by Brianna Crandall — June 23, 2017 — Technology innovation, new business models, emerging value propositions, and creative new service offerings are transforming facilities management (FM) in the United Kingdom, according to a recent report from growth partnership company Frost & Sullivan. The U.K. FM market is moving toward service integration with sophisticated advisory services focused on business productivity; however, FM services are commoditizing, and organic growth is hard to find, according to the report.
Frost & Sullivan advises that companies must embrace service innovation and innovative value propositions built around enhancing business productivity if they are to remain profitable in a rapidly evolving ecosystem.
Growth Opportunities in the U.K. Facility Management Market, part of Frost & Sullivan’s Homes and Buildings Growth Partnership Service (GPS) program, finds that the U.K. FM outsourcing industry will pass $40 billion in total revenue within the next five years. In the next eight years, integrated facilities management (IFM) penetration is expected to reach 27.3 percent — the highest in any country in the world.
The study includes growth forecasts, comprehensive market metrics, competitive analysis, service trends, customer sector trends, and mapping of the most attractive opportunities.
Energy and Environment Partner and Business Unit Leader John Raspin stated:
The pace of change in the U.K. FM services market is faster than suppliers have ever experienced. Collaboration, partnerships, and mergers and acquisitions are critical as the market is disrupted by technology. To drive efficiency and deliver value-adding services in a mature, highly penetrated market, suppliers must harness advanced technologies, adopt business models such as everything-as-a-service (XaaS), and enter accessible high-growth segments such as energy management, performance contracting, and sustainability management.
According to the report, trends and developments driving growth in the U.K. FM market include:
- High levels of merger and acquisition activity driven by service expansion, vertical customer alignment, globalization, technology addition, and overall expansion of the value proposition;
- Self-delivery firms increasing bundled services and IFM;
- Energy management services growth that is set to outstrip the overall FM market, with energy performance shrinking the key growth business model;
- Data analytics transforming client delivery models and creating value-adding insights for customers and suppliers;
- Growth opportunities in service innovation due to the convergence of FM with technology and workplace optimization;
- Private-sector growth that is ahead of the public sector, especially in commercial offices, the financial sector, and industry/manufacturing; and
- Technology-centric megatrends that are set to transform U.K. FM services in terms of both service delivery options and customer behavior. Examples include the Industrial Internet of Things (IIoT), artificial intelligence (AI), augmented reality, and intelligent robots.
Connectivity and convergence mean cloud-hosted analytics will increasingly drive remote management for technical services and preventative maintenance. To gain a competitive advantage, FM companies must adopt or develop technologies such as service drones and intelligent robots, while also facing competition from technology firms and original equipment manufacturers.
Growth Opportunities in the U.K. Facility Management Market is available to purchase from the Frost & Sullivan Web site.