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Frost & Sullivan: Hard and Soft Services Score Over Value-added Services in the North American IFM Market
Cost savings prove to be the biggest draw for end users
MOUNTAIN VIEW, Calif. – Dec. 19, 2013 – Integrated facilities management’s (IFM’s) obvious benefits of cost and resource savings, have allowed service providers to break organizations’ resistance to external support for the maintenance and upkeep of their physical assets. While FM suppliers merely focus on the delivery of bundled FM services, IFM spans multiple services, which give it an edge.
New analysis from Frost & Sullivan’s (http://www.energy.frost.com), Analysis of the North American Integrated Facilities Management Services Market research, finds that the market earned revenues of $29.95 billion in 2012 and estimates this to reach $40.51 billion in 2018. The study covers the service segments of building operations and maintenance (O&M), support services, property management, IT & telecommunications, environmental management and energy management.
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The recent economic slowdown and consequent pressure on margins, has compelled many organizations to consider outsourcing services to an IFM provider. Apart from cost savings, hiring IFM specialists will substantially improve facility management efficiencies, while freeing up resources to focus on core competencies.
While the cost benefits are undisputed, several organizations such as data centers, financial brokers and even laboratories, are still hesitant to relinquish control over critical operations. Unless they are entirely convinced about the competence of the IFM providers, they prefer to keep vital services in-house or outsource them partially.
Some organizations have apprehensions about the effectiveness of IFM companies, with a background in soft FM undertaking hard FM services. This issue is intensifying due to small- and mid-sized IFM companies broadening their service array as well as the recent influx of foreign IFM companies with strong competence in soft FM services.
“Domestic participants can attempt to stave off competition by addressing clients’ demands for sustainability and improvements in data analytics,” said Frost & Sullivan Energy & Environmental Research Analyst Pramod Dibble. “Although hard and soft, rather than value-added, IFM services dominate the market, accounting for 78 percent of revenues, there is growing demand for value-added services, especially in IT & telecom and energy service segments.”
While the IFM market has traditionally catered to the requirements of commercial clients, the rising need to lower costs, improve efficiencies, divest non-core activities and benefit from the savings offered by a single FM supplier has led to greater demand from other client groups. In the last decade, the market has experienced a surge in interest from industrial, retail, healthcare and public sector organizations, and this list is set to expand in future.
“Although the North American IFM market is well developed, there are still considerable opportunities for participants as medium-sized commercial organizations as well as vertical segments such as industrial and healthcare are embracing the IFM concept,” noted Dibble. “Developing and maintaining a track record of excellence in a variety of service categories, while keeping client costs low, appears to be a fail-proof strategy in the current market.”
Analysis of the North American Integrated Facilities Management Services Market is part of the Building Management Technologies Growth Partnership Service program. Frost & Sullivan’s related research services include: Understanding the Growth Potential within the Building Technologies Market, Analysis of the North American Geothermal Heating and Cooling Market, European Lighting Control Systems Market, and Asia-Pacific Buildings Sector: Macro to Micro Implications of Mega Trends to 2025. All research services included in subscriptions provide detailed market opportunities and industry trends evaluated following extensive interviews with market participants.
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