Evolution In FM Industry In Last Two Decades

Deepak Shanbhag, CEO, PSIPL talks about the evolution in the home-grown facility management space. The economic reforms in the ’90s led to a tectonic shift in business mindset, from customer needs to client satisfaction and delight. This shift led to an une

BY Realty Plus
Published - Friday, 17 Sep, 2021

Evolution In FM Industry In Last Two Decades

Deepak Shanbhag, CEO, PSIPL talks about the evolution in the home-grown facility management space. The economic reforms in the ’90s led to a tectonic shift in business mindset, from customer needs to client satisfaction and delight. This shift led to an unending quest for quality and competitive advantage, and hence to the idea of hiring vendors for not so critical activities and jobs. On the other hand, the FDI & MNCs were already operating on such outsourcing models for non-critical areas. The organized FM space saw its evolution with global FM players setting up bases in India. It gave the Indian business an option to choose global players & also pushed the evolution in the homegrown FM companies’ space. Starting from housekeeping contracts, the scope of the contract expanded to other non-critical aspects like water, electricity & waste management services. At this point, these contracts were only a function of manpower supply and hinged around the supply of man-hours. This was governed by various government statutes in terms of wages and related salaries components of insurance and social security. While the adherence to these statutes was a mandate, many unorganized players did not comply with it. Hence the entire India FM market was split into compliant and non-compliant players, with the bulk of it falling in the latter space. With the advent of technology and the new age of entrepreneurs, there were two paradigm movements in the FM space. First being the alignment of vendors with the overall business outcome and second the reinforcement of mandate on compliance to the statute. Alignment of vendors with organizational goals and objectives meant that the businesses were looking for partners and not for vendors, which led to the revised commercial arrangement based on the outcome of services rather than pure manpower deployed. This was the time when large global MNCs awarded FM contracts on SLA per square feet. This model gave rise to a whole new set of evolved FM players for whom wage compliance & site employee was non-negotiable. The SLA model impact made the FM players think for ways and means to augment its financial impacts. This enabled specialized services interventions typically on the energy management side. The FM portfolio had now moved from non-critical to the near-core side of client business making a notable contribution towards the overall client’s business goals. The overall selection process of an FM partner became more structured and critical. The request for proposal process (RFP) became cyclic and with more and more large and mid-sized organizations following this process. The outcome-based FM model focused on new avenues of intervention and it also led to the need for strong governance of the core FM activity. This meant strong supervision, governance, and flow of information seamlessly. However, this would not be feasible as long as there is a 100% manual intervention in these actions. Computer-aided FM was hence conceptualized and was driven by the large global giants. This was called “CAFM”, computer-aided FM. CAFM actually was great in terms of its concept but lacked agility, customization, and user-friendliness. FM players and clients lived with CAFM for a while, next-gen app-based CAFM replaced it during the tech revolution of 2015-18, where you had apps for all that you did and needed. Global FM players had to rely on their parent organizations for approval and roll out while the home-grown firms were quick to adopt and roll it out. PSIPL app-based end-to-end FM solution is one of the proven case studies in this regard. All services were tagged using QR codes, prompting checklists, and auto reporting to the users/clients has changed the FM space forever. App-based FM allowed players to offer near core and core outsourcing solutions seamlessly with resource optimization and better yields. Repairs, maintenance, Critical utility upkeep, and vendor management could now be weaved in a single platform with autonomous information flow between stakeholders operating within their own ecosystems. The outcome-based FM contracts are getting redefined. Clients are demanding FM solutions with App-based technology as a prerequisite. Businesses today look for FM partners who can allow them to focus fully on their core business activity while the FM partner takes care of everything else! In times of pandemic, the focus has shifted to the site level staff and FM players are trying to establish themselves as more sensitive to client's well-being at all levels. There is a tectonic shift in the government. owned facilities as well. Many of the government organizations like sports authorities, Metro projects, Railways, Airports, Ports, Medical facilities, Govt Housing societies, etc, are looking to upgrade the overall end-user experience which is going to drive the next level of growth in the FM market in India. FM evolution has been remarkable from manpower supply to experience creation. This is very much in line across the industry segments. With more and more spheres of business looking for experience and hence outsourcing to subject matter experts is only going to drive the need for established, credible, compliant, and tech-driven FM players for many years to come.