Multinationals turn to outsourced FM for better benefits

Phil Gregory from Johnson Controls tells us why multinationals outsource Facilities Management.

July 8, 2011

Researchers are suggesting that global economic growth will increasingly be driven by the emerging markets. This impacts business in two ways – organisations will look to increase efficiencies and lower spend, and will consider expanding into growth markets. This makes outsourced Facilities Management increasingly attractive, making it part of a deliberate business strategy for many multinationals today.

Outsourced FM has grown to encompass a lot more than a bundled building maintenance services. Today, FM includes business system infrastructure support, professional energy management, sustainability programmes, Service Level Agreement driven workplace management and building portfolio management.  Multinationals making use of a global FM supplier can get the same reliable level of service and consistent access to processes and systems, and be sure best practices with regard to people, planet and profit are being implemented – regardless of geography.

The benefits of FM are long proven. In addition to the cost and operating efficiency benefits that come with leveraging the scale and strength of an established global FM outsourcer’s supply chain, there’s the exponential value-add of improved transparency of data to support better informed management decisions.  In addition, it provides ‘peace of mind’ that comes with access to industry-specialist resources to help implement change programmes, for example with acquisitions.

Outsourcing FM allows multinationals to dedicate their management focus and resources to their core business, while the FM specialist focuses on managing their buildings.  This makes sense when considering a multinational’s buildings are their second or third largest cost to the organisation.  But organisations are chasing more than cost management today – they are becoming increasingly aware of the value of integrating real estate management, workplace strategy and design into their overall business strategy.

Into Africa

South Africa has a relatively mature infrastructure and across Africa business is improving. Certain sectors (such as oil and gas) are maturing, more governments are stabilising and infrastructure is being bolstered. As a result, trade is made easier. Importantly, as the per capita incomes of these huge populations grow, so too does demand for more sophisticated services. These and other global trends are propelling  the bigger banks and retailers, cell network providers and other multinationals to expand their footprint on the continent and into other developing countries around the globe. To support these businesses, technology and other service companies are following.

Global challenges

Establishing a new office or operations around the globe can be challenging, but it is especially difficult where infrastructure is limited or unreliable, and business environments are not mature. Having a specialist on the ground that understands the idiosyncrasies of the geography, issues around local utilities and other service provision, legislation and regulations, is important to ensure business and business facilities operate as efficiently as possible. In addition, to meet governance and other global business practices and policies, local service assurance – i.e., ensuring that local service providers employ best practices, have the necessary skills and experience, and operate sustainably – is crucial.

Some of the first major challenges in establishing business in a new geography include:

  • finding good people with the right experience, skill and knowledge
  • that can meet the complex requirements of a multinational;
  • keeping people safe and secure;
  • ensuring the right behaviours in terms of ethics and integrity;
  • ensuring you are dealing with legal trading entities; and
  • finding a good supplier of infrastructure and a service provider you
  • can rely on – one that can leverage benefits of scale to your advantage.

A global FM outsourcing partner can assist in all these instances. Many organisations outsource their FM to global FM outsource provider to reduce costs and make us of the benefits of scale a global property portfolio offers. However, they also achieve consistency and continuity, and can integrate more services than running the function in-house or outsourced on a per-country basis. There are also the additional benefits of access to technology, best practices, benchmarking and security. In addition, they can confidently transfer their FM people to the global outsourcer with the knowledge that they will be looked after.

At Johnson Controls Global WorkPlace Solutions, our focus on our people is paramount. Having a strong support base in place to ensure a ‘soft landing’ for a multinational entering a new geography is a hallmark of a good global FM provider. We require local skills to successfully fulfil a contract and ensure proven processes and best practices are in place, superior technology is employed, skills are continuously upgraded and careers are developed. Where necessary, we partner with companies to put these skills in place.

Workplace strategy now key to business

Making workplace strategy and design an integral part of the overall business strategy is paying off. This is not an advanced best practice notion – businesses can gain advantage almost immediately by simply looking at how a building or workplace interacts with the business and optimising it.

By Phil Gregory, senior regional executive: Middle East and Africa at Johnson Controls’ Global Workplace Solutions.

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