Table of Contents
- What is Service Management?
- What is Facility Service Management?
- Facility Services are expanding in scope
- Demands on facility service providers are growing in complexity
- Single service delivery
- Bundled services delivery
- Integrated Facility Management
- Design Build Finance Maintain Operate
- Service Level Agreements
- Service delivery process
- Upgrade Facility Service delivery with a Facility Services Management solution
What is Service Management?
Service management is a business concept originating from the B2B (Business to Business) industry. It is aimed at improving overall customer service, optimising service delivery and ensuring the rapid introduction of new services. In addition to the B2B and now B2C (Business to Consumer) industries that apply service management, the Facility Service Management profession has also embraced this concept.
What is Facility Service Management?
Facility Service Management is the practice of providing facility services, such as planned or condition-based maintenance, security, cleaning, and workspace management to an organisation. These services aim to improve the performance, well-being, and efficiency of individuals working within that organisation so that they can focus on their core business activities.
Successful service delivery starts with understanding and validating ever-changing client needs in relation to their organisation's strategy. This allows service managers to develop and deliver business services that boost workforce productivity, and increase employee satisfaction and customer engagement. An efficient and flexible service model ensures the best value for money and maximum flexibility in the sourcing strategy. It is a growing world-wide trend that Facility Services are outsourced to a service provider.
‘According to Verdantix, 60% of client organisations find occupant satisfaction with facilities an essential influential business objective in their outsourcing strategy.’
When taking on an outsourcing contract, the FM service provider must consider two important stakeholders, the customer organisation with which the contract has been concluded and the consumer of the services so that he or she can concentrate on their primary work. This is often referred to as B2B2C (Business to Business to Consumer).
Facility Services are expanding in scope
To understand the term ‘facility service management’ it is important to first define facility services. These are often divided up into Hard Services (Hard FM), Soft Services (Soft FM) and Real Estate Services.
The ‘Hard Services’ domain contains services that are more oriented to building operation and maintenance (O&M) such as: Heating Ventilation and Air Conditioning (HVAC), Mechanical and Electrical (M&E), plumbing, building fabric maintenance, fire safety services, and telecoms.
The ‘Soft Services’ domain ensures that buildings are secure and provide an enjoyable experience. This domain includes services such as: cleaning, laundry, catering, vending, security, landscaping, post management, waste management, and hospitality services.
'Real Estate Services’ often refer to: space planning and design, relocation management, property acquisitions and disposals, and energy management services.
Real Estate Services
- Heating Ventilation and Air Conditioning (HVAC)
- Mechanical and Electrical (M&E)
- Building fabric maintenance
- Fire safety services
- Post Management
- Waste Management
- Hospitality services
- Space planning and design
- Relocation management
- Property acquisitions and disposals
- Energy management services
Figure 1: Facility services Segmentation
Demands on facility service providers are growing in complexity
Worldwide, approximately 50% of facility services are outsourced to service providers who are responsible for the coordination and delivery of these services. For clients, aspects such as value for money, service quality, transparency in performance reporting and contract compliance, correct billing, and how the contractors understand the core business of the client contribute towards determining the best outsourcing strategy. Historically, outsourcing of facility services was only focused on a specific type of service such as HVAC or lift maintenance. Nowadays many organisations often outsource multiple services to one service provider under an Integrated Facility Management strategy.
According to market research company, Frost & Sullivan, the global Integrated Facility Management (IFM) market was valued at $92.05 billion in 2019 and is expected to grow at a compound annual growth rate (CAGR) of 6.1% between 2019 and 2026 to reach $139.39 billion in 2026.
However, there are several outsourcing models available when providing facility services management. Below you can find the most commonly used models.
Single service delivery
In a single service model, activities such as HVAC maintenance or cleaning are outsourced to different service providers. This results in organisations having to source and manage multiple FM service providers. While this provides firms with the opportunity to outsource to specialists, it is often a less efficient approach. It is hard to create synergy between services, and can be time consuming for the client to manage all the related contracts for different vendors. For that reason, many organisations have moved away from this type of outsourcing, unless the services are reserved for specialists such as a lift services specialist.
Bundled services delivery
When a provider bundles multiple services together in a ceontract to a customer, often the split in the service package offered is between Hard, Soft and Real Estate Services. The contractors offer a single point of contact for the bundled services towards multiple client organisations. The customer itself is still responsible for the FM service provisioning and has a strong influence on which, when and how services are delivered.
Integrated Facility Management
To increase the quality, accessibility and efficiency of services delivery, multiple Hard, Soft, and Real Estate Services contracts are more frequently integrated and outsourced to one contractor. According to Verdantix, when outsourcing facility services, 70% of organisations in Europe are either currently outsourcing or intending to outsource whole FM processes to one services provider within the next five years. In Integrated Facility Management (IFM), also known as Total FM, the services provider is responsible for the management, coordination, and execution of all facility management services for an organisation. IFM outsourcing occurs through one of three formats:
- The operational services are fully outsourced to subcontractors and managed by one managing agent (subcontracted IFM);
- The outsourced IFM provider performs the operational services with its own employees (self-delivery IFM);
- The outsourced IFM provider self-delivers most operational services while outsourcing some services to specialised subcontractors (mixed delivery IFM).
The popularity of IFM is growing, in part, through the continued technological enhancement of the sector. Technological innovation has made the Operations & Maintenance (O&M) of buildings and the delivery of Soft Services more complex. These increasing levels of complexity support the need to outsource FM services to firms that can more efficiently manage an integrated delivery process that supports optimised building experiences.
Solutions to deliver Soft Services, such as access control, room booking and security are increasingly being integrated with O&M technologies, such as connected HVAC and lighting systems. The skills needed to properly manage these integrated systems are increasingly beyond the capabilities of single service and some bundled service FM providers.
This growth in the implementation and use of integrated solutions for FM service delivery drives the need to outsource to a firm which has subject matter expertise, can do the job more efficiently, and that can remove some of the risk of having to implement and manage new technologies.
Design Build Finance Maintain Operate
Another delivery model is formed around the concept of Design Build Finance Maintain Operate (DBFM or DBFMO). This is the most integrated variation of facility services outsourcing. In this format, the complete operation of a building or site, from design and construction to O&M, is outsourced. Often the operations are outsourced through a Public-Private Partnership (PPP) or a Private Finance Initiative (PFI), in which all aspects of a site or building are handled by the partnership. These contracts often have a duration of 15 years or more (up to 30 years) and incorporate a large number of service level agreements and financial rules to ensure the quality of service during the contract period.
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Service Level Agreements
Service Level Agreements or SLAs are defined in every client agreement. The bigger the contract scope, the more complex these service agreements are, and the more difficult it will be to track and report on contract compliancy. In fact, Verdantix research finds that the inability of service providers to adequately provide proof of outsourced contract compliance is seen as a concern by 56% of service provider customers. As Service Level Agreements become more complicated, this concern will only increase. An SLA can contain multiple requirements and conditions that need to be considered in the service delivery process. Services can be delivered per customer, business entity, building, but also per (group of) asset(s), space(s), or a combination of these. The Service Level Agreement will set the agreed budgets, quantity, quality, time, and place of delivery, requesting process and any other rules of engagement, that have been required by the customer. In addition, measured customer satisfaction can be part of the SLA. A solution that can track these specific agreements pro-actively is an essential requirement to organise a professional service delivery process.
Service delivery process
Organisations that manage facility service delivery in a commercial environment, use the contract with the customer as a base point to organise service delivery and create upsell. Within the customer lifecycle, one can distinguish between different main activities to ensure Service Level Agreements (SLAs) are met with the customer and are delivered satisfactorily.
The combination of customer-oriented SLAs, subcontractor contracts, and service provider self-delivery make professional facility service management a complex and diverse discipline. After acquiring the customer in the commercial phase, the next step is onboarding the new contract and the space, asset, and sensor data of the new client. In this stage it is important that the onboarding process doesn’t take too much time and is accurate. In parallel, recurring activities are planned, subcontractors are informed, and the registration of reactive jobs already starts. Balancing the activities throughout the year and finding the right resources can be a real puzzle. This onboarding stage can be a complex one involving the integration of various factors such as available resource capacity, regulatory requirements, risks, and contractual agreements.
The preparation phase is where the service provider takes care of all prerequisites for the actual execution of tasks, including the short-term planning of staff. Work instructions, work permits and other health and safety precautions, material, and equipment management must be in place. Basically, this is setting all the conditions to do the right things AND do them right, the first time. After this stage, the actual work can be assigned to a field worker. Here, it is important that the field worker has the right knowledge, skills and certificates, as well as availability, to perform the job.
Technology simplifies the delivery of facility services
Planning, execution, and monitoring of service delivery using professional tools with smart automations, ensures that services are delivered as agreed, and creates the opportunity to truly contribute to the business objectives of the customer. Pro-active monitoring of agreements and sense of urgency ensure the job is performed at the right time, with the right resources, and in the right location. During the execution process, it is important to keep administrative burden low, but accurate, with automatic tasks, time, and travel registration. Facilitate optimal communication with the workforce with mobility tools to support their job and monitor progress. Priorities can change, and with an excellent overview of the current situation in a graphical and geographical planning tool, acting on jeopardies becomes far easier. When the customer is satisfied and the job is completed, an automated process can calculate the revenue based on the contractual agreement with the customer, ensuring a swift and accurate invoicing process.
Real-time monitoring during the service execution process and evaluation phase, allows service and contract managers to identify potential (contractual) risks during delivery. Business Intelligence (BI) Dashboards provide immediate insight into service provider performance that may lead to incident escalations, service provider performance lapses, increased service costs, variable levels of customer satisfaction and extended request processing times. Access to these insights help service providers to implement continuous improvement processes for service delivery, contracting and customer focused innovation.
Customers benefit from service delivery technologies too
As a facility services provider, how, where, and when your workforce and that of your customers perform their work is changing. Hybrid working is becoming the standard. More and more office workers are working outside of traditional offices, for instance, from home, satellite offices, or flex working spaces. This has an impact on the availability and accessibility of facility services: people need easy access to relevant services and support information wherever and whenever they are working. Self-service portals allow clients to request services at any time and from anywhere in a very simple and efficient way. With these portals, customers can query the status of requests, the planned delivery, costs involved or review any additional information needed.
The key success factors for self-service portals are process standardisation, simplicity, and communication. Another useful solution for successful self-service management is mobile tenant engagement apps. These improve the customer’s facility experience by providing user-friendly access to services, entering a request, booking a meeting room, or logging an incident.
Successful implementation of a self-service process drastically reduces the number of calls to an operations command centre or a decentralised service desk. Although they will never replace the human interaction offered by a service desk, self-service apps and kiosks allow your helpdesk staff to focus more on providing expert support and the management of customer satisfaction levels. In addition, once self-service processes are standardised and made easily available, service providers can ensure immediate distribution of calls to the relevant tradespeople or external subcontractors without the need for manual interaction through the service desk, shortening the time from request to action.
Upgrade Facility Service delivery with a Facility Services Management solution
Facility services management solutions unify all stakeholders such as customers, service consumers, service provider field workers, technicians, subcontractors, service desk employees, service provider back-office workers, and suppliers in one connected process. The digitalisation of the FM service provider’s end-to-end process in a single source of truth can help Service Providers to develop a Hyperautomation strategy, and enjoy benefits such as increased resource capacity, improved customer retention and operating margins.
A comprehensive Facility Services Management solution includes all the functionality needed to support the life cycle of a customer. These functions include: customer contract and service agreement management, consumer engagement, customer management and self-service, service management, mobile field worker support, resource planning, work registration and monitoring, subcontractor management, KPI evaluation, and revenue, cost and budget control.
All of these are supported through integrated best practices with preconfigured Hard, Soft, and Real Estate Service process support for services such as HVAC, M&E, plumbing, sanitisation and waste management, security, space and move management, landscaping, vending, reservations and visitor management, and other facility services.
Planon Facility Services Business Solution
This page shows how important a Facility Services Management Solution is to further professionalise the service delivery process, and distinguish a provider from the competition in the segment. Top ranked Facility Management Service Provider businesses have taken advantage of the innovative Facility Services Business Solution to achieve just that, accompanied by other benefits such as increased resource capacity, operating margins and first-time-right job execution and billing. The solution offers seamless integration with ERP, finance, HR and other systems used by your customers or subcontractors. Planon can evolve with your organisation over time to enable best-in-class service delivery performance.
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