Facilities Management Sector Fights Back With New Technology-Enabled Services

Throughout 2016 the facilities management (FM) sector has been buzzing with announcements of new technology initiatives and Internet-of-Things-led service offerings. Many of these are based on FM providers using technology to better streamline operations, as well as offer new services to customers around themes such as occupant comfort and smart buildings. This represents a break from traditional FM practices that have largely relied on using people to deliver services. This model has reached an impasse: witness the 39% drop in UK market leader Mitie’s share price over the last twelve months and departure of its CEO.

In terms of technology news, Carillion recently announced it will open an energy operations centre in December 2016 to centrally provide remote BMS monitoring and control, energy data management services and ongoing bureau support. This approach has been used effectively for many years by energy services specialists such as Matrix and Wipro EcoEnergy, who have leveraged centralized centres to remotely monitor and control energy consuming assets.  In June 2016, ISS announced it is partnering with IBM to leverage IBM’s Watson IoT platform alongside sensors embedded into buildings, so ISS can optimize its services and further its understanding of how people use buildings. Another big trend is to focus on comfort and wellbeing to raise staff productivity and reduce absences, for instance Mitie has developed an Intelligent Buildings Solution, which it is trialing at the Red Bull Racing factory to optimize variables such as air quality, light levels and humidity to improve worker environments.

As market conditions in FM remain tough – with low margins, continuing pressure on contract prices and pressure from cost cuts in local government amongst others - it is unsurprising large providers are looking at how to develop more value adding relationships with customers. The hope is that technology-driven services offer FM providers opportunities to win business that has fatter profit margins than traditional commoditized FM services. While over the long term some of these newly found cost savings will be competed away through lower prices, in the short term the savings generated will enable providers to beat the benchmarks in their contracts and grow profits. The challenge is not likely to be on the technology side. FM firms will need to work hard at challenging exiting rigid contracts frameworks to break into discussions on improving facility and staff performance.

For more insights on facilities optimization strategies, see our report Facilities Optimization Management Emerges As A New Vision For Optimizing Building Portfolios.