Why focussing on asset life, the environment, and ROI is key to changing the value perception equation
The redefining of real value is a business imperative for any company operating in the current shifting regional economic landscape.
At ENGIE Cofely, we believe this hinges on changing traditional perceptions and realigning true value through a three-pronged stakeholder strategy. In our world of facilities management (FM), this means looking beyond the ‘here and now’ and instead focusing on the life cycle of an asset, external environmental factors and that all-important ROI.
In short, it’s all about finding long-term solutions to generate a greater ROI, instead of short-term fixes that still deliver a solution but that may come with a higher price to your business down the line.
This isn’t only relevant to the FM industry. Across the region, professional competencies and innovation driven solutions are being executed to the highest international standards, and even setting new global industry benchmarks.
Putting value into perspective
If we use our industry as an example, global warming coupled with rising energy tariffs is clearly driving new energy regulations as the inevitable transition to the adoption of renewable and alternative energy solutions gains momentum.
Societal transformation is also placing increased pressure on city infrastructure to attract, accommodate and support rising populations in a more efficient manner. While this is a future ‘given’, the gradual shift in need and mindset is piling on the economic pressure as the search for best value, high quality solutions plays out.
We are also seeing increased alignment in client functions. A sharper focus on ROI, the rise in regional energy company service (ESCO) projects, a growing need for real estate developers to differentiate against fierce competition, and the rapid development of energy and asset-intensive industry sectors are collectively playing their part in driving new value perceptions.
And this is the foundation for meeting these challenges from a complete infrastructure solution perspective, where experience, innovation and competencies are key.
The role of procurement in realising true value
While this is a hugely positive trend, it is still confined to certain pockets of excellence – those clients who have the ability to categorise their non-core business objectives within a flexible outsourcing strategy, and can integrate business support requirements with operational criticality, clear-cut environmental goals, objective life-cycle planning and commitment to technological innovation.
We believe that the client procurement function in this region is pivotal in fast-tracking and redefining value. Your procurement team leads the way in evaluating and putting into practice what the market has to offer and is an advocate for the benefits that a value solution will deliver – from financial savings to increased operational excellence.
The buyer is the face of the client, whose role is to proactively and purposefully engage with potential suppliers to source value services in line with the company’s strategic objectives.
It is the role of the supplier to showcase innovative competencies and educate the client on alternative models of procuring for value solutions. If there’s no buy-in then suppliers will continue to respond to the same cyclical and often prescriptive scopes – and perceptions will remain the same, with value opportunities stuck in limbo.
Allying the industry to change market perception
Ultimately, we are accountable for driving down our own industry costs. Here, we see our regional competitors as key allies in improving overall perception of both our industry and the long-term value we create.
A major challenge to achieving this is the legion of start-ups and ‘part timers’ that see FM – or to be frank, a basic maintenance offering – as a short-term cash cow. A general lack of industry credibility, skillset and overall competencies combines to the detriment of professional operators in presenting a false picture of industry ability and value.
Across industries, value is proven by ongoing, significant investment in people, safety, the asset life cycle, energy solutions and technology. At ENGIE Cofely, for example, we constantly look to add new value from an innovation perspective by integrating valuable skills, experience, smart service solutions, IOT, big data and artificial intelligence to optimise infrastructure and, critically, to reduce our carbon footprint.
Short-term gain equals long-term pain
Future innovation is extremely relevant, however it’s also important to focus on the present. Again, if we use FM as an example, most buildings today are designed and built with evolving, intelligent and high-quality assets, building management systems, lighting control systems, security and safety systems, and so on.
This requires billions of dollars of infrastructure investment, but the question of how we can better support the client to achieve the ROI is often ignored. Through involvement in the planning, design and build stages, the operator can bring significant value.
ROI can only be achieved by driving a holistic whole cost of ownership strategy. As a guideline, 20 per cent of the total cost of ownership relates to the design and construction stage, which has historically been the main focus across the region.
The built phase, which represents the remaining 80 per cent, is the most costly and critical and it’s here where future proofing and long-term asset life cycle planning falls through the cracks, at the expense of unveiling a shiny new building.
Overall, we believe that the regional FM and energy industry is undergoing positive transformation and will continue to do so through ongoing commitment to alignment and partnering, and the delivery of integrated asset and client-focused solutions. This will have clear benefits that will eventually reset value benchmarks for the future.
And because what works for our area of industry expertise has relevance for other businesses across the region, it is time to commit to the long term and act for a sustainable world for our children.
Vincent Montanet is chief business development officer at ENGIE Cofely