With an average Provider Performance score of 8.1, the overall conclusion of this study is that the global IFM market delivers its services in a highly valued and mature manner. This score is primarily driven by excellent valuations by client organizations on relationship and collaboration aspects within these global contracts.
Comparing the results to previous (non-global IFM) Provider Performance Survey editions (with average scores of 7.3 in 2019 and 7.5 in 2020) the scores achieved by the global FM service providers are notably higher. Although the data does not provide an explanation for this difference, the reasoning behind could be that, both based on our research and experience, global contracts are generally more aimed at basic needs such as operational excellence, where local contracts typically require more focus on value-add themes as innovation and alignment with the core business. As these value-add themes are more complex and more abstract, it is harder for global service providers to outperform on these topics without having the basic service provision firmly in place.
The outcome of the study indicates that the IFM market is able to align its service provision effectively with the needs of the client organizations. To be more precise, Operational Excellence and Relationship & Collaboration are considered to be the most important factors for successful contracts. Operational Excellence refers to being in full control of all operational activities in the service provider’s fields of expertise, while Relationship & Collaboration describes the service provider’s ability to establish a constructive and mutually beneficial relationship with the client. Interestingly, both themes are also valued best by client organizations in terms of satisfaction levels. These findings indicate that FM service providers are aware of the needs of the market and are qualified to react accordingly.
If you would randomly select and examine a contract in the global IFM market, it would be highly likely that the agreement contains at least cleaning-, maintenance- and FM management services. In nearly 95% of all cases maintenance (e.g. corrective- and preventive maintenance and/or handyman services) and cleaning (e.g. office cleaning, waste management and/or sanitary supplies) activities are included in the service provision. A logical corollary of the research methodology and scope is the incorporation of FM management services (e.g. service desk, contract management and/or site management) in the contracts. These activities are included in nearly all contracts by the FM service provider. An explanation lies in the nature of these management services, since they hold a key position in the centre of the FM organization.
Scopes in global IFM contracts are comprehensive, both in terms of geographical spread as well as the number of included services. Partially due to this geographical stretch, delivery methods (i.e. self-delivered or subcontracted) vary greatly. Still, some types of services are predominantly self-delivered, whilst others are nearly always subcontracted to third parties, mostly sourced locally. Management and hospitality activities (front-offices such as service- and reception desks), for example, are mostly performed by employees on the FM service provider’s payroll. While, on the other hand, more specialized services such as Security, Cleaning and Food services are generally subcontracted. A final factor determining the delivery method in global IFM contracts originates from the FM service provider’s own strategical preference with a spread between a strategic focus on providing a best-in-class management solution versus a strategic focus on in-house integrated operations. Throughout the market suppliers make genuine distinctive decisions in their preferred standard delivery method.
Similar to the results of previous (Dutch-based) Provider Performance Surveys executed by Hospitality Group, smaller FM service providers (in terms of workforce and revenue) tend to outperform larger ones, in terms of client satisfaction levels. These results may be unexpected due to the apparent benefits of large firms in terms of striking power, extended global presence and financial stability. These large-firm-benefits however seem to be outperformed by the traits of smaller FM service providers. The ability and willingness to act flexibly by adapting, tweaking or altering business processes towards the client’s needs, is generally speaking greater in smaller firms. Large FM service providers might have dozens of large FM contracts in their portfolios, while small ones might only have a handful. Losing one client may have severe consequences for the smaller firm and for this reason, smaller firms tend to be more willing to invest greatly in a successful contract and a good relationship. The exceptionally high score on relationship and collaboration of smaller FM service providers found in this study might support this presumption. This so-called ‘Small Firm Effect’, in which smaller firms outperform larger firms, is also proven in many other markets.
Client organizations have indicated which themes they consider most important for a successful partnership. Mastering operational excellence is considered to be the leading factor in establishing a successful contract, followed by creating and taking care of a good Relationship and Collaboration. Reporting and financial management, Alignment with the core business, Integration of services and lastly Innovation and continuous improvement follow, respectively, on a greater distance.
Hence, those who are in control of providing satisfactory operational services and who are able to build and maintain a good relationship with their client organization, tend to yield the greatest outcomes. This effect however also works the other way around, in which the absence of a good relationship and a good operational service provision by the FM service provider will be harmful to the perceived value of the contract.
The way in which client organizations value the collaboration with their FM service provider is partially determined by the consistency of performance throughout geographical regions. Global IFM contracts are operationalized in numerous countries spread over one or multiple continental regions. The ability to perform on an equivalent level throughout countries and regions has been found to be challenging. Nevertheless, the average score obtained by the FM service providers is a proper 7.5 out of 10. But there is room for improvement. Various client organizations indicated that consistency in the performance of local account management teams is lacking, partially due to regional knowledge gaps, suboptimal organizational structures (‘country silos’), cultural differences and therewith different service expectations and market maturity differences. Global FM service providers need to remain attentive to this consistency paradox in which the strive to global uniformity and specific local needs and contexts compete for tipping the scales.