By Fred Kloet
Published in the June 2005 issue of Today’s Facility Manager
This profession used to be so simple; facility managers worked in clearly framed national markets within familiar laws and budgets. They followed established networks and trends that generally mirrored national economic trends. But with the growing movement towards globalization, everything became much more complicated.
The influence of big international players has grown, and the power of the European Commission (EC) is felt more and more. National real estate players are fading as existing portfolios are sold or restructured, and private financing is a growing feature of new infrastructure deals. At the same time, outsourcing is becoming more radical. When will this roller coaster come to a stop? What will the playing field look like in 2006?
Organizations are formed, developed, and managed by connecting people, knowledge, and processes. Facility and real estate management have become the catalyst services that support these organizations. The way the catalysts are being used differs by continent, region, country, city, industry, and business.
Increasing transparency and, as a consequence, growing attention to best practices and cost cutting measures do not always bridge the different stages of development of facility management (FM). But now the EC has stepped in to create a level playing field. This action is called “zero-base trendsetting.”
In the EC, the new theme is “Business Support Services.” As a result, FM and real estate are influenced by the move to open up the European services market. The future of facilities managers and, in particular, facilities service providers in the public sector will change once this strategy is implemented. (On average, the public sector represents about 50% of the turnover of service providers.)
In essence, the EC wants to make these markets more transparent to improve efficiency and competitiveness. This strategy could also help governments minimize their facilities’ expenditures. Real savings are to be expected when the EC starts to compare the facility costs per bed per day for hospitals on a European scale or the average maintenance costs of government office buildings. Already, the differences in costs for staffing are growing less apparent across Europe. In the end, FM costs will go the same way.
At the moment, only the larger international organizations are able to prepare themselves for the changing strategies this new information will trigger. Companies like GlaxoSmithKline and ABN AMRO have been gathering and exchanging data and knowledge internally for years. Companies such as Proctor & Gamble and Philips outsource their FM and real estate services because of the cost savings an international approach can offer. Service providers who can respond are able to grow with them. Outsourcing firms are in the news regularly with stories about expanding turnover, acquisitions, or the next big customer.
Facility costs have been compared for years. Benchmark projects have been developed in every country, and indices have been supported by numerous interest groups. Commercially driven standards have been forced upon facilities managers in various countries. Typically, relatively small groups of mostly larger and richer companies form a strong network to protect their valuable data. The goal has always been to enhance an established market position by collecting, using, and sometimes selling this data.
The proposed “Facility Management: Terms and Definitions” and “Facility Management: Guidance on How to Prepare Facility Management Agreements” are being developed by market representatives from all European countries. The use of these two new standards could open up national markets and deliver more cost-effective FM across borders. This presents a huge opportunity for international organizations wanting to compare knowledge in the various countries in which they operate.
The standards divide FM services into two groups: “space and infrastructure” and “people and organization.” These two groups will be clarified with a detailed classification of services, making it possible for the EC to collect data in a structured way. For facilities managers across Europe, this action will make it possible to start benchmarking all of their locations in a uniform way. It will also be interesting to see where best practices actually originate.
Across Europe, many educational networks for FM already exist. The UK, Germany, Italy, The Netherlands, Austria, and Spain all have FM-related Masters Degree programs. However, a European FM Masters program that reflects more than just one region does not exist. Consequently, degree program content still varies widely and is mainly based on the national background of the educational organization. In Italy, maintenance and design remain important; in The Netherlands, services and hospitality are key issues. The Euro FM Education Group meetings are visited by small numbers of educational representatives. Fear of competition and a lack of will to develop a real European framework for FM education remain problems, however.
Behind the scenes, schools are already finding ways to attract foreign students. Swedish professor Jan Ake Granath of Chalmers University says there are plans to connect the FM Masters program with the real estate program-at least one important step towards integration. Comparable initiatives at BIFM, RICS, European Business School, and Villa FM may lead to the eventual creation of a new breed of European facilities managers.
Facilities managers have to know what’s happening on the other side of the international fence. There are already companies and individuals in Europe who are preparing to enter this market, and if FMs want an international career, they must take part in these developments now.
Kloet is managing director of Villa FM and founding president of the European Centre for Facility Management, which seeks to be a catalyst for the development of FM on a European level.