What do organisations really want from their Facilities Management suppliers?

17 March 2017

I am passionate about the Facilities Management (FM) industry and proud of what FM does. But I do want to raise standards. Companies should buy and manage FM better and suppliers ought to sell and deliver it better. The industry is changing.  Contracts are getting larger and more commercially complex, there is a higher level of risk transfer and new technology such as the internet of things, artificial intelligence, robotics and blockchain which are beginning to have an impact.  More problems and disputes are also emerging, for example a recent £1m plus dispute about who was responsible for the cost lighting repairs, when more than one bulb needed replacing!  A consistent theme is trust, with more needed between companies and suppliers. Mutual understanding of what companies and their suppliers are looking for should be an enabler of trust - but what do organisations really want?

There is a perception in the FM industry that it’s all about the money. It doesn’t matter how strong the relationship with the company is or how much quality or added value they bring to the table, it always comes down to the cash.

This is often true, at least in part.  But when companies ask for savings, what do they actually mean?  Is it a reduction in price in the current financial year or is it the total Net Present Value price over the term of the contract, or a mixture of the two?  Others are more concerned about lifecycle cost, cost certainty or risk transfer. My clients often get very nervous about low costs, wondering what’s the catch? What have they missed?

I worked with one where a FM supplier had promised savings of up to 20% and my client was sceptical as they just couldn’t see where these savings were coming from. We were able to draw out from the supplier how they would do it: the new technology, systems and processes that they were planning to deploy and how they related to the savings.

I have had some organisations tell me that they are concerned that when FM suppliers receive a request for proposal, they sit in a darkened room plotting clever ways to cut corners and to increase profits. Companies have a fear of being taken advantage of and there are many examples about sharp practices. Greater transparency from suppliers could really help to restore trust.

Businesses don’t always know exactly what they want, sometimes there is confusion at the strategic level and or at the detailed level. For companies to determine the services they need at a detailed level is not easy, it’s a lot of work, requires a lot of debate and lots of supporting data.

I know FM suppliers are often concerned about asking too many questions as they don’t want to be seen as the ‘awkward squad’. But companies want some guidance about what others typically want, to show them what is possible, to point out any errors, omissions, contradictions or ambiguities.  

Companies invest a lot of time and effort on a procurement, they risk their personal reputation on choosing their supplier and so want to be proud of the supplier that they have chosen.

So to sum up, companies want someone they can trust to employ and manage a range of skilled and semi-skilled people who get things done to the required standard, keep things working and keep their staff, visitors and customers happy. They also generally want it done cheaper and better than before, and with some added value. Companies want their suppliers to make them look good.

Businesses also want suppliers to understand their objectives and requirements, to know how their business operates, and to fit in with their culture. They want FM suppliers to be transparent, to be ethical and to work collaboratively with them. They want a trusted relationship.

If you'd like to discuss any of the issues I've raised here in further detail please do get in touch.

Derrick Tate | Director, Corporate Finance
Profile | Email +44 (0) 20 7212 1465

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