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“Outsourcing FM requirements ensures a one point contact to service all our needs,” says Singh citing projects like Sahara Grace residential complex (Gurgaon), Sahara Ganj mall (Lucknow) and Sahara mall (Gurgaon) whose FM requirements have been outsourced to private service providers. “We don’t have to run behind vendors for sourcing services like housekeeping, engineering, security, pest control and horticulture since they are now the sole responsibility of the FM agency hired for the purpose.”
“Outsourcing is bound to bring down the cost of activities if the contract is managed smartly,” says Panjwani. “Engaging a large and reputed firm helps in bringing their economies of scale to the company. The costs of a specialised company are also likely to be lower. These are the direct costs, but the real benefits accrue in freeing the organisation’s time of sourcing, planning, training, managing and monitoring the performance of a large workforce engaged in a non core activity.”
Stressing on the rising demand for quality FM services in real estate, Vishwajeet Jhavar, CEO of the Pune-based Marvel Realtors that has an inhouse FM team, adds that the entry of MNCs who form an important client base for developers, has been an important factor.
“Most MNCs follow stringent FMS norms in line with their global practises which local developers have to cater to if they want to sell their project,” says Jhavar. “This awareness is now applied across most residential projects also, wherein the FM needs are serviced by external agencies or inhouse teams set up for the purpose.”
Yet the sector has not been immune to the adverse effects of the ongoing recession, considering that real estate has been one of the hardest hit. “All our clients are focused on cuttings costs,” admits Kapila. “But as a professional FMS provider we are okay with that. The challenge remains to reduce costs without compromising on quality.”
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“Like any other industry, the FM industry is also going through trying times,” avers Panjwani.
“Cost-cutting is the new mantra, which is not such a bad thing and will bring about efficiencies. Downsizing is a reality. Margins are under pressure. Companies have made investments in anticipation of the growth that was being projected.”
Voicing her perspective on the issue Gandhi says, “Payment delays from clients and the increasing inflation have affected cash flow. Many projects are delayed which in turn has delayed the decisions regarding outsourcing of FM services. A reduction in manpower has also led to a compromise on quality and a thinning bottomline.”
In the light of this difficult market reality, FM service providers have been forced to do a rethink on their business strategy. “Our strategy has been to firstly focus on quality and customer satisfaction,” reveals Gandhi.
“We are also engaging in the detailed study of customer satisfaction reports and ensuring proper implementation if required. This is a time to leverage lead management to maximise the value of each lead and focus on building our credentials in the market. We have to adapt our products and services to suit this new environment.”
“The major challenges are lowering expenses and providing facility solutions acceptable at different locations in a region and preferably worldwide,” says Panjwani. “Other areas would include an accurate measurement of facilities deliverables and adoption of environment-friendly practices.”
“The industry is very quickly moving towards an output-based service where customers measure the costs with the output delivered,” concurs Kapila.
“We are working with our customers, vendors and others in our supply chain to drive down costs in keeping with the market requirements. We have to be receptive to the requirements of our clients. I actually believe the current market condition is a fantastic opportunity to generate some real innovation in terms of our services.”
Faced with other key challenges that include manpower retention, lack of skilled professionals, non compliance by unorganised small operators and absence of a regulatory framework, FM service providers however remain optimistic.
“FM will play an important role in the growth of major emerging sectors like telecommunications, drugs and pharma and biotech industries,” feels Gandhi. “Growth in the infra segment is also likely to increase the volume of FM business.”
But as Kapila points out, the onus is clearly on FM companies. “Service providers have to push the boundary themselves on what can be delivered rather than relying on customers to come up with ideas. There is a need to innovate to drive down costs and cut risks. It’s up to us to find ways and means of how we can deliver even better value to our customers.”
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