From single service to integrated model

Cleaning was typically procured as a single service from specialist cleaning companies. But over the past ten years organisations have been increasingly buying it as part of a bundled or integrated facilities management (FM) package. This might include security, maintenance, catering, landscaping and pest control and other more specialist services. According to market research specialist MTW Research, multi-service FM has grown to more than 30 per cent of the UK FM market in 2013, a substantial increase from previous years. 

Retail giant Tesco is a prime example of this trend. Tesco procures a wide range of services from Servest for around 450 stores, 35 distribution centres and 14 head offices across the country. All of this springs from a contract signed in 2008 to provide cleaning services to one Tesco distribution centre and a contract signed a year earlier between Tesco and 7 Day Catering (now part of the Servest Group) to provide catering at six distribution centres. Tesco has gradually procured more services, and added more sites into the relationship. Around 3,200 Servest employees now work on the contract.

This shift from single service to an integrated model looks set to continue. Research by Sheffield Hallam University and support services company Interserve points to the FM market being fundamentally different in five years. Thirty-five per cent (the majority) of respondents predicted a continued pattern of outsourcing increasingly led by a few multi-service providers. 

Some suggest this isn’t necessarily good news. The MTW Research report points to clients experiencing a growing level of disillusionment with some bundled FM service providers. Some say that they can get better service levels at similar prices through single-service contracts.

Bringing expertise to multi-service FM

It’s true that standards vary across FM providers. FM firms are generally established and known for a particular service line. Then they develop additional support service lines in order to have a FM offering. So you may have a cleaning company, well established as such, that decides to provide catering and security to support the FM market.

In this instance, the service provider is only truly an expert in the original service line. We’re different. We were a market leader in cleaning and our acquisition strategy has been to identify market leaders and specialists in the other service skills. So, rather than being master of none and jack of all, Servest’s acquisition strategy has allowed us to become master of all. Over the past couple of years, the firm has acquired leading catering, maintenance and security businesses, for example. 

Recently Servest won a three-year contract with food company McCain to provide cleaning, catering and security services to its Scarborough site. To best fulfil the contract, Servest has provided training for employees so that they are now all multi-skilled, which is more efficient. People can understudy each other and step into other roles to cover holidays for example. More flexible resources potentially lead to economic benefits and a more efficient specification.

There is also now an FM manager on site who is the single point of contact for the client across the three services. This is more efficient for the client, who no longer needs to engage in a paper or telephone chase to find management leads for various services.

McCain also now benefits from having a standard culture and standard processes and procedures across the service lines. This is much more transparent and ensures that the client can easily measure our performance. And on the quantitative side there are benefits since it provides the potential to have a flatter management line at the top of the contract. All of which makes for a happy client, who has seen costs fall and standards rise.