11 November 2019
Facilities Matters asks a number of thought leaders and experts from across FM for their predictions on what 2020 has in store for the industry...
“2020 could see us slip into recession”
Rory Murphy FRICS, commercial director at VINCI FACILITIES and board director of the IFMA UK Chapter
Hopes and fears for 2020
The FM industry as with any other part of our economy will wish for a more stable and certain year in 2020 than we have had in 2019. The political and economic outlook has loomed large over the FM sector as well as those public and private sector customers that we support. Uncertainty results in lack of investment and the continued malaise, coincided with a downturn in the European economy more generally, means that 2020 could see us slip into recession.
I hope the industry continues to demonstrate the value it can add as opposed to the costs it can reduce. In terms of professional enhancement, I want the industry to be a career of choice for school leavers and graduates and a welcoming, diverse and inclusive environment for anyone that wants to choose FM as a career at any stage of their working life.
Professionalising our sector must remain a focus so the development of clear standards for measurement, procurement, business responsibility, competency and ethics, to name but a few, should be something given sector-wide focus.
Solutions & trends
Continuing cost pressures will mean that the drive to develop better property technology and data driven solutions will be a necessity as productivity and efficiency of both physical assets and people come into sharp focus. There has been much talk over the last couple of years regarding the operation of the built environment and the engagement of employees and this will increase as the impact of ‘places’ becomes better understood.
Next year may be a breakthrough year for automation and, with the development of artificial intelligence and robotics, this may be the year that chatbots, robots, and virtual assistants become more prevalent.
2020 will see innovation in service delivery from an environmental perspective with a strong focus on the reduction of single use plastics, waste in general and the increased attention to the environmental impacts of various materials, chemicals or physical equipment.
There will be a growing demand to demonstrate the delivery of social value and a necessity to support social cohesion which our profession is best placed to address. The diverse nature of the services we deliver means that we would be able to support employment and development across a variety of roles. The requirement to deliver more locally will also mean the greater use of SMEs and 2020 will also see a rise in the use of social enterprises in the sector.
The diverse nature of the facilities management sector has always made industry wide collaborations very difficult as the supplier base is incredibly varied both in size and scale as well as professional discipline or heritage. The professional institutions have a role to play in developing and enhancing the sector as well as driving up standards. The RICS/IFMA collaboration within the UK is a positive step and through working together and sharing knowledge across both the national and international arena this collaboration has undoubtedly raised the profile of facilities management as a career of choice.
"FM as an industry will take a much higher profile with governments and organisations such as the UN"
Paul Bagust, global property standards director, RICS
Hopes for 2020
I hope that the industry continues to build on the progress it has made in recent years, to reflect the real value it adds to business and wider society. I hope for FM to continue to be seen as a leader in ethical values and sustainable business.
Challenges & solutions
It may become a challenge for the industry to really demonstrate that it can meet the challenges around social and environmental issues at a global level.
We have to move to a more collaborative approach to delivering services. We need a more transparent approach to procurement, and clients and service providers working together and truly collaborating to develop coherent and impactful solutions at a strategic level.
There will be a growth in the expectation and understanding that buildings that are high performing add value in many ways. Furthermore, in order to have a high performing building and a high performing workforce an investment in a professional FM service solution is essential.
My other prediction is that FM as an industry will take a much higher profile with governments and organisations such as the UN on the role the built environment plays in global issues relating to the circular economy, environmental performance and social value.
“As millennials join the workforce we must embrace the more self-help orientated culture they are accustomed to”
Steve McGregor, group MD, DMA Group
Hopes for 2020
My biggest hope for 2020 is that the FM industry fully embraces the transformational capabilities of the niche, best-in-class supplier.
As customer procurement behaviour marks a crucial move away from the large construction conglomerate that has dominated and stagnated the market for so long, small, customer-focused suppliers are now poised to deliver. With technology as the catalyst, today’s niche suppliers are more connected, collaborative and disruptive than ever before.
Challenges & solutions
To deliver optimal service and cost efficiencies, suppliers must keep up with the relentless march of technology at every level of delivery.
One challenge we must meet is the growing need for industry-wide technological standards to support this best-of-breed model, setting the bar high for best practice, connectivity and innovation across the market. Creation of enhanced industry tools and forums to assist SME providers in their digital transformation goes together with this.
As millennials join the workforce we must embrace the more self-help orientated culture they are accustomed to. Suppliers must utilise the latest cloud technologies to provide customers with instant 24/7 access to rich data, services and resources. And whilst the ‘human touch’ and real customer service will never lose its place, the future workforce is already demanding automated and easier access to the services and solutions we provide.
To create the intelligent, ‘living’ buildings of the future, all parties must embrace digital transformation, and this relies upon collaboration between customers and service providers. A solid starting point is for the industry to get better at sharing best practice and success stories to help move the market forward.
To keep pace with technological change, we must adopt agile, cloud-based open protocol technologies and relegate the ‘bigger is better’ closed legacy systems. And for business health, longevity and trust, risks and reward must be shared throughout the entire supply chain.
In the building maintenance space, handheld technology with software that integrates the entire supply chain and the customer is really taking off as customers increasingly demand greater efficiency and transparency. In the case of new apps, the customer and engineer are now in direct contact, data is instantly shared between parties, and information can be accessed anytime, anywhere. Together with this, we see the potential for a few top suppliers providing free to use ‘software-as-a service’ property service systems to overtake outdated CAFM systems in the future.
Tech & Support Services:
“Facilities contracts are focusing more on smart maintenance initiatives and use of data to drive results”
Paul Bullard, business strategy director, FSI
Hopes for 2020
The dawn of a new decade always brings with it some excitement in terms of new technological advances that will be seen. Taking into consideration today’s uncertain economic situation, in order to thrive the facilities management industry will embrace technology unlike ever before. Whereas there has been mainstream reluctance to adopt new opportunities that challenge the traditional facility delivery model, these will become the tools to drive efficiencies, profitability and great customer experience.
As ever the challenge will be expertise within an organisation to realise the actual benefits of the technology. On a simple level having a product champion who can make magic happen with the CAFM system can be invaluable. Much has been discussed around the topic of data scientists who can analyse data and create algorithms to determine trends and insights. However, it is now appreciated that without specific industry context thrown into the mix the value of these insights is questionable.
There is already a growing trend of companies looking to "make the best of what they have". This is common during any period of downturn. In this age of analytics and big data the most valuable commodity an organisation possesses is their asset database. If the industry rather than being protective could allow all sources of data to be combined, then we could achieve really effective and informed benchmarking. Now a technical possibility this has been the holy grail of the industry since its beginnings.
The way organisations look at and use data has the potential to completely revolutionise the industry. A significant change will be in the way facilities contracts are provisioned. We are already seeing a step change from the traditional planned maintenance based contracts to those focusing more on smart maintenance initiatives and use of data to drive results. To support this facilities companies will become more enthusiastic towards the use of Internet of Things (IoT) sensors as a serious option in their service delivery.
Apps for the users of facilities will continue to thrive, especially with artificial intelligence becoming much more prevalent in their make up. Virtual personal assistance within these apps will provide considerable automation during a daily journey within the workplace creating a great end user experience.
“It’s important to pre-empt and plan for potential civil unrest in the wake of this summer’s surge in social activism”
Mark Rogers, director, Corps Security
We can’t ignore Brexit. Whatever your stance, it’s going to impact the availability of good labour. The euro-to-pound conversion is not that high right now, which means there is less incentive to find work here.
On top of that, we have the challenge of increasing hourly rates. Wages are rising by circa 5% each year. That’s not a problem in itself – people should be paid well, but it’s a problem because security costs don’t always keep track of wage increases and service providers don’t always forecast for it.
Our customers are under more pressure and they’re feeling the pinch, just like the services industry. Security providers have to find a way of offering a great service at the best value that takes account of perceived risk and long term resilience.
From what we’re seeing, customers still want security presence – but they want it when it counts. This has triggered a desire for technology to be integrated into the security service, a blend of manned guarding and monitoring. Technology costs are going down and labour costs are going up, so it makes sense to create a hybrid solution that offers the best of both worlds. Security is paramount, of course, but moving to a blended way of doing things can make the most of the budget and help everyone work smarter to achieve great results.
Technology, and the rate at which it is developing, will pave the way into 2020 and beyond. Front of house will play an important part in manned guarding provisions, too. Security officers are now expected to double up as brand ambassadors.
From a security perspective, we also need to take heed of evolving threats. Terrorism has changed. Hire vehicles have replaced bombs as the weapons of choice. This requires a whole new approach and monitoring practice.
It’s important to pre-empt and plan for potential civil unrest in the wake of this summer’s surge in social activism, for example, the Brexit protests and Extinction Rebellion marches, which could spiral into something bigger. It’s not about being cynical or sensationalist. It’s about being mindful of the complexities in our current society.
Facial recognition technology could be even more of a hot topic in 2020. Much of the recent press coverage has concerned the ‘grey areas’, namely ethics, privacy and usage. This needs to be addressed so there are clearer terms under which it can be used that protects both the location in question, and the people involved.
FM service delivery model:
“We’ve seen an increased appetite to get more SMEs into the supply chain”
Mark Sutcliffe, managing director of the Integrator, KBR
Challenges & solutions
There’s a lot of debate right now about insourcing versus outsourcing. The high-profile collapse of Carillion and other large corporates experiencing financial difficulty has led to many considering if insourcing is the answer. The truth is that the best FM models will likely use a mix of both. While insourcing certainly has its benefits, such as alignment of teams and company culture, outsourcing also has plenty to offer. Outside suppliers are often experts in their field and bring a higher level of specialisation that an in-house team can offer. The challenge for FM models will be to provide a platform that allows a business to easily manage both in-house teams and suppliers through a single point of contact.
Models such as the Integrator achieve this by being an impartial and independent platform. Data, reporting, compliance and more is all handled through the Integrator, ensuring a uniformity in management. The model remains impartial as the operating company does not supply any of the services.
Communication is also key if FM professionals are to stay on top of industry issues. The best results are achieved when people from across FM are engaging with each other, sharing best practice and learning from one another, for example through industry events, webinars and roundtables. Nothing can compare to actually meeting people face-to-face and spending quality time together.
We’ve seen an increased appetite in recent years to get more SMEs into the supply chain. This has been driven in part by the government setting a target of spending 33 per cent of all procurement with small businesses by 2022. The private sector is also seeing the benefits that SMEs can bring which is why I expect this to be a trend to look out for in 2020 and beyond. This will be aided in the public sector by the government simplifying the tender process, and across all sectors by FM models supporting SMEs throughout the duration of a contract.
There is also a growing trend in social value being incorporated into bids. This often takes the form of a client asking what the provider will bring in social value offerings / innovation. This is being scored as part of bid assessment with the weighting of the social value bid responses varying from 5 per cent to 20 per cent of the overall score / assessment of the bid. This trend will continue across public and private sector FM in 2020.
“Plant based menus will continue to be a strong trend”
Henry Watts, MD catering, Angel Hill Food Co, an Atalian Servest company
Hopes for 2020
Our hopes are that the industry continues to adapt to changes within the marketplace, driving consumer choice, quality and standards reflecting the changing face of the workplace. It’s important that FM recognises that it is essentially a people business, and that investment in teams – and maintaining and developing the skills within it – will ensure the sector continues to grow within a changing market for the long term.
The uncertainty around Brexit continues to inhibit internal investment into services from certain clients. Within Angel Hill, we focus on retention of our existing workforce by implementing strong development pathways so that people can make a career within all of the different areas of our business. We focus on developing craft skills within our chef teams, ensuring that our people maintain their passion for all things food.
In addition, the flexible working trend impacts the services required and the way they are delivered, as the historical ‘norms’ attached to ‘peak’ service times, ‘available time’, etc., will undoubtedly change, meaning that services have to adapt to accommodate these whilst maintaining quality and variety.
The industry can best address the issues it faces by agreeing certain directions of travel in relation to common challenges, such as the focus on single-use plastic removal / reduction from the supply chain. If the industry spoke with a single voice about these areas then the supply chain would catch up and create the solutions required, making them less cost prohibitive, which in turn would have a positive impact upon the development of appropriate waste streams.
Plant based menus will continue to be a strong trend, with 1 in 8 people choosing to follow a vegetarian or vegan diet. Dish development in these areas is making plant based diets and dishes much more accessible to the wider population. Street food, theatre cooking and global dishes will also continue to be strong in the market reflecting the trends in the wider food market. Technology will also continue to develop, with pre-ordering, self service check-outs and targeted ‘push’ marketing through Apps growing in popularity.
“Robotic vacuum cleaners have proven successful in a wide range of different buildings”
Paul Ashton, CEO, Birkin Cleaning Services
Hopes for 2020
In these uncertain times, it is important for the industry to do what it does best and keep the wheels of industry turning. In the middle of difficulty lies opportunity and this is particularly true for our industry. We should focus on the future, embracing change and identify how we can attract talent to lead our industry in the future. Innovation and technology are changing the landscape forever, faster than ever before – my hope is that we all make the most of the opportunity and continue to succeed.
Challenges & solutions
Regardless of what happens politically with Brexit over the next 12 months, the likely impact for us will be on the labour market as some of our EU registered citizens face a weakening pound and increased administration to remain within the UK.
There are questions over the impact on the supply chain as many EU based suppliers have already increased their prices but this is likely to continue. Most suppliers in the UK who source from the EU are stockpiling parts and materials but the question over how we will trade post-Brexit remains unanswered. As a business, there has been no better time to have a plan A, B and C to tackle potential challenges resulting from the current political situation. Birkin have been working closely with their key suppliers for the last two years to ensure we have contingency plans for our contingency plans.
Whilst most clients understand that we as a country are in uncharted waters, it isn't as simple as just passing the costs straight on. Therefore, the entrepreneurial businesses have the opportunity to stand out by using their experience to provide alternative solutions such as implementing technology and/or equipment to improve productivity and demonstrate value.
Birkin have seen increased appetite from clients across multiple sectors keen to explore the cost/benefit analysis of adopting robotics. Robotic vacuum cleaners have proven successful in a wide range of different buildings by facilitating improved productivity levels whilst allowing the team to focus on detail work.
Sustainability and impact on the environment continue to become a key buying factor for all clients as they become ever more conscious about engaging with responsible businesses who are playing their part in doing the right thing. Reducing plastic, chemical, water and energy usage is therefore driving clients towards aqueous ozone cleaning systems (chemical-free cleaners and sanitisers that are made onsite and which therefore do not need to be stored in plastic containers or delivered).