A Pillar for Real Estate Business
What is Facility Management (FM)?’ is a question that is often asked by buildingowners and occupiers as well as professionals in the property industry. Well,here are some definitions gathered from my various working experience with Premium Developers, who made the luxury condominiums and retail mart, and commercial complexes:
- All services required for the management of buildings and real estate tomaintain and increase their value.
- The means of providing maintenance support, project management and usermanagement during the building life cycle.
- The integration of multi-disciplinary activities within the built environment andthe management of their impact upon people and the workplace.
All these definitions are correct; essentially Facility Management or FacilitiesManagement as it is commonly called in the world is quite simply the managementof buildings and services. This sounds suspiciously close to PropertyManagement (PM) and of course so it should as FM developed from PM and thetwo are fundamentally linked. However, FM has a much wider definition thantraditional PM services.
The International Facility Management Association (IFMA), the World’s leadingFM professional body, defines FM as, ‘A profession that encompasses multipledisciplines to ensure functionality of the built environment by integrating people,place,process and technology.’ That sounds a bit long winded, but it accuratelyidentifies the management of multi-disciplines through “[MMTP]” Man,Machine,Technologyand Process.
Typically, FM might be split into two (2) areas of ‘hard’ and ‘soft’ services. The hardservices relate to the actual fabric and building systems and might also beconsidered as the more traditional PM services. These include:
|Building fabric maintenance||Air conditioning maintenance|
|Decoration & refurbishment||Lift & escalator maintenance|
|M & E plant maintenance||Fire & safety system maintenance|
|Plumbing & drainage||Minor project management|
|Soft services could include:|
|Handyman services||Grounds maintenance|
|Waste disposal||Internal plants|
|Possession management||Handing over management|
|Additional services might also include:|
|Move in & Move out management||Utility management|
|Pace planning||Space management|
|Business continuity planning||Business risk assessment|
|Vehicle fleet management||Contract procurement|
|Performance management||Environmental management|
|Complaint / Grievance redressal||Health & Safety advice|
Traditionally FM has been provided in-house by a FM, Property or Corporate Services department and depending on the size of the condominium/complex and the scope of services are the in-house department could range from a few janitorial employees to a multi-disciplined team managing technical, security and cleaning staff.
In India since the 2006’s the trend has been for organizations to concentrate on their core business and hence consider outsourcing support services which of course includes all FM services. This outsourcing trend was lead by the US with Europe lagging approximately 5 to 10 years. In the last 5 years outsourcing of FM has become more common in SE Asia with Hong Kong being an early innovator particularly in the financial services sector.
The FM market is still immature in in India, but the potential is enormous particularly with the large economic growth rate and amount of property development. Major FM companies in India include Jones Lang Lasalle, CBRE, Cushman Weikfield, and of course manyIndian local players. Many of these companies and similar FM providers began by offering the traditional PM services by managing service contracts on behalf of their clients. Now the leading FM companies are able to deliver a much wider range of services via their own resources or through a partnered supply chain.
Typically, there are five models for delivering FM services. These are:
In-house FM department.
Here the organization has its own dedicated management team and in-house employees to deliver all FM services. Some specialist services, where there is no expertise in the company, will be outsourced to simple service contracts. These might include areas like lift and escalator maintenance. This arrangement is often found in public sector and educational organizations.
Out-tasked service contracts
This is where an organization has an in-house team of FM professionals whoprocure and manage a series of outsourced contracts. There may be a smallteam of in-house non-management staff such as maintenance technicians to runhigh risk operations or maintain vital M&E plant.
Outsourced managing agent FM contract
In this scenario the organization will outsource most or all services on contracts and will appoint a FM company as managing agent to manage these contracts on their behalf. Here the service contracts are between the client organization and the service providers. The client organization is responsible for procurement and the FM managing agent will manage performance. Although the FM services are outsourced the client organization must maintain in-house the knowledge and skill to procure and understand the delivery of FM services. This is sometimes referred to as an ‘intelligent client’ function. To co-ordinate services requests and collate data to manage performance it is usual to provide a centralized call center which will operate on some form of service management software. The call center can be provided by the FM company, a third party or the client organization.
Outsourced managing contractor FM contract Structurally this is similar to outsourcing on a managing agent contract but a step further whereby the FM supplier will deliver services to the client organization through a mixture of their
own resources and a series of sub-contracts. The client organization only has a single contract with the FM supplier. The FM supplier develops their own supply chain and manages the risk of service delivery across all services. The diagram below can depict either the managing agent or managing contractor options. The dotted lines would represent the contract relationships between the client organization and the various service providers in the managing agent option.
Total Facility Management (TFM) contract
This is a development on the managing contractor option whereby the FM supplier will, through strategic partnerships, joint ventures, subsidiary companies or in-house resources, deliver all or at least most FM services to the client organization. Thus, they will provide a total FM solution or ‘one stop shop’. Many best practice FM companies aspire to deliver a TFM solution to clients where possible.
FM has now grown into an industry in its own right and Facility Managers can now gain academic qualifications from a number of leading institutions in India, like (Amity University), Private University a local leading example. A few bodies planned to provide professional qualifications and support to the industry such as Indian Facility Management Association.
In summary FM is a vital element in supporting any organisation in carrying out its core business, whatever that may be, by providing a safe and effective environment in which to operate. Experts like JLL, CBRE along with many local players are leading the industry in India by improving FM systems and processes and developing FM service delivery for the future.