­ment plan, iden­ti­fy­ing the po­ten­tial is­sues and the ef­fects it will have on the tran­si­tion process.”

un­der­stand­ing in­no­va­tion in FM

It’s hard to quan­tify ‘in­no­va­tion’ which needs to be fu­elled by cre­ativ­ity and ideas. It would in­volve in­te­grat­ing long term vi­sion, mar­ket analysis and prod­uct de­vel­op­ment as well as plans to im­prove out­comes. In­no­va­tion is about up-skilling FM professionals to use new tech­niques, equip­ment and tech­nol­ogy and cre­at­ing new op­tions that re­flect qual­ity of life propo­si­tion.

In­no­va­tion in Fa­cil­ity Man­age­ment is not as straight­for­ward as in prod­uct-cen­tered com­pa­nies. The ser­vice in­no­va­tion can­not be a se­ries of ran­dom im­prove­ments but, has to be a planned ap­proach, co­or­di­nated across the busi­ness and prac­ticed bot­tom-up or top-down. Statis­tics show that the costs al­lo­cated to in­no­va­tion in the FM in­dus­try are three times lower than in the pro­duc­tion in­dus­try. The rea­son is that FM sec­tor pro­vides in­tan­gi­ble prod­ucts which make them dif­fi­cult to per­ceive and in­no­vate.

Larger the ser­vice providers are, more likely it is that there will be in­no­va­tion as they may have ro­bust ex­per­i­men­ta­tion pro­cesses in place as well as many sites on which idea gen­er­a­tion can take place. Also, in-house fa­cil­ity man­age­ment teams in­no­vate less than out­sourced fa­cil­ity man­age­ment ven­dors be­cause of cul­tural in­er­tia, lack of size and pro­cesses, and lack of out­side in­spi­ra­tion.

the NEW age fm

Global and In­dian or­ga­ni­za­tions are putting forth well-de­fined KPIS (key per­for­mance in­di­ca­tors) for pur­chase, main­te­nance and in­surance of prop­erty, plant and equip­ment (PPE), and other re­lated costs to en­able FM com­pa­nies to pro­vide ac­cu­rate data re­gard­ing ex­penses

and sav­ings and im­prove the ser­vice de­liv­ery of the or­ga­ni­za­tion. In ad­di­tion, the emer­gence of web­based tech­nolo­gies like EVM, GIS, CMMS and BIM, al­low ac­cess to in­for­ma­tion in mul­ti­ple lo­ca­tions and fa­cil­i­tate trans­par­ent com­mu­ni­ca­tion. Thus, ser­vice providers can now eas­ily iden­tify op­por­tu­ni­ties for re­source op­ti­miza­tion and cost ef­fi­ciency.

Ad­vance­ments in En­ter­prise As­set Man­age­ment (EAM):

EAM or CMMS (Com­put­er­ized Main­te­nance Man­age­ment Sys­tem) tools now have mo­bile apps that al­low for main­te­nance val­i­da­tion with photo sub­mis­sion, GPS lo­ca­tion val­i­da­tion, time stamp­ing the work or­der, scan­ning the bar code, or an RFI at­tach­ment to the equip­ment. The ap­pli­ca­tions are seam­less, endto-end sys­tems from the ini­ti­a­tion of the work or­der re­quest to pay­ment of the ven­dor. The tech­nol­ogy for these ap­pli­ca­tions has been en­hanced to in­clude cus­tomer sat­is­fac­tion sur­veys, life cy­cle man­age­ment of the as­sets, CAPEX bud­get­ing and bench­mark­ing.

Build­ing In­for­ma­tion Mod­el­ling (BIM):

BIM gives build­ing own­ers and op­er­a­tors a com­plete vis­ual of build­ing be­fore it is con­structed. Fa­cil­ity Man­agers are us­ing BIM for pro­ject de­liver and data ac­ces­si­bil­ity. When in­te­grated with ex­ist­ing work or­der pro­grams or fa­cil­ity main­te­nance soft­ware, fa­cil­ity teams re­al­ize an im­proved abil­ity to re­trieve O&M man­u­als, floor plans and as­set in­for­ma­tion. The en­hanced in­te­gra­tion of con­struc­tion data into the fa­cil­ity man­age­ment space is still go­ing on but, BIM has proved to be the en­abling tech­nol­ogy for col­lab­o­ra­tion among all the stake­hold­ers of a fa­cil­ity.

In­ter­net of Things (IOT):

IOT refers to the net­work of in­ter­net ac­ces­si­ble de­vices uti­lized by the fa­cil­ity that may in­clude sen­sors, ther­mostats and ac­tu­a­tors to eval­u­ate data etc. By uti­liz­ing IOT sys­tems, Fa­cil­ity Man­agers are bet­ter in­formed of cur­rent tem­per­a­ture, light, vi­bra­tion or even sound lev­els in ar­eas of a build­ing and can ma­nip­u­late the lev­els for bet­ter ef­fi­ciency. Though the tech­nol­ogy is costly to set up, it will con­tinue to de­velop and be a co­he­sive part smart build­ingsand their main­te­nance.

Ad­vanced HVAC & BAS:

The ad­vance­ments in heat­ing, ven­ti­la­tion and air-con­di­tion­ing (HVAC) and build­ing au­to­ma­tion sys­tems (BAS) are pro­grammed to en­able no­ti­fi­ca­tion to fa­cil­ity man­age­ment teams for preven­tive and cor­rec­tive main­te­nance. This helps op­ti­mize fa­cil­ity man­age­ment, pre­vent costly equip­ment fail­ure and saves money by solv­ing prob­lems be­fore they oc­cur. The fur­ther in­te­gra­tion of these ad­vanced sys­tems with fa­cil­ity main­te­nance soft­ware will auto cre­ate and as­sign work or­ders to team mem­bers based on the type and lo­ca­tion of the prob­lem.

Au­to­mated FM Soft­ware:

Au­to­ma­tion is the key to FM suc­cess as these sys­tems au­to­mat­i­cally sur­face the needed in­for­ma­tion when a work or­der is cre­ated, avoid­ing un­cer­tainty even in the ab­sence of a Fa­cil­ity man­ager. Au­to­mated FM tech­nol­ogy pro­vides timely and rel­e­vant in­for­ma­tion to pre­vent data en­try du­pli­ca­tion and clut­ter.

Robotics & Drones:

Ro­botic clean­ing for HVAC vents and roof in­spec­tions by drones are just some of the ad­van­tages for fa­cil­ity man­agers. As this tech­nol­ogy gets more re­fined it will be­come more com­mon place with a re­duced cost to use in fa­cil­ity man­age­ment. The big­gest op­por­tu­nity for ro­bots and drones is in safety and au­to­ma­tion.

fm con­tract­ing

Re­gard­less of the type of fa­cil­ity, it is im­por­tant to en­sure that the fa­cil­ity man­age­ment con­tract fulfils its re­quired pur­pose. The con­tract should set out the pre­cise scope of the fa­cil­i­ties man­age­ment ser­vices to be per­formed by the ser­vice provider to­gether with the KPIS which the ser­vice provider is re­quired to achieve. Such KPIS should be Spe­cific, Mea­sur­able, Achiev­able, Rel­e­vant and Time based so as to be ca­pa­ble of be­ing as­sessed ob­jec­tively for the ben­e­fit of both the par­ties.

A ‘work plan’ sub­ject to pe­ri­odic re­view from the ser­vice provider will demon­strate how the ser­vices will be dis­charged and ful­fil the KPIS. It is im­por­tant that the ser­vice provider has car­ried out all rea­son­able in­ves­ti­ga­tions and in­spec­tions of the as­set to be man­aged as per the stan­dards pre­scribed by the fa­cil­i­ties man­age­ment con­tract and is aware of the day to day use and op­er­a­tion of the as­set to avoid any loss. Also, a clause for sub­mis­sion of reg­u­lar re­ports to the em­ployer re­gard­ing the sta­tus of the fa­cil­i­ties man­age­ment ser­vices and a sched­uled main­te­nance plan pre-agreed in terms of scope and cost in­clud­ing re­spon­si­bil­ity for procur­ing spare parts (em­ployer or FM provider) is vi­tal.

A process of fi­nan­cial penal­ties for rel­e­vant re­quire­ments not at­tained and bonuses avail­able if KPIS are ex­ceeded should be in-built in the con­tract. Prac­ti­cal penal­ties should be worked out bear­ing in mind the spe­cific char­ac­ter­is­tics of the pro­ject. For ex­am­ple, a ser­vice in­ter­rup­tion dur­ing non-peak hours will call for lesser penalty than the in­ter­rup­tion oc­cur­ring dur­ing peak hours of busi­ness.

Fi­nan­cial penal­ties need to be sig­nif­i­cant enough to in­cen­tivize the ser­vice provider to com­ply with KPIS but not un­duly oner­ous so as to be coun­ter­pro­duc­tive, dam­ag­ing

the ser­vice provider’s cash flow and there­fore its abil­ity to ad­e­quately pro­vide the ser­vices.

Fail­ing to plan for ter­mi­na­tion can lead to con­sid­er­able un­cer­tainty and in­creased costs for both the par­ties. The ter­mi­na­tion clauses worked out to­gether with an exit man­age­ment plan will build in any de­mo­bil­i­sa­tion costs and han­dover pro­ce­dures. ra­jesh Shetty added, “For the main FM con­tract, and for an emerg­ing or­ga­ni­za­tion, the Cost plus model is the best op­tion, as it would ac­com­mo­date all vari­a­tions to ser­vices, while also of­fer­ing scope to bun­dle up ser­vices as per or­ga­ni­za­tion’s size and scale. In the next growth phase, as ser­vice re­quire­ments get de­fined in a pre­dictable man­ner en­abling re­al­is­tic as­sump­tion, the con­tract with Fixed (or Not to Ex­ceed) costs with fixed fees for the longer pe­riod of time is more ap­pro­pri­ate. In a fur­ther ma­ture & sta­ble growth phase, of­ten re­ferred as 3rd gen­er­a­tion sourc­ing con­tract, Fixed (Not to Ex­ceed) Costs with an open book pol­icy at the end of the longer term (say 3 -5 years), al­low­ing for any course cor­rec­tions sub­ject­ing to nom­i­nal 5% vari­a­tion on ei­ther side, would be ideal.”

“the fm in­dus­try has in the past, fo­cussed a lot of its ef­forts com­pet­ing on cost. How­ever, as the world economies on the whole re­cover from re­ces­sion, the fo­cus will quickly shift from cost to value; this is a great op­por­tu­nity for our in­dus­try, but it will re­quire a change in

chal­lenges to over­come

In In­dia, FM is still con­sid­ered as a cost to the com­pany rather than a con­trib­u­tor to the cor­po­rate bot­tom line The FM in­dus­try is also fac­ing serious skills gap as de­mand for trained professionals ex­ceeds the sup­ply. More­over, keep­ing up with the dy­namic reg­u­la­tions and fre­quently chang­ing codes is one of the ma­jor chal­lenges for FM ven­dor. Now, with sus­tain­abil­ity be­com­ing an im­por­tant fac­tor, fa­cil­ity man­agers need to take a top-down ap­proach to fa­cil­ity man­age­ment con­sid­er­ing in­stal­la­tions, up­grades and main­te­nance and build­ing op­er­a­tion. Some of the per­ti­nent is­sue fac­ing the In­dian FM sec­tor in­clude: • Lack of reg­u­la­tion and rep­re­sen­ta­tion at statu­tory de­ci­sion mak­ing bod­ies • Ab­sence of for­mal ed­u­ca­tion in

FM sub­jects at all lev­els • In­ad­e­quate train­ing fa­cil­i­ties • Short­age of skilled man­power at

func­tional level • High at­tri­tion rate in the

work force

mind-set and maybe even skills.” andrew Wilkin­son, Mar­ket­ing Di­rec­tor at Sodexo, UK

• Non-in­volve­ment of FM pro­fes sion­als at de­sign and de­velop ment stage of build­ings to facil itate bet­ter main­te­nance

Nel­lie sa­muel pointed out, “The labour laws are fo­cused on fac­to­ries and are not suited for the main­te­nance re­lated ser­vices. Well­con­ceived labour reg­u­la­tions for the FM sec­tor will go a long way in mak­ing this sec­tor at­trac­tive to the work­force. Reg­u­la­tions spec­i­fy­ing skill lev­els, pro­fi­cien­cies and cer­ti­fi­ca­tions should be for­mal­ized and im­ple­mented for the FM in­dus­try.” Ac­cord­ing to in­ter­na­tional fa­cil­ity Man­age­ment As­so­ci­a­tion (IFMA) re­port, the top chal­lenges fac­ing FM professionals are: • Lack of ac­cess to the C-suite hin­ders the abil­ity to ad­e­quately and proac­tively align fa­cil­i­ties with core busi­ness strat­egy • Smaller staffs mean man­ag­ing a num­ber of out­sourced ser­vice providers and still meet­ing or ex­ceed­ing ex­pec­ta­tions of the busi­ness units and de­liv­er­ing cost sav­ings • Chal­lenges in tran­si­tion­ing from tra­di­tional rear view mir­ror and static bench­mark­ing to for­ward-look­ing dy­namic, in­no­va­tion ori­ented an­a­lyt­ics • Need to de­velop the soft skills and the tech­ni­cal skills of FM work­force In­deed, the role of the fa­cil­ity man­ager has changed dras­ti­cally over the past decade. It is now a tech- savvy and prob­lem-solv­ing po­si­tion that is re­quired to keep up to date with emerg­ing fa­cil­ity man­age­ment ex­per­tise, ever chang­ing reg­u­la­tions and labour laws as well as be an in­no­va­tor, fi­nan­cial man­ager and a peo­ple’s per­son.

Ra­jesh shetty

Nel­lie sa­muel

Deepak UP­PAL


teena shouse


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