Frost & Sullivan, a global growth consulting company, recently conducted an analysis of the Southern Europe Integrated Facilities Management Markets–finding that this market earned revenues of US$1.2 billion in 2004 and estimates this to reach US$2.7 billion in 2011.
The analysis from Frost & Sullivan noted that rigid labour laws in countries such as Italy and France are acting as a barrier against outsourcing facilities management, and, as a result, the public sector is likely to rely on its own employees for facilities management. However, in recent times, both the private and, to a lesser extent, the public sector have gradually realised that integrated facilities management (I-FM) can result in significant cost savings in terms of reduced need for in-house I-FM personnel.
“Greater involvement of the public sector in I-FM initiatives, particularly from the health sector, local administrations and the army are indicators of potential growth in the market,” notes Frost & Sullivan Research Analyst Mireille Pierrevelcin. “The recent participation of new international entrants in the Spanish and Italian I-FM markets also promises to expand the market.”
Hospitals are becoming the largest representatives of the public sector. Here, the focus on I-FM projects includes support services (such as cleaning, catering, reception and security) and maintenance. The main reason for the increase in I-FM initiatives in the health sector can be attributed to the efficiency of services offered by I-FM service providers.
The evolution of I-FM depends greatly on this transition from in-house to outsourced management. Presently, the market, comprising few domestic I-FM companies particularly in France and Spain, and a majority of international participants in Italy, is still in the embryonic stage.
Due to increasing competition in certain regions such as Italy, I-FM companies are being compelled to reduce prices to attract clients and gain a competitive advantage.
“This strategy can be worthwhile only until clients gain awareness of the I-FM concept,” states Ms. Pierrevelcin. “I-FM specialists implementing price reduction will not be able to generate profits and this is likely to spiral into financial difficulties in the future.”
Instead, I-FM participants should focus their strategies on marketing their service offerings to create demand among potential clients. Promoting the advantages of a single provider for all I-FM services will prove beneficial. This is crucial since currently, awareness of the I-FM concept and its advantages remains low. Moreover, it will become essential to meet the needs of customers in terms of quality service delivery and possess good track records with favourable references in order to remain competitive.
Facility professionals interested in receiving a virtual brochure, which provides manufacturers, end users, and other industry participants with an overview of the latest analysis of the Southern Europe Integrated Facilities Management Markets, should contact Chiara Carella at Frost & Sullivan by e-mailing chiara.carella @frost.com. Please include full name, company name, title, telephone number, e-mail address, city, state, and country. The brochure will be sent to interested parties via e-mail.