Facilities management - evolution and importance

Col. GK Grover, Professor Emeritus, School of Real Estate, writes in depth about the rapidly evolving Facilities Management profession, including its history, the present scenario and the future of the profession.

07 July 2018

Expert Talk

Introduction

We all have enjoyed this welcome change at large new commercial properties approx. 15 years ago, when we started getting greeted by a smart security guard at the entry gate, diligently conducting security drill and leading to a designated parking area. When we reached parking area, it was clean; lobby was shining; and reception was manned by efficient staff. Everything was responded on shortest possible time -- be it poor air-conditioning or malfunctioning in diesel generators or any other service related issue. Yes, this effortless and pleasing workplace experience was due to Facility Management (FM), which has changed the way we used to service our properties as well as people. 

A new profession took off from here in India. Although FM is now deep rooted in United States and other developed countries, it is now moving towards becoming a recognised profession in India as well. In India, we continue to look at Facilities Management (FM) through the prism of maintenance and management of building services along with administration and estate management. World over, the term Facilities Management is used as an umbrella term covering real estate management, financial management, change management, human resources management, health and safety, contract management, in addition to building and engineering services maintenance, domestic services and utilities supplies. From housekeeping to corporate real estate management, the spectrum covered by FM is fascinating. 

Previously facilities were simple and physical assets required very little effort to maintain. Business equipment were simple, internet had limited use, database was limited to individual computers, networking was limited to telephones and way of communication was more focused on physical meetings. However, 20th century has brought in dramatic changes.

Cabins made way for cubicles and sophisticated modular furniture systems became order of the day. Life got networked, internet became core infrastructure and shared facilities are accepted phenomenon. Transition of workstations to technologically savvy work id has affected how business is being conducted in modern times. Workplace and its management now had new challenges. Customers began to require more support since life at work became more complex but highly efficient. This was the time when FM rose to recognition and became a central business function.

Evolution of Facility Management

Facilities Management dates back approx. 38 years in USA when for the first time it was recognised as a specialist business function. Following is the chronology of key milestones in FM.



Current scenario

Over time Facility Management has become more strategic in the eyes of senior management. Facilities Management professionals have become key advisors to senior management in supporting growth or shrinkage of facilities and services and they now have business knowledge and access to specialized training. For some organizations, FM is a centralized function while in other organizations it is a decentralized function where each business unit is responsible for their FM requirements. The necessity of having different requirements, procedures and services for different types of facilities is one reason that there is a great deal of diversity in the practice areas of the profession. Previously, building management functions and services were provided in silos of support to in-house customers. The Facilities Management now has the unique strategic and tactical understanding of the need to integrate this work among work areas and save organizational funds, time, manpower and physical resources. It provides quality, timely and integrated services to their customers.
Impact of Facilities Management

Facilities Management scenario in India

Till 2000, India continued to have an unorganized approach to Facilities Management. It had building services/maintenance managers, administrators and estate managers looking after an assortment of duties bundled together without any clear definition. The Indian real estate sector witnessed an unprecedented growth since year 2003, followed by easing out of Foreign Direct Investment (FDI) in 2005. These events triggered massive real estate development cycle across all asset classes. This also led to a big demand for FM service as well as FM professionals. The commercial office and retail space presently account for 375 million square feet and 100 million square feet respectively, most of which was created in the last decade. Demand for FM is continuously growing with the thrust various government urban development programs such as Smart Cities, Atal Mission for Rejuvenation and Urban Transformation (AMRUT) and Housing-For-All by 2022. 

Consequent to conception, creation and imminent exponential growth of above assets, Facilities Management has emerged as a very potent necessity for operations and management of these assets. There is however an acute shortage of skilled managerial, executive and technical manpower for Facilities Management. 

Facilities Management market trends in India

Indian market in Facilities Management is poised for an impressive growth. As per TechNavio's forecast the Facilities Management services market in India is expected to grow at a CAGR of 31.17% upto 2018. In India, FM has started with MNCs coming in post liberalization when large IT companies set up their campus and expected same quality of work place environment as it was in USA or European countries. It was not only a pleasing work environment which was in questions but also uninterrupted service delivery to clients. Non-core activities comprising the paraphernalia of activities such as HVAC, electrical services, maintenance and cleaning, plumbing, transport etc. are placed with Facilities Management. Even though FM services are growing at a very good rate but large part of this growth is taking place in unorganized sector. Some of the large industry players in FM sector are A La Concierge Services, CB Richard Ellis, Cushman and Wakefield, Jones Lang LaSalle, BVG India, ILandFS Property Management and Services etc.

The current effective market of outsourced FM services in India was estimated as US $825 million or INR 3,795 Crore in 2011. Compared to rest of the world and some developed countries, the Indian FM market is still at a nascent stage. Due to massive scale of construction industry and large available geographic space, FM market revenues in India are higher than other nations such as Singapore that are smaller in geography. But, in terms of market maturity, understanding, and acceptance of such services by end users, India still has a long way to go. In developed markets, FM services are closely integrated with some other services in the real estate sector, such as rent collection and lease management. However in India, the concept of FM has hitherto not matured enough to provide complete property management solutions. In India, FM services constitutes only 35% of the overall demand for real estate services. Unlocking remaining 65% of properties has many factors i.e. availability of technical and nontechnical manpower, high lead times in manpower deployment, increase in inflation and labour cost, and ineffective provision of services at low rates by unorganized industry participants.

Challenges of a Facility Manager

Increasing use and reliance upon technology, telecommunications devises, and their support systems has increased requirements for HVAC and electrical equipment. Today automation provides the opportunity to reduce paper files but needs a more complex setup of data centers to be managed with zero downtime. This demands that Facilities Management professionals are savvy about technology and understand its limitation so that they would be able to deliver a strategic and tactical support to operations. In a way Facility Managers are now financially responsible function throughout the U.S. Facility Manager is not only expected to be in control of his operational roles but also participate in design stage itself because his input at this stage would have a multiplier effect through the life of project. S/he need to design and translate higher worker expectations into productive, pleasant, safe and cost effective environments with limited resources.

At present large corporations are continuously working in different time zones as well as with different cultures and ethnicity. Facility Manager has to satisfy expectation of all their internal and externals customers. Role of a Facility Manager is challenging as well as exciting in modern corporate environment. Facilities Management demands for wide range of roles and competencies. 

Becoming a Facilities Management professional

Until the last 10 years or so, most Facilities Management professionals fell into the job from diverse fields such as Architect, Engineer, Interior Design, Public Relations, Real Estate, Construction, Business Administration, Marketing, Office Services, Manufacturing, Operations, etc. It happened because there was no formal training available and demand was rising. Hence, people learnt by following other professional or by making costly mistakes. Processes were borrowed from American employers and tweaked to suite Indian conditions. There are still many people who still "fall into the job" especially in businesses where senior management has not recognized the complexity of the Facilities Management work. In India, School of Real Estate, RICS School of Built Environment has started a Post Graduate Diploma in Facilities Management to train FM professionals.

Future scenario

According to Cushman and Wakefield, a commercial real estate services firm, demand in various real estate verticals will continue to remain high. Demand in retail, office space, hotel rooms, and residential are strong growth enablers for the FM market. It is expected that even a GDP growth of 6-7 percent in the next 5 years, will push the real estate sector on a g growth trajectory, with strong prospects for the FM sector. While Facilities Management as a profession is taking roots in India, it shall have to catch up with the USA and western world to keep pace with the advancements in technology and all other aspects. Two major areas that Facilities Management professionals have to deal with are sustainability and advances in information technology. Although future of this sector is very bright and it would be one of highest job creator in real estate sector.

TOP