6 benefits of integrating facilities management services

Businesses are increasingly seeing the value in streamlining the management and optimisation of their real estate

March 20, 2023

Real estate is typically the second highest expense for organisations and takes up a disproportionate volume of resources. Yet for many, property is not even their core business.

However, as companies navigate a new world of work and new priorities – from sustainability to employee experience – the urgency to understand and optimise their space has never been more critical.

To achieve this, companies are increasingly opting for integrated facilities management (IFM). This refers to the management of organisation-wide systems – such as corporate real estate, reactive and preventive maintenance, workplace experience, design, projects, and delivering on sustainability objectives, in a consolidated way through a single outsourced provider rather than multiple external experts.

“The key motivators of outsourcing are cost, sustainability, and compliance,” says Nick Moore, head of sales, Work Dynamics, at JLL. “IFM provides a single end-to-end solution with a goal to drive better outcomes for businesses through consistency, processes, and innovation.”

The global integrated facility management market is has grown from US$87.86 billion in 2021 to US$94.18 billion in 2022-2023 at a compound annual growth rate (CAGR) of 7.20%. By 2026, the market is forecast to grow to US$119.55 billion at a CAGR of 6.15%, according to one global research group.

Across the Asia Pacific region, Australia is one of the most mature outsourced markets, with many businesses now into their third, fourth or even fifth cycle, or generation, of outsourcing.

There is no one-size-fits-all approach to IFM. What it looks like for one company will differ from another. But post pandemic, just about all businesses are adopting new ways of operating, and many are embracing the benefits of IFM.

Here are six benefits, below:

1. Reduces and controls operating costs

The global economic impact of Covid-19 has left many corporate occupiers looking for ways to control and reduce costs, turning to outsourcing for the first time (first generation outsourcing). IFM helps to pinpoint where too much money is being spent, wasted, or not being properly managed.

“If a business is looking to cut costs, they really need to look at the procurement chain of their third-party contractors to see a tangible outcome,” Moore says. In first-generation IFM outsourcing, businesses should expect between 15 to 25 percent reduction on third-party spend.

2. Supports sustainability targets

From construction to daily operations, real estate accounts for 40% of all emissions, so sustainability is a top-agenda item for businesses.

“Ambitious and ambiguous targets are being set like, ‘carbon neutral by 2030’, but it’s the delivery that’s the challenge,” says Moore. “IFM can help support businesses on their sustainability journey by creating an action plan and then delivering on operational emissions reductions.”

In one example, where JLL provided IFM services, an Australian federal government agency, which was performing below Commonwealth energy efficiency standards reduced its energy consumption by 80% and increased the NABERS energy rating of its leased premises from 3.5 stars to 5.5 stars.

“We were able to address multiple energy saving opportunities including lighting replacement, metering and monitoring, and system optimisation,” says Moore

3. Streamlines operational processes

Consolidating all facilities management activities under one umbrella or a single point of contact saves time, energy, and money. Conventional models are often slow, inefficient and costly. IFM leverages facility management software to improve the visibility of the entire operation, facilitate better management of teams, and improve decision-making.

4. Improves the employee workplace experience

While the workplace is being redefined, it still matters more than ever. A positive employee experience can be the difference between an engaged and productive company and a company facing even more disruption. “IFM is about understanding the functionality a business and its employees’ needs, then designing a workplace that supports that,” Moore says.

5. Utilises advances in technology

Businesses benefit from the external access IFM provides to best-in-class digital strategies and solutions without the start-up investment. From data and automation to integrated cloud-based systems, businesses are equipped with actionable insights, which power them to make better decisions, with the assurance of compliance.

6. Reprioritises the core business

Less time managing day-to-day operations allows businesses to focus on their big-picture goals. With IFM, companies outsource their non-core operations, enabling them to focus on what they’re good at and what ultimately generates their revenue.

The bottom line

Being a mature outsourced market, Australia finds itself at an interesting point in time. Healthy tension is arising due to businesses seeking the best-in-class model for providing workplace and real estate management.

“Some are experimenting with a disaggregated model or reverting to insourcing, which is creating healthy tension, but not necessarily yielding the right results over time,” says Moore. “Globally, we have seen this trend play out yet clients return to an integrated model because their property strategy and execution are just simply not linked.”

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