There is an increasing trend in the West with clients looking towards customer-focused, smaller FM companies due to “disappointing under- delivery” from the larger players in the market. Service providers share their thoughts over a LinkedIn discussion. Excerpts:
Steven Belcher, Project Manager-FM Generator, Greater Boston: It is no surprise that the clients’ perspective towards engaging service providers is changing. I can see changes in businesses with the influence of European and Scandinavian centric companies where the mind-set has been to take contracts from individual boutique service providers, preferring a homogenization of services by a mega supplier. I have been at both the ends as FM and now service provider, and I feel that the mega suppliers are not necessarily wrong for short term gains. However, they have not got it right regarding retaining relationships with both the suppliers and customers.
Steve Voller, Founder Altuity Solutions Ltd, Bristol, UK: Smaller organisations, by nature, are more customer focused and also have the capability to react quicker. Could the market be moving towards a federated approach to working with multiple, best of breed, suppliers? A little like the move to federated systems rather than monolithic systems!
Glen Hibberd, GMH Strategic Facilities Services, Melbourne: As FM outsourcing continues to evolve, clients’ expectations also change. I think many clients are now keen to cling onto the strategic aspects of their FM function. As a result, they are seeking a more vanilla flavoured service offering from their providers. No bells and whistles, just reliable service and no surprises. Transparent commercial transactions and honesty in communication. The smaller or boutiques sized providers are often better placed to deliver this offer.
Ken Gunston, Facilities & Asset Management, UK: At our end, we have to supply our clients not only a good professional service, but the personal service that many expect. We retain our client (several in contract for over 10 years) by ensuring that the client is fully informed, not pressured.
Although we have to make profits to stay in business, we work harder for that profits, and we can be flexible with targets to retain clients’ confidence. Try local and small, you have nothing to lose, as the big boys will always take you back if you are unfortunate enough not to want that personal service. Talk to existing client of small businesses, we will be area restricted, but can concentrate on good customer service.
Kim Wadsworth, MD, Kirklees Cleaning Ltd, Huddersfield, UK: I have recently visited a few sites of a company and actually thought that they did not have anyone doing any cleaning for them. I contacted the head office only to be told that they employed the services of a large national FM service provider. When I checked the FM company’s website, I found that they do not have a full complement of staff at all the sites; it is no wonder they can gain the contracts with low quotes, but it is also no wonder the standard of cleanliness is not good at the sites. There is a lot to be said for a smaller personal service.
Chris Patfield, Contract Implementation Manager Xchanging Hemel Hempstead, UK: The thing I have found in the past is that no service is identical… obvious but true. Though nearly all clients require about 80% of the same services, the final 20% is the “unique” aspect and is where attention needs to be paid. In my experience, the mid-market suppliers are able to accommodate this. The larger FM organisations tend to lack the flexibility/entrepreneur approach. However, if you are a client who has multiple sites, covering a large geographic area, you may need one of the larger “national” organisations to be able to cover all the regions. So the key for me is to look at the whole estate and that unique 20% and then draw up the strategy.
Ken Gunston: Clients with multiregional offices believe that a single large maintenance provider is easier to manage. Normally, this is the financial director’s idea of simplicity, to reduce invoicing and contractors or reduce the accounts department workload. But regional differences mean that overall costs can be reduced by using local suppliers. If there is one FM manager within the client’s company, then best is to liaise with one contractor for all sites, but where regional offices have their own budgets, and sign off their own works, why not have individual suppliers.
SMEs have to be client orientated and supply quality, experience and genuine good service. Again, why not give your local supplier a chance, the national supplier will always welcome you back if it doesn’t work out, but in my 30+ years’ experience, once you have used a local supplier you will avoid the national suppliers.
Peter Morrissey,
Many of us are now in the same trenches, small and large.
Dave Thomas, Director at Domino Safety Management Ltd, Granada, Spain: Large FM providers with regional offices see the way to go – but the small company with only one or two locations that need servicing usually starts to feel left out. It has no power when it comes to their position in the queue – they can lose an engineer to a louder call even when he is already on site and working.
Importantly, those large FMs do not seem to have all the elements of FM under one roof, either having subordinate companies with their own structure, board of directors and overheads adding to the cost, or entering into agreements with other large specialists to meet the shortfall in their offerings/coverage.
They are not interested in the small businesses, they cannot/will not pay the sums that are profitable to keep the big guys operational. There is nothing to be gained in turnover and profit which is all they are interested in. Many companies are proud of the fact that they only deal with local suppliers, no nationals, putting local money with local workers.
Wendy Sutherland, Owner, Director at Ramsay Todd Ltd, Hertfordshire, UK: The key is understanding what the requirements are and what the nice-to-haves are. If the big companies meet all of the client’s requirements then how many of the niceto- haves can they deliver? It also depends on who runs the procurement process. Big companies have the resources to prepare good tender responses and therefore, achieve better scores, which do not always deliver the best end result.
Ted Selmer, Planner/Estimator at Brookhaven National Laboratory Upton, New York: I work with our procurement staff very closely to review all incoming bid packages. Onsite pre-award meetings with all bidders have proved to work well for us. It is about communication and not necessarily lowest bid. The smaller companies can provide great services.
John Hajduk, Associate Director at Penn State University Facilities Engineering Institute State College, Pennsylvania: You may find some bright spots from smaller FM companies but you will also have tragic failures. Perhaps more of a consideration is the incremental organizational effort it takes to manage many small contractors. It is not just more effort from your FM staff but more from supply chain, legal, accounts payable… etc. I would also suspect that you will pay more with the many small contractors approach… basic economics.
Louise Clark, Senior Procurement Manager at Post Office Limited,
London, UK: It is down to the effectiveness and dedication of the account management team; I have dealt with smaller and much larger FM companies and the best results come from the best relationships. If your management team is no good, get rid of them — as a client you should have the confidence to influence who you deal with.
Dave Thomas: The rationale is that going to a large company can buy better support for a better price and better experience. The benefits being that “synergies” can be made; that is, staff reduction at all levels, not just in FM but also in accounts by reducing the 1,000 invoices a month down to one and you can reduce manpower as well.
John Hajduk: If your company is still selfperforming the commodity purchasing, I would suggest considering having your FM firm deal with all the logistics associated with purchasing of low dollar / high volume items (supplier and consumables). If you partner with the right firms, it works well… the problem is that a lot of smaller players do not have the infrastructure of the financing to perform this at all, let alone well. Again… pick the right firm, draft the contract correctly, have a good specification with SLA and consumables.
One of the other problems is that companies hire FM firms but use them like a body shop. They then find themselves managing the FM employees, buying suppliers, and still managing the business that they are paying the FM firm to do.
Jeremy Dicks: In the services industry, it is essential to continually innovate and add value, whilst delivering expertise, dependability and trust. Smaller companies can sometimes be better at this. To win the business, the challenge is how to show the value for money, rather than the buyer just seeing the price.