"Corporate America is rethinking its approach to facilities infrastructure, with an increasing number of companies concluding that outsourcing makes sense as a way to cut costs and focus on revenue-generating core competencies," said Frost & Sullivan industry manager Sanjiv Bhaskar.
The need for expert professional maintenance of sophisticated HVAC, data communications systems, and constant replacement cycles is likely to benefit facility service providers. "Often times, service providers and maintenance contractors reach a stalemate due to sticky contract-related issues," added Bhaskar. "In these cases, a mutually satisfactory resolution is essential in order for the contract to proceed smoothly."
Currently, single service suppliers appear to be the preferred option since the client is able to perceive tangible benefits of specific operations rather than a broad-base of services. "Despite the current trend, acquisitions and consolidations is spawning a new breed of providers with multi-service capabilities and a global presence," said Bhaskar. "These providers have numerous opportunities to target large global corporations in need of multiple property management, tenant representation, and infrastructure maintenance services."
Consolidation can help integrated facilities management service companies to better meet the needs of their customers as well as provide a significant cost advantage in a competitive and thin-margin business. "The ability to provide a bundled solution individually or through alliances is likely to be a strong competitive factor," added Bhaskar.