The squeeze is on

BIFM chairman Iain Murray examines the recessionary imperative to provide airline service at submarine prices

12 March 2009

Airline service at submarine prices - this is an adage I collected a few years ago, which in truth just amused me rather than accurately expressing my ethos in business. My concern at the moment however is that with an ever increasing downward pressure on costs that it does not become submarine service at submarine prices.

The FM industry has always taken pride in its service levels and most of the businesses I speak to still want to maintain high levels of service, but are being squeezed on price. There is a very real difference between squeezing and seeking efficiencies, and I know that we are all focused on the latter.

I took part in the recent roundtable discussion, organised by the BIFM in association with BDO Stoy Hayward, on FM in the recession and the consensus around the table was that everyone was looking to be proactive in relation to costs rather than waiting for the hammer to fall. This approach was universally agreed to be the way to recognise that money had to be saved, but that service levels could be maintained or at the very least reconsidered with a new price tag.
Fundamentally though, the drive would continue to be to deliver high standards for an appropriate cost. The dilemma will come of course, when some of us are faced with a new question: "What is the lowest cost I can occupy my facility for, regardless of the future?" and sadly some businesses are having to answer this question.

We all know part of the answer is to continue to meet our statutory compliance but what comes after that, I think we all fear an uninformed instruction to pare costs back to the minimum without due consideration for the future, because we all have experience of estates that are neglected and need expenditure after years of underspend.

My fear at the other side of this particular spending squeeze, is that FM will suffer a backlash from those who thought that minimal maintenance would not have an impact in the long term costs and wonder why their whole life costs have gone through the roof, literally.

We better work out an answer though, as the economic cycle seems to be seven years, and on that timescale we will have this problem forever.

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