The end of FM?

As many new FM service providers potentially flood the market, it is important to consider whether FM is still the same concept it used to be a decade ago. ‘Outsourcing’ was certainly the buzz in the region then, but is it still?

I believe that effective FM is no longer about sorting out the day-to-day client issues. That is easy. Repairing equipment and facilities on an ad-hoc basis or when required, has a very short-term focus, and what we really need to ask is whether it can meet the client’s long-term needs. I would challenge that FM, as we currently view it in the region, is not fulfilling a long-term goal for the future.

Of course, we read about FM companies expanding, and I am sure some are growing exponentially, but are these service providers nimble enough to lead their customers, or are they just following their customers to provide the cheapest price at any cost?

Digital solutions can provide all the performance monitoring and the condition status of the overall asset while AI can identify how to increase the lifespan of the asset, thereby allowing asset owners to spend their time focusing on how to maximise the current and future value of that asset. This would be in multiple facets, from the occupier’s experience to financial return on investment. Aside from the latest technology, we must consider what we already know. What do we see in the big picture, and how does this impact asset management, especially as there are always a few curveballs?

With many countries looking to move towards low carbon-based economies, the UAE has joined this global trend by committing to reduce its energy consumption by 30% by 2030. The initiative was actually announced in 2015, yet surprisingly only a few major asset owners have understood the real impact of this commitment.

Taking an extract from an article published in 2015, it is surprising how few companies have actually understood the issue. “Some people still prioritise short-term gain without understanding how global megatrends will affect these gains in the coming years. But the science and economics of global warming tell us we need to shift towards a green economy to catalyse growth and ensure resilience in the future, and [the UAE] is making efforts to do this. Real estate developments that are not demonstrably ‘green’ are losing out in terms of how quickly they sell and the values they command.”

For the nation as a whole to achieve a 30% reduction, in simple terms it means that everyone must reduce their consumption of energy proportionally. Inevitably constraint and control will have to be implemented to achieve this commitment, and I believe that it should be at the forefront of all asset owners and manager’s actions.

Also, with the forthcoming energy rating of buildings, potential buyers or tenants will have a transparent view of the energy performance of buildings, which will give them the option to choose the most energy-efficient and cost-efficient building to live or work in.
For this reason, assets that don’t perform, or in some way meet the requirements, are going to fall in relative value. Putting this in context of the current view of FM where focusing on the cheapest price seems to be the norm, while putting off dealing with tomorrow, the outcome is obvious. When regulations are issued, there will be a mad rush to comply, which in real terms will ultimately cost more.

I firmly believe that we need to be ten steps ahead in doing work for the future today, so we are ready for tomorrow. Service and solution partners that can help asset owners achieve a low-carbon asset operation, adding significantly to the sustainability of the built asset, will help to set it apart and add long-term value. It’s definitely time for a ‘greener’ new world and an FM model more focused on the future.

Author: Ian Harfield, EVP ENGIE Solutions, Middle East, South & Central Asia and Turkey