Cost optimization - leveraging technology to maintain margins for FM firms
In the recent years, we have seen a rise, repercussions, and dissemination to some extent of work from home or remote working strategies. While some experts are still arguing on the long-lasting effects of WFH, one thing is absolutely clear that the paranoia of working in shared or office spaces is still haunting the property owners and facility management teams.
Facility management companies are facing cost pressures due to softening operating fundamentals such as a significant drop in rental income and occupancies. According to a Deloitte survey of 200 plus facility management stakeholders, respondents plan to reduce operating costs by 20% on average and try to optimize operational costs using technology to reposition space and for facilities management to improve operational resilience.
In this blog, we are trying to analyze a few effective cost-cutting techniques recommended by leading facility management stakeholders.
Navigating Cost Challenges: Insights from Industry Leaders
1. Choosing the Right Technology Stack
We all must have come across articles and discussions during the recent technology conferences that this is a golden time to invest in the right technology stack or reposition FM’s investment portfolio. We have seen how building automation and remote monitoring has played a role during the pandemic. But despite all of that we also have to understand that a lot of digital transformation decisions that were taken before the pandemic were proved ineffective during the pandemic. Decisions that were ad hoc in nature and limited to a tenant-facing infrastructure only.
Now when the investment budget has shrunken and the pressure of cost-cutting majors has taken a toll on facility management teams, selecting or investing in the right technology has become even more critical.
2. Leverage IoT to gain a competitive edge
Louis Vermorel, CEO of Whattsense, advocates for adopting Internet of Things (IoT) solutions to enhance facility connectivity. According to Vermorel, "The increasing concern with energy waste, pollution, and utility costs, combined with the higher expectations from tenants, creates enormous pressure on facility management companies and their capital expenditure.”
He suggests, adoption of IoT solutions to improve the connectivity of a facility is a significant opportunity for FM companies to reduce costs. It helps ease the operations and maintenance process and also opens the scope of services available to building owners. This way FM companies can create their own capabilities leveraging the technology to get a competitive edge and fulfill customers’ needs.
3. Embracing Predictive Analytics
- Changing/adjusting your maintenance strategy
- Taking advantage of an appropriate maintenance software
He strongly recommends that it’s a time to prioritize predictive maintenance over preventive maintenance. Moreover, if you have the basic asset and operational data at your disposal, want more control and insight about your assets and are trying to create a holistic facility-wide maintenance strategy that will last longer then you should invest in a predictive maintenance strategy.
4. Integrating Digital Solutions into Service Delivery Model
In one of the sessions, xempla had during the RE.Connect event with Paul Bogan, CDO of SERCO, he highlighted that trend that the clients don’t just want facility management services, they want to understand how they can use their data to drive extended economical benefits, and they want better certainty where the CAPEX and OPEX should be in next 3-5 years.
This transparency and accessibility to operational data as well as users’ behavioral data should come or rather should be offered by facility management teams. FM should make it a part of the services delivery model.
Anand Kumar Sinha, CIO of OCS group, echoes this sentiment, asserting that for facility management companies, integrating digital solutions into their delivery model is crucial for differentiation and effective competition.
Adapting and thriving in the changing FM landscape
In the current landscape, facility management teams must employ innovative strategies to remain lean and competitive. Whether it's embracing IoT for enhanced connectivity, prioritizing predictive analytics, or integrating digital solutions into service delivery, the path to operational efficiency involves leveraging technology effectively. As the world evolves, FM firms that adapt and implement these strategies will not only weather the challenges but also emerge stronger and more resilient in an ever-changing environment.
One of the promising strategy is to implement asset performance management application. It will allow operation and maintenance teams to manage the expenses better, take efforts to support the budget cuts and also bring sustainability in Facilities Management. By identifying abnormal behavior of the asset, facility managers can quickly take repair or replace decisions as well as carry out budgeting analysis using the maintenance data.
What are the hacks your facility management team is applying to stay lean and competitive in the current scenario?