Bigger Isn’t Always Better: How FM Industry Changes Are Impacting Business

By: Rick Sung, Vice President of Sales

The facilities management (FM) market has seen unprecedented change in recent years as major players in the space merge to form even larger conglomerates. Industry analysts predict M&A activity will continue moving forward, begging the question: What is the catalyst for these shifts, and how will continued consolidation affect the industry?

More importantly: Is bigger always better, and does it lead to better outcomes for business owners and the customers they serve?

The pool of providers offering facilities services has evolved significantly in large part because the nature of FM itself has changed. FM, which was once seen as a purely tactical play, is developing a strategic edge. As more and more organizations recognize how FM—specifically, Integrated Facilities Management (IFM)—can create operational efficiencies and opportunities, the more they look to third-party partners for services and strategic support.

Finding the Right Fit for Your Organization

Several entities that operate in adjacent markets are starting to offer FM services with the goal of gaining new customers and/or grabbing existing contracts. Although this approach sounds good on paper, these massive providers tend to be the only ones reaping any benefits—they enjoy additional revenue streams and a stronger client portfolio while their customers often suffer from their lack of specialized expertise and more expensive operating models.

Bigger isn’t always better, and going with a company that has recently merged or that’s operating outside of their wheelhouse can have negative consequences for:

Quality and Control

When you hire someone to provide a service, whether it’s doing your taxes or cutting your lawn, you expect them to do a thorough job. The same goes for retailers seeking FM services—consistent, high-quality performance is at the top of the list of priorities, and if this expectation is not met, the rest of the engagement is likely to unravel.

Providers that simply tack FM services onto their existing business offerings typically don’t have the experience or know-how to provide truly exceptional support. A company whose services are rooted in real estate, for instance, is adept at managing tenant leasing activity and handling complaints, but optimizing an organization’s FM program from the ground up is simply not one of their core competencies. These entities are often more heavily staffed, which means you’ll pay more for their services without necessarily benefiting from gains in quality or service. 

When seeking an integrated facilities provider, opt for a company that specializes in holistic facilities management. The right FM partner will not only understand your business needs, they’ll understand the nuances of the industry as a whole.

Program Delivery

New technologies are changing the way many businesses operate, and FM is no exception. Some FM providers offer a tech platform or portal as part of their solution. These offerings can provide value if properly leveraged; however, technology alone cannot solve your problems—you need a human touch.

Look for an FM partner that is just that: a partner. Make sure they will provide not just the technology but the support and process improvement to elevate your current team’s effectiveness. Also keep an eye on costs—larger providers tend to charge more in order to support an inflated infrastructure, and these costs often get passed down to the customer. 

Consistency

Consistency is key for businesses that want to maintain a strong brand presence. Quality or service disruptions ultimately lead to a lack of consistency, which can harm the public’s perception of your brand. To preserve your organization’s identity, your facilities need to present a unified image to your customers, so they know what to expect when they walk through your doors.

FM providers that are new to the game, or that have recently merged or acquired another company, often have issues with change management. The risk for encountering potential disruption due to internal changes is high, as projects switch hands, leadership roles shift and services slip through the cracks. An experienced FM provider who has specialized in facilities services since their inception will be able to deliver consistent services with minimal disruption.

It’s no secret that if you want something done right, you should seek the guidance of a trusted expert. Experience and time in the field go a long way when it comes to generating results. To get the most out of your next FM partnership, find a vendor with a track record of quality service and skilled expertise who knows what success in the facilities industry looks like, and how to take you there.