International facilities strategies from the Wire Services | Facility Executive - Creating Intelligent Buildings

Growing Need to Reduce Costs and Improve Productivity Fuels Companies to Adopt Integrated Facility Management in Central Europe The increasing awareness of the need to enhance business efficiency and reduce costs is fueling the demand for integrated facility management (I-FM) solutions in central Europe. Investing in a comprehensive I-FM program is likely to enable companies […]


https://facilityexecutive.com/2006/01/international-facilities-strategies-from-the-wire-services/
Growing Need to Reduce Costs and Improve Productivity Fuels Companies to Adopt Integrated Facility Management in Central Europe The increasing awareness of the need to enhance business efficiency and reduce costs is fueling the demand for integrated facility management (I-FM) solutions in central Europe. Investing in a comprehensive I-FM program is likely to enable companies […]
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International facilities strategies from the Wire Services

International facilities strategies from the Wire Services | Facility Executive - Creating Intelligent Buildings

Growing Need to Reduce Costs and Improve Productivity Fuels Companies to Adopt Integrated Facility Management in Central Europe

The increasing awareness of the need to enhance business efficiency and reduce costs is fueling the demand for integrated facility management (I-FM) solutions in central Europe. Investing in a comprehensive I-FM program is likely to enable companies to minimize their costs by supporting improved personnel productivity.

“Properly managed facilities can prove to be a means of meeting corporate goals while also being an indirect source of profits, instead of merely generating overhead costs on the company’s balance sheet,” says Mireille Pierrevelcin, research analyst at Frost & Sullivan .

Further, large manufacturing industries with several offices and production sites dispersed across central Europe as well as multi-site companies such as banks and insurance firms prefer contracting with a ‘single-stop’ FM provider to meet all their needs. This trend is favoring I-FM providers with the largest possible service offerings. Hence, I-FM companies will benefit by widening their range of facilities services and acquiring necessary skills in different sectors.

At present, I-FM solutions in the building operation and maintenance market segment contribute to the highest revenues. Meanwhile, these solutions are also finding increasing application in support services, environmental management, IT, and telecom, as well as property management in both private and public sectors.

The private sector (which represents 80.5% of end users) remains the main source of revenues as finance, IT, and telecom and aerospace sectors as well as manufacturing industries are investing in I-FM applications.

At the same time, increasing market growth is forecast in the public sector due to the implementation of recent initiatives (such as the partnership between private and public sector programme (PPP)). Accordingly, the public sector, with 19.5% of the market revenues, will increase its involvement in outsourcing I-FM. In keeping with this trend, hospitals, universities, schools, and city authorities are likely to boost investments in I-FM projects.

I-FM companies are also increasingly investing in research and development (R&D) in a bid to enhance their offerings. Such technological innovations will enable these companies to combat growing competition. Besides, the increased focus on I-FM certifications will also prove beneficial, as this will assist I-FM companies to assure end-users of the high quality of their services.

Sustained by these trends, market revenues in the central European I-FM market (comprising the German, Alpine, and Benelux I-FM markets) are expected to grow from $4.40 billion in 2005 to $6.70 billion by 2011.

The German I-FM market, which is the leading I-FM market in central Europe, will witness further growth thanks to the increasing demand from the public sector for PPP. Moreover, with growing acceptance of I-FM outsourcing, revenues are also likely to increase in the Alpine and Benelux I-FM markets.

Efforts by new entrants in Germany, France, and the United Kingdom to break into the central European I-FM market have resulted in intensifying competition. Thus, international I-FM companies will need to be keenly aware of cultural and social particularities in the region to gain a competitive edge in the market.

Currently, in a bid to combat competition, several I-FM companies are promising a wide range of services. However, as most of these companies are failing to deliver these promised services, customer confidence has fallen and is likely to hamper future market growth.

Yet another challenge is the growing number of I-FM companies that are adopting a low price policy to control existing competition. However, clients are growing aware that a low-price I-FM contract often fails to meet all their requirements.

“Hence, while an aggressive pricing strategy might meet with an initial enthusiastic response from customers, over the long-term, the inability to meet their needs is likely to pose a challenge to I-FM solution providers,” remarks Pierrevelcin.

Thus, to increase their market share effectively, I-FM companies will need to invest in constant innovations. Besides, pursuing long-term partnerships with their customers and providing tailor-made services will prove beneficial to I-FM solutions providers, even while the integration of the full I-FM services will become the new challenge for medium and large-sized companies trying to remain competitive in the market.

For more information, send an e-mail to Magdalena Oberland, corporate communications, at [email protected] with the following information: your full name, company name, title, telephone number, fax number, e-mail address and source of information. Upon receipt of the above information, an overview will be sent to you through e-mail.

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