Facilities management can be defined as the tools and services that support the functionality, safety, and sustainability of buildings, grounds, infrastructure, and real estate. The services of facility management include (but are not limited to) Lease management, including lease administration and accounting, maintenance and operations, occupancy and space management, real estate management, energy management, etc. Based on the type of work, facilities management services can be classified into two categories. The hard services deal with the physical assets (for example, plumbing, maintenances, wiring, heating cooling, etc.), and the soft services focus on tasks performed by people. These include security forces, custodial services, lease accounting, etc.
Facilities management is primarily a service. The costing is directly related to the type of service provided, timespan, the difficulty of service, and other similar factors. Hence, value-based pricing and cost plus pricing are two of the most common pricing schemes prevalent in the industry.
The global facilities management services market is valued at USD 740.1 billion as of 2020 and is expected to grow at a CAGR of 4% till 2025. APAC, EMEA, and the North American facilities management market are more or less of the same size, each occupying approximately 30% of the overall market space.
The global pandemic has resulted in the short-term decline and medium to long-term profitability for the facilities management companies. While the social distancing has resulted in a short-term market decline, the vacant real estate spaces are in dire need of management to stay functional post-pandemic phase. This will result in competitive pricing and better value for the facilities management companies.
The requirement of security and maintenance will increase on a medium to long-term basis. This will not only see a rise in personnel deployed for facilities management but also the addition of technology and tools like CCTV and drones for security and remote servicing. All these will help in the growth of the facilities management market.
One of the biggest challenges for the industry is the advent of user and occupant experience in addition to higher productivity and profitability. With cost-plus pricing and value-based pricing being followed in the industry, the requirement of end-user satisfaction is high and rapid digitization has pushed for the integration of cognitive technologies to do this. While this will prove profitable in the long term, this also means that there is a requirement for significant capital investment on a short-term basis. To put this into perspective, an average contract lasts for three years. To maximize end-user satisfaction, there needs to be an investment into cognitive technologies at the start of the contract period. Whether or not, the investment was fruitful can only be judged at the end of the contract period if a new contract is being signed.
The key manufacturers for facilities management services are Jones Lang LaSalle, IP, Inc., Sodexo, ISS Facility Service, CBRE, Compass Group PLC, Cushman & Wakefield, etc. The facilities management services market features a fragmented competitive landscape and several regional players are entering the market. Grand View Research will help our client identify the best-suited suppliers by mapping their core capabilities and operational efficiency.
Component wise cost break down for better negotiation for the client, highlights the key cost drivers in the market with future price fluctuation for different materials (e.g.: steel, aluminum, etc.) used in the production process
Offering cost transparency for different products / services procured by the client. A typical report involves 2-3 case scenarios helping clients to select the best suited engagement with the supplier
Determining and forecasting salaries for specific skill set labor to make decision on outsourcing vs in-house.
A typical newsletter study by capturing latest information for specific suppliers related to: M&As, technological innovations, expansion, litigations, bankruptcy etc.
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