Time for change in facilities management - Interserve, Sheffield Hallam and i-FM facilities management research 2013
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Time for change in facilities management Interserve, Sheffield Hallam and i-FM facilities management research 2013
CONTENTS
01 About the
facilities deal
06
05 The role of the
relationship
22
02 Outsourcing
objectives
10
06 Innovation
in facilities
26
03 The role of
your brand
16
07 The future
market
30
04 Considerations of 18
outsourcing versus 08 Background
data
34
Executive
summary
in-house delivery
09 Summary 38
“The last few years have seen companies constantly cutting costs, Interserve commissioned this market
research with Sheffield Hallam University
> There is a 50/50 split between those that
think brand plays a part in their strategy
> One third of respondents said that
finding a suitable service provider and
however this year our research shows that businesses are starting and i-FM, for the third year running, to
look at the shape of current and future
and those that think it doesn’t managing the contract are the biggest
challenges of outsourcing
FUTURE OF OUTSOURCING:
to look at not just doing things for less, but at doing them facilities outsourcing, as well as the issues
and trends in the market. This year the
> Cleaning is the most likely service to be > 70% of those who deliver services in-
re-tendered or re-scoped at contract end house think the cost of outsourcing is
better. This step-change in service delivery can only be achieved report looks at specific areas around
innovation, relationships and future trends. > Value for money and reducing costs are
too high
with innovation and partnership. You need great ideas to help 227 people responded to the survey, and
their insights and opinions showcase an
becoming less important in larger deals > Communication (76%) and working
together as a team (76%) are the most
> On average only 6% of people are likely
transform service delivery, but you need a strong relationship to interesting future for the market:
to bring services in house in the future
important factors in helping buyers
outsource better
THE MARKET’S GETTING LARGER:
deliver this on the ground. Reassuringly that is what the market > 16% increase in those outsourcing over
> Only 17% of companies are likely to stay
with the same supplier in the future
AN INNOVATIVE APPROACH:
76% of their estate > 90% of respondents believe it is
believes as well; longer term contracts offer more value in 91% > 14% increase in those outsourcing
> 37% of people believe there will be more important suppliers bring new ideas
outsourcing but to fewer multi-service to the table
of cases, and 90% of the companies services to one provider
suppliers
> 22% of all innovation is total innovation
> Cleaning, maintenance and security
believe it is important that suppliers outsourced in nearly 70% of cases
> Over 50% of the market believes there
will be more european and global
i.e. radical change
> 52% think organisations will improve
bring new ideas to the table. It’s time REASONS FOR OUTSOURCING:
> Financial savings (72%), better technical
outsourcing deals in the next five years
productivity and efficiency of services
BUILDING THE RIGHT RELATIONSHIP: to a great extent in future
to change, and it’s time to do expertise (64%), and transfer of risk
(59%) are top three objectives for
> In 91% of cases people prefer long term
contracts
it together.” outsourcing
> Access to best practice (94%), better
> Cost, innovation and local supply chain
technical expertise (93%) and service
Tony Sanders, Managing Director – Commercial, Interserve are most important factors in a tender
level improvements (93%) are the three
evaluation
most important factors in building a
> 94% of people believe cost is most successful client / partner relationship
important factor in tender evaluation,
followed by innovation at 86%
02 TIME FOR CHANGE IN
FACILITIES MANAGEMENT
TIME FOR CHANGE IN
FACILITIES MANAGEMENT 03FACILITIES SERVICES
DELIVERY MODEL
23.9% 7.2%
ALL SERVICES TOTAL FACILITIES
DELIVERED MANAGEMENT
IN-HOUSE AND PROPERTY
SERVICES
10.1%
TOTAL FACILITIES
23.9%
SINGLE SERVICES MANAGEMENT
About the
OUTSOURCED MODEL
13.8%
BUNDLED
research: 21%
SERVICES
INTEGRATED
SERVICE
Interserve commissioned this research from Sheffield
Hallam and i-FM. It was undertaken between July and
August 2013. Online questionnaires were distributed PROVISION OF
via i-FM and by the Centre for Facilities Management FACILITIES SERVICES
Development at Sheffield Business School.
227 individuals responded to the survey.
50.4% 4.5%
PROVIDE FACILITIES OTHER
SERVICES TO OTHER
THREE KEY EXPERIENCE ORGANISATIONAL BUDGETS ORGANISATIONS
DRIVERS OF SPLIT
37.5%
PROVIDE
OUTSOURCING
39.7%
BUY FACILITIES FACILITIES
SERVICES SERVICES
IN-HOUSE
DID YOU
KNOW:
This is the third year running we
> COST
60% 72% 53%
have conducted this survey and
over that time the demographics
> VALUE FOR of the respondents has remained
MONEY
18%
HAVE 5+ YEARS OF PRIVATE HAVE LESS THAN £5 largely unchanged. The significant
EXPERIENCE OF SECTOR MILLION BUDGET differences are:
> FLEXIBILITY OUTSOURCING
28%
PUBLIC AND
THIRD SECTOR
18%
HAVE MORE THAN £51
MILLION BUDGET
12%
MORE
MORE
FACILITIES
CONSULTANCY AND
SERVICE PROVIDERS
PRIVATE SECTOR THAN IN 2012
RESPONDENTS
THAN IN 2011
04 TIME FOR CHANGE IN
FACILITIES MANAGEMENT
TIME FOR CHANGE IN
FACILITIES MANAGEMENT 05WHAT PERCENTAGE OF YOUR KEY: 2013
FACILITIES ARE OUTSOURCED? 2012
1 - 25% 14.6%
22.75%
26% – 50% 15.6%
20.96%
51% – 75% 20.8%
23.35%
76% – 99% 30.2%
20.66%
01 100%
12.28%
18.8%
HOW ARE YOUR SERVICES
About the CURRENTLY DELIVERED?
facilities deals ALL IN-HOUSE
23.9%
26.6%
SINGLE SERVICE 23.9%
Those who outsource are doing so to a much 22%
greater degree. Private sector organisations are
increasingly choosing integrated or total facilities BUNDLED SERVICES 13.8%
management models, whilst cost and savings 12.2%
continue to drive outsourcing choices.
INTEGRATED DEALS 21%
14.4%
TOTAL FACILITIES 10.1%
MANAGEMENT MODEL 6.1%
OUTSOURCING DEALS ARE GETTING
LARGER AND MORE CONSOLIDATED TOTAL FACILITIES 7.2%
MANAGEMENT AND
PROPERTY SERVICES 4.4%
OTHER 14.4%
HOW LONG ARE YOUR
OUTSOURCING DEALS?
16% 14% 70%
LESS THAN 1 YEAR 6.4%
4%
1 - 3 YEARS 4.3%
INCREASE IN THOSE INCREASE IN THOSE CLEANING, MAINTENANCE 9.4%
OUTSOURCING OVER 76% OUTSOURCING SERVICES AND SECURITY OUTSOURCED
OF THEIR ESTATE TO ONE PROVIDER IN NEARLY 70% OF CASES
3 - 5 YEARS 22.37%
15.5%
5 - 10 YEARS 26.6%
30.4%
10 YEARS OR OLDER 40.4%
40.7%
06 TIME FOR CHANGE IN
FACILITIES MANAGEMENT
TIME FOR CHANGE IN
FACILITIES MANAGEMENT 07SERVICES CURRENTLY BEING
OUTSOURCED
27.4% 25%
PROJECT
ESTATES
MANAGEMENT
69% 19%
58.3% MANAGEMENT
SECURITY CONSULTANCY /
FM STRATEGY
29.8%
CATERING
72.6% 78.6%
22.6%
OFFICE GENERAL /
SERVICES COMMUNICATIONS /
MAINTENANCE SPECIALIST TELECOMS
AND CLEANING
40.5% ENGINEERING
44%
21.4%
UTILITIES
26.2%
BUILDING
HEALTH MANAGEMENT
AND SAFETY SYSTEMS
SERVICES /
ENERGY
CONSULTANCY
MANAGEMENT
08 TIME FOR CHANGE IN
FACILITIES MANAGEMENT
TIME FOR CHANGE IN
FACILITIES MANAGEMENT 09WHAT IS YOUR OBJECTIVE FOR OUTSOURCING
AND HAS IT BEEN ACHIEVED?
OBJECTIVE % OF OBJECTIVE ACHIEVED 100%
FINANCIAL 2013 80% 72%
SAVINGS 2012 80% 70%
BETTER TECHNICAL 2013 76% 64%
EXPERTISE 2012 84% 60%
02 TRANSFER OF RISK/
SHARE RISK
2013
2012
68%
75%
59%
57%
ACCESS TO BEST 2013 71% 56.5%
Outsourcing PRACTICE
REDUCE
2012
2013
76%
83%
50%
56%
objectives IN-HOUSE STAFF
SERVICE LEVEL
2012
2013 63%
94% 49%
56%
IMPROVEMENTS 2012 73% 61%
GREATER 2013 69% 53%
FLEXIBILITY 2012 86% 48%
BUYING 2013 63% 52%
EFFICIENCIES 2012 78% 55%
DID YOU
KNOW? #1 Financial savings has been the number one objective for three last years.
Better technical expertise replaced service level improvements in second place.
FOCUS ON
CORE BUSINESS
2013
2012 76%
85% 51%
51%
BETTER 2013 58% 49%
HIGHLIGHTS MANAGEMENT INFO 2012 74% 41%
72% 80% 11%
SAVE ON 2013 59% 48%
MANAGEMENT TIME 2012 73% 56%
INNOVATION IN SERVICE 2013 42% 41%
FINANCIAL SAVINGS, HAVE ACHIEVED THEIR LESS HAVE ACHIEVED THEIR
DELIVERY 2012 56% 40%
BETTER TECHNICAL NUMBER ONE OBJECTIVE OUTSOURCING OBJECTIVES
EXPERTISE (64%), AND OF ACHIEVING FINANCIAL IN 2013 COMPARED IMPROVE ON IN-HOUSE 2013 77% 33%
TRANSFER OF RISK (59%) SAVINGS (72%) TO 2012 QUALITY
TOP THREE OBJECTIVES 2012 85% 37%
FOR OUTSOURCING
IMPROVE 2013 53% 33%
SUSTAINABILITY 2012 72% 29%
33% INCREASED 2013 67% 26%
COMPETITIVENESS 2012 82% 37%
DELIVER IMPROVED 2013 56% 18%
OF PEOPLE RATE TECHNICAL EXPERTISE AND COST, INNOVATION AND CLEANING IS THE MOST
SUSTAINABILITY AS AN ABILITY TO FOCUS ON CORE LOCAL SUPPLY CHAIN ARE LIKELY SERVICE TO BE RE- BRAND IMAGE 2012 89% 18%
OBJECTIVE AND IT IS BUSINESS ARE NOW MORE MOST IMPORTANT FACTORS TENDERED OR RE-SCOPED
ACHIEVED IN 19% LESS IMPORTANT IN OUTSOURCING IN A TENDER EVALUATION AT CONTRACT END
CASES THAN IN 2012 MODELS THAN SERVICE
LEVEL IMPROVEMENTS
10 TIME FOR CHANGE IN
FACILITIES MANAGEMENT
TIME FOR CHANGE IN
FACILITIES MANAGEMENT 11CHOOSING THE EVALUATING CONTRACT
RIGHT MODEL BIDS AND TENDERS
> People procuring bundled services are > When procuring total facilities > For total facilities management and 94% of people believe cost
looking for more added value through management people are looking for property people are looking for ability is most important factor in
innovation than through cost efficiencies ability to focus on core business and to focus on core business and improved tender evaluation, followed by
73%
94% 65%
technical expertise instead of value management information rather than innovation 86%, local supply
> Those procuring integrated services are
for money and reducing costs value for money and reducing costs chain 73%, skills development
looking for more technical expertise
68% and sustainability 65%.
than value for money
LOCAL
SUPPLY
CHAIN SUSTAINABILITY
TOP DELIVERABLES BY SERVICE
COST
86% 68%
MODEL OVER TIME
SKILLS
INNOVATION DEVELOPMENT
ANSWER OPTIONS 2011 2012 2013
2011 2012 2013
IN-HOUSE > Service Quality > Flexibility in Service > Service Quality
NO LITTLE NEUTRAL IMPORTANT VERY
Delivery
> Communication > Communication IMPORTANCE IMPORTANCE IMPORTANT
> Service Quality
SUSTAINABILITY
SINGLE SERVICES > Improved Management > Service Quality > Service Quality
Information
> Access to Technical > Access to Technical Expertise
3.7% 8.5% 23.2% 42.7% 22%
> Value for Money Expertise
SKILLS DEVELOPMENT
2.4% 3.7% 25.6% 51.2% 17.1%
BUNDLED SERVICES > Reducing Costs > Reducing Costs > Reducing Costs
> Management of Risk > Value for Money > Added value/innovation
INNOVATION
2.4% 2.4% 9.8% 59.8% 25.6%
INTEGRATED SERVICE > Reducing Costs > Value for Money > Reducing Costs LOCAL SUPPLY CHAIN
> Management of Risk > Reducing Costs > Access to Technical Expertise 2.4% 6.1% 18.3% 54.9% 18.3%
COST
1.2% 1.2% 3.7% 32.9% 61%
TOTAL FACILITIES > Ability to Focus on Core > Value for Money > Ability to Focus on
Business Core Business
MANAGEMENT > Reducing Costs
> Improved Management > Access to Technical
Information Expertise
TOTAL FACILITIES > Not applicable > Value for Money > Ability to Focus on Core Business
DID YOU
KNOW? #2 Innovation is the second highest (following cost) important
factor in a tender evaluation
MANAGEMENT AND > Reducing Costs > Improved Management
PROPERTY Information
12 TIME FOR CHANGE IN
FACILITIES MANAGEMENT
TIME FOR CHANGE IN
FACILITIES MANAGEMENT 13FUTURE OF OUTSOURCED
CONTRACTS
6% 17% STAY WITH
SUPPLIER
RE-TENDER
THE SAME
RE-TENDER AND
RE-SCOPE
BRING
IN-HOUSE
N/A
> RETENDERING OR > OF PEOPLE ON AVERAGE > OF COMPANIES ARE
RESCOPING THE ARE LIKELY TO BRING LIKELY TO STAY WITH
CONTRACT IS THE SERVICES IN-HOUSE THE SAME SUPPLIER
MOST LIKELY OPTION
BUILDING MANAGEMENT
SYSTEMS 15% 19% 35% 11% 20%
CATERING
14% 25% 42% 5% 14%
COMMUNICATIONS/
TELECOMS 21% 13% 27% 6% 33%
CONSULTANCY/FM
STRATEGY 21% 4% 34% 4% 36%
ENERGY
MANAGEMENT 15% 21% 29% 8% 27%
ESTATES
MANAGEMENT 21% 14% 33% 5% 28%
GENERAL/SPECIALIST
CLEANING 19% 26% 47% 6% 1%
HEALTH AND
SAFETY SERVICES/ 19% 7% 29% 5% 40%
CONSULTANCY
MAINTENANCE AND
ENGINEERING 20% 22% 48% 5% 6%
OFFICE
SERVICES 13% 15% 28% 4% 39%
PROJECT 15% 15% 33% 4% 33%
MANAGEMENT
SECURITY
17% 25% 36% 9% 13%
UTILITIES
15% 22% 33% 7% 22%
14 TIME FOR CHANGE IN
FACILITIES MANAGEMENT
TIME FOR CHANGE IN
FACILITIES MANAGEMENT 15HOW IMPORTANT IS OUR BRAND AS
PART OF OUR BRAND STRATEGY?
NO PART 2013
CRUCIAL
2013 2013
32.2% 21.1%
2012
2012 34.93% 2012 15.3%
SMALL
03 PART
2013
IMPORTANT
2013
The role of 20% 26.7%
your brand 2012 27.63% 2012 22.15%
HOW BRANDING PLAYS A ROLE
IN YOUR BRAND STRATEGY
DID YOU
KNOW? 11% There has been a 11% drop in those who
see brand plays no part in their strategy
Linked to Not seen as
HIGHLIGHTS strategic important to
corporate core business
Seen as central objectives
Used as a (i.e a back office Cost
to maintaining
marketing tool function and with no (seen as an
(Good facilities =
staff well-being impact on customers) overhead)
good corporate and productivity
image)
HOW BRANDING WHY Old premises
THERE IS A 50/50 SPLIT THERE IS ALSO NO WHERE BRAND DOESN’T
BETWEEN THOSE THAT DIFFERENCE BETWEEN PLAY A ROLE IN FACILITIES Part of PLAYS A ROLE DOESN’T restrict
growth and
THINK BRAND PLAYS A THOSE IN THE PRIVATE AND
PUBLIC SECTOR IN TERMS
MANAGEMENT IT IS demonstrating
IN YOUR BRAND IT PLAY A investment
PART IN THEIR STRATEGY BECAUSE OF ITS COST, NO organisation’s
AND THOSE THAT THINK OF BRAND PERCEPTIONS ENGAGEMENT IN BUILDING misson and vision STRATEGY ROLE?
IT DOESN’T AND THE COMPANY HAS A (i.e around sustainability,
LACK OF BRAND IDENTITY service quality,
innovation)
Lack of
brand
Management
It is a specific identity
Seen as central to do not place
client/customer government
value on
satisfaction target in some
facilities
within the cases
(i.e. cleanliness,
services
organisation safety)
16 TIME FOR CHANGE IN
FACILITIES MANAGEMENT
TIME FOR CHANGE IN
FACILITIES MANAGEMENT 17WHY HAVE YOU NOT CONSIDERED
OUTSOURCING TO DATE?
9.4%
25%
71.9%
MARKET PLACE /
PROVIDERS’
CAPABILITIES NOT
MATURE
04 ACTIVITIES ARE
TOO STRATEGIC
IN NATURE
Considerations of
outsourcing versus
68.8%
COSTS
WOULD BE
in-house delivery HIGHER
There are differing perceptions about the challenges
of moving to outsourcing compared to the actual
68.8%
challenges encountered.
9.4%
RISKS
NO COMPELLING
HIGHLIGHTS BUSINESS CASE
TOO
HIGH
TO CHANGE
70% 68% 31.3%
OF PEOPLE THINK THE
COST OF OUTSOURCING IS
OF THOSE THAT DELIVER
SERVICES IN-HOUSE THINK 15.6%
TOO HIGH TO CONSIDER THERE IS NO COMPELLING
OUTSOURCING CASE TO CHANGE
SATISFIED WITH
CURRENT SERVICE LOYALTY
DELIVERY MODEL TO STAFF HAD A BAD
OUTSOURCING
EXPERIENCE
DID YOU
KNOW? 15% of those who provide services in-house have had a bad
experience of outsourcing
18 TIME FOR CHANGE IN
FACILITIES MANAGEMENT
TIME FOR CHANGE IN
FACILITIES MANAGEMENT 19IF YOU WERE TO CONSIDER OUTSOURCING WHAT ARE 2013 2012
WHAT ARE THE PERCEIVED
THE OBJECTIVES YOU WOULD WANT TO ACHIEVE? RESPONSE RESPONSE
CHALLENGES OF OUTSOURCING
ACCESS TO BEST 51.7% 1/3 OF RESPONDENTS SAID THAT FINDING A SUITABLE SERVICE PROVIDER AND
PRACTICE 30% MANAGING THE CONTRACT ARE THE BIGGEST CHALLENGES OF OUTSOURCING
BETTER MANAGEMENT 27.6%
INFORMATION/SERVICE 25% DID YOU Top 3 reasons to outsource, for those that do not already, are financial savings
KNOW? (69%), buying efficiences (62%), and access to best practice (51%)
BETTER TECHNICAL 48.3%
EXPERTISE 27%
BUYING 62.1%
EFFICIENCIES 43% CHALLENGES
DELIVER IMPROVED 6.9% FACED BY THOSE CHALLENGES THOSE
BRAND IMAGE 13% THAT ALREADY PROVIDING ALL
OUTSOURCE WHEN SERVICES IN-HOUSE
FINANCIAL 69% OUTSOURCING FM BELIEVE THEY
SAVINGS 68% SERVICE DELIVERY WOULD ENCOUNTER
IF THEY WERE TO
FOCUS ON CORE 27.6%
BUSINESS OUTSOURCE
29% Managing
the
GREATER 34.5% Finding a contract
FLEXIBILITY 20% suitable
Managing
Cost the
service
contract
IMPROVE ON IN-HOUSE 34.5% provider
QUALITY 29% Monitoring
performance
IMPROVE 17.2% Internal Losing/
SUSTAINABILITY 17% resistance Unions/
Keeping TUPE
to change control
INCREASED 20.7% Controlling
COMPETITIVENESS 18% the budget
INNOVATION IN FM 41.4% Need to make Internal
SERVICE DELIVERY sure the tender Service resistance
30% documents and Managing Quality to change
contracts are service
REDUCE 44.8% clear about what quality
IN-HOUSE STAFF 31% is expected
SAVE ON 31% Unions/ Finding a
MANAGEMENT TIME 37% TUPE
Communication
suitable
service
SERVICE LEVEL 31% provider
IMPROVEMENTS 30%
Co-ordinating
multiple
TRANSFER OF RISK/ 41.4% suppliers
SHARE/MITIGATE RISK 31%
21%
increase in those who would consider outsourcing to provide People believe that it is difficult to find a service provider who understands their
DID YOU DID YOU
better technical expertise. 10% increase in those who think requirements, who has the skills, structures and efficiencies to deliver the service
KNOW? outsourcing would achieve innovation. KNOW? and can offer more than just cost savings.
20 TIME FOR CHANGE IN
FACILITIES MANAGEMENT
TIME FOR CHANGE IN
FACILITIES MANAGEMENT 21HOW IMPORTANT ARE THESE FACTORS IN BUILDING
A SUCCESSFUL CLIENT / PARTNER RELATIONSHIP
NO LITTLE UNSURE IMPORTANT VERY
IMPORTANCE IMPORTANCE IMPORTANT
ACCESS TO BEST 2%2%2% 63% 31%
PRACTICE
BETTER MANAGEMENT 2%1%5% 56% 36%
INFORMATION/SERVICE
05
BETTER TECHNICAL
2%1%4% 54% 39%
EXPERTISE
BUYING EFFICIENCIES 2%4% 7% 51% 36%
The role of the DELIVER IMPROVED
BRAND IMAGE
7% 15% 26% 33% 19%
relationship FINANCIAL SAVINGS 2% 4% 5% 41% 49%
The issue of finance continues to dominate outsourcing, as it FOCUS ON CORE
2% 5% 11% 50% 32%
BUSINESS
is still considered the most important factor of a successful
relationship. However communication and working together
GREATER 2%2% 10% 59% 27%
as team are the key areas for improvement. FLEXIBILITY
IMPROVE ON IN-
5% 7% 21% 49% 18%
HOUSE QUALITY
HIGHLIGHTS
IMPROVE 4% 11% 16% 51% 17%
SUSTAINABILITY
94% 90% 76%
ACCESS TO BEST OF RESPONDENTS BELIEVE COMMUNICATION AND
INCREASED
COMPETITIVENESS
INNOVATION IN FM
SERVICE DELIVERY
4%
2% 7%
7%
12%
20% 48%
52%
21%
28%
PRACTICE, BETTER IT IS IMPORTANT SUPPLIERS WORKING TOGETHER AS
TECHNICAL EXPERTISE BRING NEW IDEAS TO THE A TEAM (76%) ARE THE REDUCE IN-HOUSE 6% 14% 24% 42% 14%
(93%) AND SERVICE LEVEL TABLE MOST IMPORTANT FACTORS STAFF
IMPROVEMENTS (93%) IN HELPING BUYERS
ARE THE THREE MOST OUTSOURCE BETTER
IMPORTANT FACTORS IN SAVE ON 2% 5% 11% 61% 21%
BUILDING A SUCCESSFUL MANAGEMENT TIME
CLIENT / PARTNER
RELATIONSHIP
SERVICE LEVEL 2%1%4% 55% 38%
IMPROVEMENTS
TRANSFER OF RISK /
3% 7% 13% 41% 36%
SHARE / MITIGATE RISK
DID YOU Did you know that supporting the delivery of an improved brand image is the
KNOW? least important factor in building a successful client / partner relationship.
22 TIME FOR CHANGE IN
FACILITIES MANAGEMENT
TIME FOR CHANGE IN
FACILITIES MANAGEMENT 23HOW IMPORTANT IS IT THAT SUPPLIERS EFFECTIVENESS OF
BRING NEW IDEAS TO THE TABLE CONTRACT LENGTHS:
2.4% 1.2%
NO IMPORTANCE LITTLE
91%
IMPORTANCE IN 91% OF CASES PEOPLE
PREFER LONG TERM
CONTRACTS
6%
NEITHER
46.1%
VERY IMPORTANT IMPORTANT NOR
UNIMPORTANT
44.3%
IMPORTANT
SHORT TERM LONG TERM NEITHER BOTH
(3YEARS)
94.4%
ABILITY TO EXIT
DID YOU of respondents believe it is important for CONTRACT
51.9% 11.7% 18.2% 18.2%
KNOW? suppliers to bring new ideas to the table.
BUILDING 5.1% 73.1% 7.7% 14.1%
RELATIONSHIPS
WHAT CAN BE DONE TO HELP COMMITMENT TO
BUYERS OUTSOURCE BETTER STRATEGIC GOALS
7.8% 68.8% 6.5% 16.9%
COST OF 9% 59% 16.7% 15.4%
PROCUREMENT
38.3% 37.7% EFFICIENCY SAVINGS 15.8% 46.1% 13.2% 25%
BETTER WRITTEN BETTER FLEXIBILITY IN 28.6% 31.2% 14.3% 26%
REQUESTS FOR GOVERNANCE SERVICE DELIVERY
56.3%
PROPOSALS STRUCTURES
FLEXIBILTY IN
76.6% PROCUREMENT OF
SERVICES
31.1% 31.1% 13.5% 24.3%
IMPROVE
65.3% INNOVATION IN 12% 48% 16% 24%
76.6%
SERVICE LEVEL SERVICE DELIVERY
AGREEMENTS
PARTNERSHIP 7.9% 65.8% 7.9% 18.4%
CLARIFICATION APPROACH
COMMUNICATION OF ROLES AND
56.9%
RESPONSIBILITIES
QUALITY OF SERVICE
45.5% DELIVERY 14.3% 35.1% 13% 37.7%
WORKING
TOGETHER AS STABILITY AND
KPI’S
58.1% ONE TEAM
BETTER
BASELINE COSTS
RELIABILITY
9.2% 53.9% 9.2% 27.6%
AND
REPORTING
BETTER ALIGNMENT
OF STRATEGIES/
PLANS
38%
Ability to exit the contract is the only reason people prefer short term
DID YOU of people think better written requests for DID YOU contracts. And only in flexibility in service delivery and procurement
KNOW? proposals would help buyers outsource better KNOW? do long term and short term contracts have equal advantages
24 TIME FOR CHANGE IN
FACILITIES MANAGEMENT
TIME FOR CHANGE IN
FACILITIES MANAGEMENT 25ARE YOU DOING HOW WOULD YOU DESCRIBE
INNOVATION? YOUR INNOVATION?
35.2%
YES WE HAVE IMPLEMENTED
22.5%
TOTAL INNOVATION ACTIVITY
AN INNOVATION
42.3% 26.9%
INCREMENTAL
YES OUR INNOVATION IS
06
ONGOING INNOVATION ACTIVITY
13.7%
13.2%
EXPANSIONARY
INNOVATION ACTIVITY
Innovation in
NO WE HAVE NOT UNDERTAKEN
ANY ACTIVITY
26%
facilities
EVOLUTIONARY
INNOVATION ACTIVITY
24%
DID YOU Innovation didn’t make the top 10 objectives for outsourcing. DID YOU believe that using contract terms will help make
KNOW? And only 42% of people thought it was achieved in 2013 KNOW? innovation a requirement in service delivery
HIGHLIGHTS HOW DO YOU MAKE INNOVATION A
REQUIREMENT OF SERVICE DELIVERY?
77% 67%
IN 77% OF CASES BELIEVE LINKING
INNOVATION IS HAPPENING INNOVATION TO STRATEGIC
34.2%
OBJECTIVES IS THE
BEST WAY TO ACHIEVE
INNOVATION 24.2%
67.8% 28.9%
22% 60%
THROUGH
USING 8.1% CONTRACT
KPIS TERMS
USING
SLAS NOT
OF ALL INNOVATION OVER 60% OF LACK OF FUNDS IS THE APPLICABLE
IS TOTAL I.E. RADICAL INNOVATION IS BIGGEST BARRIER TO LINKING INNOVATION
CHANGE REWARDED AT AN INNOVATION TO STRATEGIC AND
INDIVIDUAL AND AT BUSINESS OBJECTIVE
A TEAM LEVEL
26 TIME FOR CHANGE IN
FACILITIES MANAGEMENT
TIME FOR CHANGE IN
FACILITIES MANAGEMENT 27TO WHAT EXTENT HAVE THESE FACTORS HAMPERED
DID YOU Respondents measure innovation using customer satisfaction, client feedback, YOUR ABILITY TO INNOVATE
KNOW? performance outputs, and key performance indicators
NOT AT ALL SOMEWHAT AND QUITE A BIT AND
MODERATELY VERY MUCH
HOW DO YOU
REWARD INNOVATION? DIFFICULTY IN FINDING 47.8% 43.5% 8.6%
INNOVATION PARTNERS
INNOVATIONS COSTS
AS AN INDIVIDUAL AS A TEAM ARE TOO HIGH 40% 36% 24%
LACK OF FINANCE FROM
SOURCES OUTSIDE 54.2 25% 20.9%
LACK OF FUNDS WITHIN
YOUR ORGANISATION 33.3% 33.3% 33.3%
LACK OF INFORMATION
ON MARKETS 41.7% 46.7% 16.7%
LACK OF INFORMATION
TECHNOLOGY 45.8% 46.7% 12.5%
LACK OF QUALIFIED 45.8% 25% 20%
PERSONNEL
MARKET DOMINATED BY 45.8% 41.7% 12.5%
ESTABLISHED FIRMS
NO NEED BECAUSE 45.8% 32.5% 16.6%
OF NO DEMAND
64%
YES
63% NO NEED DUE TO
PRIOR INNOVATIONS
UNCERTAIN DEMAND FOR
56% 36% 8%
YES INNOVATIVE GOODS AND 33.3% 45.8% 20.9%
SERVICES
36% 37% DID YOU
KNOW?
There is no significant barrier to innovation, on average
all responses ranks in the somewhat category
NO NO
28 TIME FOR CHANGE IN
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TIME FOR CHANGE IN
FACILITIES MANAGEMENT 29DO YOU THINK THE FACILITIES MANAGEMENT MARKET WILL
CHANGE FUNDAMENTALLY IN THE NEXT FIVE YEARS?
17.5% NO
37.2%
FUNDAMENTAL
CHANGE
CONTINUED PATTERN
8.2%
OF OUTSOURCING
INCREASINGLY LED BY
A FEW MULTI-SERVICE
07
PROVIDERS
FACILITIES SERVICES
ABSORBED INTO WIDER
BPO CONTRACTS
The future market 8.2%
29%
CONTINUED PATTERN OF
OUTSOURCING BUT A RETURN RETURN TO IN-HOUSE
TO INDIVIDUAL SPECIALISTS MANAGEMENT AND
SERVICE PROVISION
DID YOU
KNOW? 45% of people anticipate single services to decrease
significantly in the next five years DID YOU
KNOW? 8% of people think there will be a
return to in-house management
HIGHLIGHTS
IN THE NEXT 5 YEARS HOW WILL DEMAND
CHANGE FOR THESE MODELS?
37%
OF PEOPLE BELIEVE
50%
OF THE MARKET
DECREASING
A LOT
DECREASING
A FAIR BIT
NOT MUCH
CHANGE
INCREASING
A FAIR BIT
INCREASING
A LOT
THERE WILL BE MORE ANTICIPATE INTEGRATED
OUTSOURCING BUT TO SERVICES, TOTAL SINGLE
SERVICES 15.3% 30.5% 34.5% 14.1% 5.6%
FEWER MULTI-SERVICE FACILITIES MANAGEMENT
SUPPLIERS AND TOTAL FACILITIES
MANAGEMENT WITH BUNDLED
PROPERTY SERVICES WILL 3.4% 20.1% 40.2% 30.5% 5.7%
INCREASE A LOT OVER THE
SERVICES
NEXT FIVE YEARS
INTEGRATED 2.2% 11.2% 30.7% 43%
SERVICES 12.8%
50% 52%
TOTAL FACILITIES 4.5% 12.5% 22.7% 37.5%
MANAGEMENT 22.7%
TOTAL FACILITIES
MANAGEMENT AND 3.4% 14.5% 25% 29.5% 27.8%
OF THE MARKET BELIEVES THINK ORGANISATIONS PROPERTY SERVICES
THERE WILL BE MORE WILL IMPROVE
EUROPEAN AND GLOBAL PRODUCTIVITY AND
OUTSOURCING DEALS EFFICIENCY OF SERVICES
TO A GREAT EXTENT IN
FUTURE
30 TIME FOR CHANGE IN
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TIME FOR CHANGE IN
FACILITIES MANAGEMENT 31WHAT WILL BE THE FIVE MOST IMPORTANT FACTORS IN THE FUTURE TO WHAT
IN OUTSOURCING IN THE NEXT FIVE YEARS? EXTENT WILL ORGANISATIONS:
NOT AT ALL VERY LITTLE SOMEWHAT TO A GREAT DON’T KNOW
EXTENT
1 SKILLS DEVELOPMENT OF FACILITIES MANAGEMENT TEAM
ALIGN FM TEAM TO 4% 21% 40% 32% 3%
BRAND VALUES
2 SUSTAINABILITY CONTINUE TO DEVELOP 2% 18% 48% 31% 1%
SKILLS IN EMPLOYEES
IMPROVE THE PRODUCTIVITY
3 COMMUNICATION AND EFFICIENCY OF SERVICE
DELIVERY
2% 8% 37% 52% 1%
INCLUDE SUSTAINABLILTY
AS A KEY DECISION- 1% 18% 32% 49% 1%
4 INFORMATION / SERVICE PERFORMANCE DATA MAKING FACTOR
REDUCE THE COST OF 4% 18% 50% 27% 1%
OUTSOURCING DEALS
5 ACCESS TO TECHNICAL EXPERTISE
IN FIVE YEARS TIME DO YOU THINK
THERE WILL BE MORE OR LESS? DID YOU
KNOW? 49% think sustainability will become more
important in organisations operations
LESS NO CHANGE MORE
TOTAL FACILITIES 20% 23% 58%
MANAGEMENT DEALS
EUROPEAN 13% 30% 57%
OUTSOURCING DEALS
GLOBAL 17% 29% 54%
OUTSOURCING DEALS
DID YOU
KNOW? 10% more people believe there will be more
outsourcing deals this year than last
32 TIME FOR CHANGE IN
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TIME FOR CHANGE IN
FACILITIES MANAGEMENT 33WHAT INDUSTRY DO
YOU OPERATE IN?
1.3% 3.5%
0.9%
EMERGENCY 6.6%
SERVICES CONSTRUCTION/
1.3%
CIVIL ENGINEERING
1.8%
PROPERTY & TRANSPORT
TELECOMMUNICATIONS REAL ESTATE
7% THIRD SECTOR 2.6%
0.4%
0.4%
LOCAL 2.2%
RETAIL
GOVERNMENT 4.8%
PHARMACEUTICALS FOOD & INDUSTRIAL
BEVERAGE
08
HEALTHCARE
4%
2.6%
ENERGY/
CENTRAL
GOVERNMENT
UTILTIES 7.9%
0.4%
Background
42.3%
0.9%
EDUCATION –
LEISURE/ HIGHER AND
TRAVEL FURTHER
data CHEMICALS
0.4%
0.9% AEROSPACE/ 6.6%
DEFENCE
MEDIA
FINANCIAL
2.6%
0.9%
1.8% SERVICES
EDUCATION – INFORMATION
FM CONSULTANCY /
MANUFACTURING SCHOOLS TECHNOLOGY
FM SERVICE PROVIDER
WHERE IS YOUR
ARE YOU A PUBLIC, PRIVATE OR ORGANISATION BASED?
THIRD SECTOR BUSINESS?
UNITED KINGDOM REST OF EUROPE
5% 4.4% SCOTLAND
4.8%
23%
THIRD SECTOR
227 NORTHERN
0.9% REST OF THE WORLD
IRELAND
14.1% NORTH
PUBLIC SECTOR MIDLANDS
TOTAL
6.6% 4.8% EAST
0.4%
72%
WALES ANGLIA 6.2%
37.0%
LONDON
17.6%
PRIVATE SECTOR SOUTH 3.1% SOUTH
WEST EAST
34 TIME FOR CHANGE IN
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TIME FOR CHANGE IN
FACILITIES MANAGEMENT 35WHICH AREA OF THE ORGANISATION HOW MANY PEOPLE WORK
DO YOU WORK IN? IN YOUR ORGANISATION?
15.5% 16.4%
PROPERTY/ESTATES
4%
MORE THAN 10,000
13.7% 1 - 20
7.5% PROCUREMENT
7.1%
11.5%
BID/ACCOUNT MANAGEMENT
5,000 – 9,999
14.6% 43.8% 21 - 100
COMMERCIAL/BUSINESS DEVELOPMENT
FACILITIES
22.1%
1,000 - 4,999 10.6% 101 - 250
0.9% 13.7%
FINANCE OTHER
9.7%
501 - 999
8.8% 251 - 500
WHAT LEVEL OF THE ORGANISATION WHAT IS YOUR ORGANISATIONS FACILITIES
DO YOU OPERATE AT? BUDGET FOR THE FINANCIAL YEAR?
1.3%
OPERATIONAL
3.1% OTHER
12%
£10M - £25M
5.3%
LINE MANAGEMENT
32.7%
SENIOR MANAGEMENT
8%
£51M - £100M
23%
LESS THAN £500K
25.2% 8%
MIDDLE MANAGEMENT
£25 - £50M
9%
£501K - £1M
12% 15%
32.3% OVER £100M
£1M - £3M
9%
DIRECTOR/PARTNER
£5M - £10M 7%
£3M - £5M
36 TIME FOR CHANGE IN
FACILITIES MANAGEMENT
TIME FOR CHANGE IN
FACILITIES MANAGEMENT 37ABOUT INTERSERVE
Every organisation needs a facilities management As a business we aim to embrace and complement our
partner that has the expertise to enhance its business customers’ operations and reputations through the
performance and brand. A partner that can focus application of our own experience and understanding.
relentlessly on service, cost and efficiency. We share our customers’ goals, mitigate their risk and
put their business needs at the heart of everything
No matter how demanding the environment or complex we do.
the requirement, Interserve is an expert in delivering
resilient and compliant facilities management. We work If you want to find out more about how Interserve can
with the full range of commercial businesses and public support you or about the findings of this research please
sector clients to develop bespoke facilities management contact us on:
and sustainable support services solutions that maximise
020 7902 2000
09
planned spending to deliver best value and drive real
services improvements. or email at
Interserve operates across the UK, Europe and the Middle
info.support@interserve.com
East, making the company a real force in corporate real or visit
www.interserve.com/support
Summary
estate partnership.
This research reveals a shift from a pure cost and service The report also rates longer term contracts (more than
level focus to a stronger emphasis on successful buyer- three years) as more preferable in 91% of cases in helping
partner relationships, with 90% of respondents requesting organisations achieve their objectives. Communication
new ideas to be offered by their suppliers during the (76%) and working together as a team (76%) were ranked
preparation and management of outsourced contracts. as the top areas for buyers and suppliers to improve
together.
At the same time, there is a discrepancy between what
buyers want in terms of contract innovation and how this Over the last few years the industry has been focused Interserve specifically partnered with Launched in July 1999 as the first source
is being measured. 68% of those engaged in innovation on taking out costs, but this year there has been a the Centre for Facilities Management of daily facilities management information
link it to their strategic objectives and 86% rank it as subtle shift to the need to start delivering services Development (CFMD) at Sheffield Hallam on the worldwide web, i-FM’s award-
important (the second highest ranking) when evaluating differently. Although people are still unwilling to put University to undertake this research. winning service has evolved with the
tenders or bids, but only 24% actually list it issues like innovation at the top of their priority list when Sheffield Hallam University is an academic market to meet the needs of a rapidly
as a requirement in their contracts. outsourcing, more and more it is being seen as a vital centre of excellence that applies the latest expanding and maturing sector. If you
part of service delivery. thinking to develop facilities management want to know about iFM int he UK, you
The objectives for outsourcing remain similar to 2012, knowledge, people and practice. won’t find a better online source.
with financial savings (72%), access to better technical The other significant trend in this year’s research is the
expertise (64%), transfer of risk (59%), access to best benefit of building longer term contracts. In 91% of cases www.shu.ac.uk/cfmd www.i-fm.net
practice (56.5%) and reduction of in-house staff (56%) longer term contracts provide more benefits than shorter
all scoring highly. term. For us, this is about building a partnership based
on the client’s strategic outcomes rather than focusing
However, while results from 2012 show that reducing just on the quick cost-cutting measures.
costs was more important than quality, this year’s report
predicts that value for money will come from a greater Overall the industry needs to work closer with its clients
emphasis on innovation, service quality and customer to develop the right relationships that deliver added
satisfaction. value and contribute to the long-term success of the
client’s business.
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