INSTITUTE OF MANAGEMENT TECHNOLOGY

FACILITY AND HOUSEKEEPING MANAGEMENT

Submitted to :- Prof. S. Anantram
Submitted by : Diptiman Guha (2010067) 4/4/2012

Report on the facility management service industry

INTRODUCTION
Facility Management services imply the use of a third-party service provider to maintain part of the building facility or outsourcing the management to an organisation that executes this service professionally. It includes hard services and soft services and has application in retail and shopping malls, hotels,hos pitals, banks, corporate houses, IT and ITES companies, manufacturing firms, factories and others. Traditionally in India housekeeping in the homes is carried out by female members of the family, or in some households generally some workers are hired for housekeeping. However in offices or commercial complexes much of the housekeeping was carried out by in house staff, particularly in the case of public and government sector. However as Industry and business grew , the requirement for outsourcing continuously grew and housekeeping service providers slowly started gathering pace. Today market in India of facility management is more than Rs.300 Cr.

VALUE CHAIN AND RELATIONSHIP BUILDING

Perceived value to the client

Number of contracts

Degree of outsourcing

Value of contract

Risk sharing and mutual gain

Lifetime value to client

The relationship between client and service providers generally follow the above mentioned pattern particularly in case of B2B marketing.

DRIVERS AND CHALLENGES

DRIVERS
Boom in real estate Rise in infrastructure Growth in retail sector Growth in hospitality sector Rise in related service industry e.g. IT services, Food (61% of GDP)

CHALLENGES
Scattered manpower Unorganized segment Problem of standardization

FACILITY MANAGEMENT
Facility management can be classified into two streams of services Hard services and Soft services. Hard services are the services provided in the following fields :-

Electrical services Mechanical services Cooling of HVAC services Water management and plumbing Energy management

Soft services are the services provided in the following fields :-

Housekeeping and cleaning Safety and security services Horticulture and Landscaping projects Partying and Catering services Office support services

8 Ps OF SERVICE MARKETING PRODUCT

Facility management providers help in the maintenance and safekeeping of the facility or complexes owned for business or residential purposes.

PROMOTION
Primarily B2B marketing in the case of business complexes or commercial residential places or through ads in different media.

PRICE
Pricing depends primarily on contractual basis or in the case of B2B marketing also depends upon the service provider and customer relationship.

PLACE
To report to immediate requirements for their customer they need to make sure that the service staff can reach to the service location in due time.

PEOPLE
Frontline staff working on site will have a direct impact on perceptions. The employees need to be properly trained to handle their responsibilities.

PROCESS
With the growing phase and advent of technology and its usage at service locations(i.e. facility) companies should be more up to date or technologically sound. Their management and support processes should be synchronised with the other activities going on in the premises.

PHYSICAL ENVIROMENT
This service sector is a sector where the quality of service actually reflects by the appearance of the facility. While providing services in hospitals, laboratories etc. service providers should be cautious enough to prevent any contamination.

PRODUCTIVITY
The service provider must streamline their processes to gain competitive edge. Also implementing technology adequately larger benefits can be obtained.

PROFILE OF SOME ACTIVE COMPANIES

Multinational
ECOLAB ISS India

Indian
G4S UPDATER Services Sunrise Facility Service

ISS India
ISS is one of the worlds largest facility services provider, with market presence in Europe, Asia, U.S.A. and Australia. ISS has its operations in 53 countries and aspires to Lead Facility Services globally. ISS has more than 525,000 employees and more than 200,000 business-to-business customer. ISS Facility Services India Pvt Ltd is headquartered in Mumbai and has Operations in more than 72 cities. ISS provides a range of services in :-

Cleaning services Catering services Property services Technical services Pest Control services Support services Hospitality services Integrated facility services
ISS India operation is ISO 9001:2000 certified and have over 45,000 employees. In house training is provided to employees, additional training is also provided at ISS university and academy. Presently working on a corporate strategy Route 101 http://www.in.issworld.com/about_iss/pages/strategy.aspx

ECOLAB
Established in 1923 they started as a cleaner manufacturer. Has presence in 160 countries in the globe. Company maintains high importance to maintain quality and ethical standards. They provide worldwide support to KFC, McDonalds and Pizza Hut. They are present in 160 countries across the globe and are looking into expansion into India. The company has diversified into various other sectors like food processing, healthcare etc. they have recently acquired NALCO. The services which they provide are :-

EcoSure quality assurance evaluation Equipment Care Food Retail Solutions Food Safety Specialties Front and Back of House Housekeeping/ Laundry Pest Elimination Pool and Spa Solutions Restroom/ Vehicle Care/ Warewashing Wastewater/ Water Management/ Water Treatment

G4S
Founded in 1989, G4S India is the leading security solutions group in the country employing more than 160,000 employees with a strong network of over 200 branches and regional offices spread throughout India. Core business of security solutions diversified to Facilities Management, Aviation Security, Central Monitoring, Garment Manufacturing, Recruitment & Placement, IT, Asset Tracking and Security Consultancy. The company aims to provide one stop solution for facility management which includes from housekeeping to chauffer service. In a short period of time the company has garnered significant international presence and also being a trusted security provider adds advantage in finding new clients.

SUNRISE FACILITY SERVICES

Emerging brand based in Delhi/NCR region and started in 2001 , has an ISO 9001:2000 certification. The company believes in improving service quality and streamlining their process. The company has set chain of branches in the NCR region to gain and capture the local market and also capture big clients, some of their clients are INFOSYS, Mahindra Motors, Vodafone. They have also started as a consultancy in facility management, there services are as follows

Technical services(electrical maintenance etc.) Housekeeping services Specialized cleaning services Business support services

UPDATER SERVICES
Presently the largest company in this sector in India with more than 17500 employees. This company is based from Chennai, hence has an extensive presence in south India. They have been successful in serving clients from IT sector to manufacturing industries, Wipro, Ford Motors are some of its clients. They aim to provide services in all fields which classified as

Hard services Soft services

Hospitality services Staffing solutions

STRATEGIES ADOPTED REGIONAL CONSOLIDATION (Sunrise Facility Services, UPDATER Services)

These two companies first consolidated on the local market and captured big clients in the region from where they started.

DIVERSIFICATION ( ECOLAB, G4S )

Ecolab started as a cleaning supplier and manufacture agency and G4S initially a Security agency.

STRENGTHENING CORE-COMPETENCIES ( ISS )

This company has concentrated its efforts in increasing the level of services provided by them , constant innovation and setting benchmarks in housekeeping services has been their strategy.

STAGES OF IMPEMENTATION OF SERVICE

Tier-1 Tier-2 Tier-3

Tier-1
Top tier facility management service providers or consultants select the best vendor and manage them.

Tier-2
Building management service providers that provide their own manpower or subcontract to cleaning service providers.

Tier-3
Cleaning service providers that provide manpower.

PORTERs MODEL
THREAT OF SUBSTITUTES MEDIUM Preference to keep housekeeping in house traditional Indian household employ workers ( chaukidars and sweepers ) for housekeeping. BARGAINING POWER OF CUSTOMERS HIGH Customers pressurize to reduce the prices from time to time due to economic factors also they can switch service providers quiet easily. BARGAINING POWER OF SUPPLIERS LOW Since the equipment and supplies are standardised hence bargaining power is low. THREAT OF NEW ENTRANT MEDIUM High construction activity and economic growth has caused interest in this sector and also government hospitality service providers like IRCTC has also entered into the market. COMPETITION HIGH Judging from the abovementioned factors one can say that the competition is quite high, there are large number of players who want to capitalise into this market.

END-USER ANALYSIS
A look at other sectors that can benefit from the services. They can be categorized as follows : INDUSTRIAL Companies in oil & gas are increasingly outsourcing their facilities to facility management providers. Rising concern about energy and pollution is likely to spur the demand for facility management services focusing on energy and waste management.

RETAIL New retail places are being added up not only in metros but also in tier 1 and tier 2 cities, real estate providing rental accommodation is on the rise. Sector offers employment particularly in the soft services. HOSPITALS/HEALTHCARE Previous practices of employing in house employees for housekeeping etc has been increasingly outsourced. With the increase in size of hospitals management of facility is outsourced to decrease the workload on hospital staff. HOTEL/FOOD SERVICE INDUSTRY Hotels outsource their housekeeping set according to their standards. With the increasing advent of multinationals and opening of food chains throughout the country present very large capability in market expansion.

TRENDS
Evolving project management and general contracting services Development of facilities management training and education Investments and M&A activity in facilities management sector Growth in services sector (9.4% for 2001-10) FDI in retail and infrastructure etc. can lead to growth in industry

CONCLUSION
With ever increasing development of industry and country, facility management is developing as a fast growing industry. Gone are the days when businesses or individuals had to personally employ housekeeping staff. Service providers have lessened the burden of maintenance and also the standards are slowly increasing.

RECOMMENDATION
Service providers should constantly increase standards and reliability Political matters that hamper the growth of industry must be lessened (FDI in retail ) Growth in infrastructure should be properly captured by service providers Diversification as growth medium companies should diversify from service providers to consultants or both