[Please note this page is a part of our 10th anniversary collection. It was written in 2009 and has not been updated.]

FM is a strange and interesting business. It's an industry that can't define itself except in the most general terms. We don’t know how big it is because that depends on the definition you choose. It encompasses an often uneasy mix of service suppliers and management specialists, confused further by the fact that the latter can often be competing on the same pitch as the former. And in addition to covering the vast and diverse supply-side, the term also extends to customer-side in-house operations. We have one institute and one association with FM in their titles, and a number of others laying legitimate claim to a presence in the sector – but all, at times, have appeared to be as confused about the industry as any newcomer and disappointingly vague about their role in supporting growth and development.

 

But grow and develop the industry has, steadily over i-FM's ten-year history and for some years before that, too. And now, FM has reached the point where it needs to face up to some of the bigger challenges if it is to establish and cement its position as a key management discipline, recognised for the contribution it can make to economic, environmental and social goals.

 

Some of those challenges are captured in the ten themes listed here. But any such list is shaped by the compiler's perspective. These are the factors we think have been most important, as observers of FM for the past decade.

The concept of outsourcing and the business of facilities management are almost inseparable (see Theme 2). From the earliest days of organisations deciding to 'contract out' the services perhaps most easily identified as 'non core' to their operations – cleaning or catering, for example – demand has done nothing but grow (see Theme 3). That in itself has been a major driver behind the expansion of the FM industry, and will continue to be so.

 

Though we use the term 'outsourcing' routinely in the industry, and in business generally, it still carries a negative connotation in many parts of the organised labour movement where it is equated with cutbacks and a threat to jobs. Public sector outsourcing practices have been shaped by such concerns, notably in the development of TUPE regulations (see Theme 7). Such sensitivities often do not extend to the private sector. MITIE, one of the biggest service providers in the UK marketplace, has been steadily repositioning itself in recent years and the first line on its new website is, in effect, 'we are a strategic outsourcing company'.

 

From a starting point of single-purpose contracts (typically, maintenance, cleaning or security), each handled by a specialist supplier, the outsourcing concept has broadened over the years to encompass 'bundles' of services put in the hands of a multi-discipline contractor. Looking back over the past ten years, there has been a definite trend in this direction. It benefits the client in that there are fewer suppliers to deal with and possibly economies of scale to be gained; and it benefits the provider in that his contract is bigger.

 

A few years ago, some of the larger contractors sought to capitalise on their ability to bring diverse service lines together in 'integrated' packages, promising their clients greater efficiencies and reduced management costs. Indeed, four or five years ago it looked as though that was the way we were headed: many of the big suppliers were suddenly promoting their integrated offerings and one, Initial Integrated Services, even got a major launch - complete with special event, extensive direct marketing and dedicated advertising. Clients failed to beat down the doors, however, and this approach has since settled down to being just one of the several on offer at Initial and similar diversified suppliers.

TFM – total facilities management – is in a way the pinnacle of the single/bundled/integrated hierarchy. In this case, the provider takes on responsibility for the delivery and management of all required service lines. This once-common approach has become less so as many of the management specialists have either extended their skill base or been bought by ambitious contractors. Macro, which offers only white-collar management services, has few direct competitors in this regard. TFM solutions can also be sourced from a range of other FM specialists or from diversified contractors, who will generally meet as much of the need as possible from their own resources.

 

This is a perennial challenge for the industry: just what is FM and how do you draw boundaries around it in the marketplace? Any definitive market research study needs to answer those questions.

 

And not surprisingly, the answers have varied. Depending upon the definition used, UK FM is worth:

 

• £10bn (Frost & Sullivan 2001), or

• £173bn (Mintel 2003), or

• £180bn, with contracted out FM accounting for £110bn of that (Mintel 2005), or

• £42.6bn, with outsourced FM accounting for £18.9bn of that (BSRIA 2006).

 

Two research firms review the outsourced FM market regularly (again using their own definitions). MBD puts a value of £116.8bn on it in 2008, projecting that to grow to £126.9bn by 2011. MTW puts a 2009 value on the market of £28bn.

 

Good market research continues to be much needed but difficult to provide, not least because of the definition problem. The one thing we know for certain is that the facilities sector in the UK is a large and dynamic marketplace.

 

Little help is available on this issue from two landmarks in the 'official recognition' of FM, both significant but both limited in their applicability. The European standard definition of facilities management (or rather facility management, the preferred form in much of the world beyond the UK) – EN 15221, signed off in 2006 – is by nature general in its terms; and SIC Code 81.10, which came into effect from January 2008, excludes all single-service operations and is a bit vague about treatment of the management role.

 

Though the supply side of FM is just as big, diverse and confusing as ever, it is also the case that the big boys have got bigger by buying up the competition. Many have also extended their service offering by buying in specialists. Take just one example: Carillion acquired PME in 2005 to strengthen its engineering skills. It bought Mowlem later that same year, and in 2007 acquired Alfred McAlpine, which itself had acquired Stiell in 2002. Carillion's strategy has certainly produced growth: it sits at the head of the i-FM Top 50.

 

A look through our 10-year news round-up or a scan back through our Trends and Opportunities reports will reveal consolidation as a consistent factor (see Theme 2). The pursuit of scale – in terms of turnover, service spread and geographic coverage – has been relentless. Yet at the same time, there remain plenty of (mainly) single-service operators and the ground has been generally fertile for smaller, newer players arriving on the scene.

 

Given FM's brief history and rapid development, it's not surprising that many people found themselves in the industry, having started elsewhere – often with backgrounds in hotel operation, engineering, property management or general admin services. As FM has made some gains in recognition, both as a management discipline and for the value it contributes to business operations, many practitioners have come to see themselves as FM professionals and to expect to be recognised as such.

 

Success in achieving real recognition has often seemed to be held back by several factors: confusion about the definition of FM and its role in management; the absence of any formal training standards and thus the mix of individual credentials ranging from none to higher degrees; the absence of a single professional institute focused on backing up the claim of professionalism; the lack of concerted promotion and support for the discipline and its practitioners in the wider business and public arenas.

 

Whether or not FM counts as a profession remains debatable; it's also an issue that elicits strong views on all sides. We do seem to be on a path towards greater professionalisation. Some would argue it's been a long time coming, but the general trend of development at the BIFM in recent years contributes to this; and its most recent moves on qualifications and membership structure seem focused on this target (see Theme 6). At the same time, the FMA appears to be finding new energy for its industry promotion role.

 

For much of the past 10 years FM has seemed to be a business dominated by white men of a certain age. Happily, this is clearly changing. More should be done to encourage the trend, and moves over the past year to increase the routes into FM for young people are certainly welcome. The FMA's groundbreaking promotional DVD, produced and distributed to colleges in 2005, in a sense opened the way for the career mapping exercises that Asset Skills has carried out, which in turn has contributed to the development of a new apprenticeship scheme and the BIFM's level 3 initiative. All good stuff, though some may say a long time coming (see Theme 5).

 

The BIFM is also moving to resolve the longstanding difficulty over qualifications. Its BIFM qual programme, meant as a mark of professionalism, never took off; and there has always been a substantial drop-out rate at the lower point, between Levels I and II. Those facts, combined with past membership policies, have resulted in a designation, MBIFM, which confirms membership but says nothing about qualification. Of the two other post-nomial options available, the IFMA CFM continues to have only a couple of dozen holders in the UK and the FMA's tie-up with the Chartered Management Institute, though still an initiative to be applauded, appears to have had no more than two or three takers.

 

This year's move to create the CBIFM (C for certified) is part of a wider shift towards a solution to the problem. In addition, current Chairman Iain Murray has told i-FM he is ready to throw his weight behind a serious look at pursuing Chartered status for the Institute. Now, that should be interesting.

 

A consistent lament over the past decade has been the difficulty of finding sufficient good, skilled people to fill the jobs in this growing industry – especially young people (see Theme 6). That's a good thing in some ways: it's a sure sign that the industry is growing; and it has also encouraged many employers to develop their own training programmes, many of which are really quite effective.

 

Professional trainers have been arguing for years the value of such programmes, and over the past two years or so they have been arguing against deep cuts in them. High staff turnover is not an unusual thing in this industry, though voluntary moves are far less common these days. Research by business advisors Deloitte suggests that as we come out of recession there may be a job-change boom, with many trained and experienced people looking for new opportunities. The way to counteract such a potential exodus, they say, is to keep the development programme fresh, positioning the organisation as an employer that is as interesting and ambitious as the employee.

 

In the earliest days, the well-rounded FM needed to know something about a vast range of topics. Increasingly, he or she needs also to know something about the compliance requirements associated with a growing range of rules and regulations. From the 'simple' days when health & safety and HR law were the main areas of concern, we have moved into a context where the FM needs at least a passing familiarity with regulations on energy, the environment, waste, security, data protection, food safety, building design, physical access – plus the added regulations that can apply to particular business sectors: confidentiality, data security, business continuity and more. The list isn't exactly endless, but it is certainly long and seems set for continued growth. This is one reason why the Workplace Law group has found a strong demand for its annual FM Legal Update conference every year for the past 10 years. If there is one thing FMs need, it's good, concise, accurate and up-to-date information.

 

Readers of our anniversary news round-up – 10 Years of FM on i-FM – will recall that when we launched in 1999 there was a fair bit of scepticism around about the future value of the internet. That's been more than laid to rest, of course, and the service provider who is not now making good use of web-based systems to manage, monitor and report on activities is likely to be lumped into the category of 'dinosaur'. This rapid development and implementation of new systems has been good for the industry, delivering more timely and accurate information for better decision-making.

 

A look back at the winners of the i-FM e-business award over the years highlights an increasingly sophisticated approach to solving a range of common FM challenges under the headings of asset management, resource allocation, and data capture and reporting.

 

Interestingly, it is in presenting a 'public face' that the industry has been less consistent in its embrace of what new technology has to offer. We've been critical about the relative lack of sophistication in some parts of the sector when it comes to web presence: there's no excuse for a boring website that looks increasingly as though it has been ignored since the day it went up. Happily, most companies seem to have got the message – though we continue to maintain that the technology keeps moving on and utilisation of the web should do so, too.

 

The public sector outsourcing market generally, and the FM services segment in particular, is less developed than the private sector market. There are a variety of reasons for this; one is that private sector suppliers have by and large been content with their positioning and saw little reason to try to push into new, unfamiliar territory. At the same time, those opportunities which seemed most open to FM providers were in PFI, and more recently Building Schools for the Future, projects; but these have their own limitations, not least the time and cost involved in developing bids.

 

With the arrival of the credit crunch and our subsequent slide into recession, more than a few providers looked at big public sector players like Serco and Interserve with some envy. These, and others with contracts under well-funded programmes such as social housing, seemed to have the luxury of being in 'defensible' markets that would provide some protection from economic downturn. Not surprisingly, 'public sector' started to appear frequently on the business development target list at many providers; and the evidence suggests such contracts are more hotly contested these days.

 

But there may be a problem. Yes, both central and local government departments are under considerable pressure to make better use of resources and improve operational performance. But, the resources generated by tax and other income are much reduced, which is likely to have an impact on spending programmes and which may also lead to some reluctance to experiment with new outsource solutions. How the public sector market shapes up over the next several years will be an interesting process to watch.