1 April 2019 | Julian Fris
Outsourced facilities management is continuing to defend itself in the glare of a national spotlight. For this month's Think Tank poll we asked if you think the market is changing to favour smaller providers?
Here is Julian Fris' opinion on what he thinks is happening.
Is outsourcing favouring the smaller players? This isn't the case - yet.
It is really a question of risk; clients need assurances now more than they ever have, and there is still reticence about taking a gamble on a smaller player.However, we are living in an age where both demand and supply side need to assess how they do business.
What we are seeing is that collaboration is more important now than ever before.
SMEs cannot be thrown into a situation they are not prepared for, as there is a higher perceived risk of failure. Companies need to work together to mentor and support smaller players either coming into, or growing into, a different marketplace.
Generally, we are seeing a preference for the smaller companies perhaps with smaller single or bundled contracts - TFM models may be declining but there is more interest in managing agent or integrator models.
As consultants, we also have a responsibility to engage smaller companies and create an environment where they can succeed. The appetite for risk is changing, but there is still a long way to go.
Ultimately, in the short term, some may take the view that outsourcing is favouring smaller players - but this is because they are being forced to - not through desire. In the medium term, more collaboration and partnership is required to build greater trust with the smaller players into the market so that they are not set up to fail.
Long term, if one can predict 'long term' these days, the market will adjust to responding more favourably to smaller players and really this is a traditional business cycle. The more successful SMEs will grow and expand, merge, acquire, but with a newer ethic picking up on lessons learnt from current practices.
FM is still a young industry, of which many organisations see the benefit, but there needs to be a more equitable approach to succeed.
According to recent stats over 70 per cent of FM companies are robust, so let's not get jaded by the highly publicised failures - these companies are less than 5 per cent of all FM providers.
Julian Fris is director at Neller Davies