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FM key in post recession economy

22 April 2010

Returning to a London venue, the BIFM conference last week heard that the FM sector is part of the ‘knowledge economy’ that will drive the UK in a new and innovative business ‘architecture.

Will Hutton’s conference  address in the Hugh Channon Memorial Lecture. Entitled The Changing World, the Workplace Foundation’s  Hutton revealed to the 100 or so delegates the he had presented these same arguments to policy makers, financiers and politicians. “Business to business services, and the creative, cultural and high tech sectors are the key sectors for the recovery,” he said
Hutton explained his view that the internet a ‘general purpose technology’ and like other GPT’s like the wheel and steam power from the past, it has ‘transformational consequences’. “If we get this right it could be the second industrial revolution in the UK,” he claimed. “Business to business services, and the creative, cultural and high tech sectors are the key sectors to build the new  ‘innovation architecture’. FM is part of the knowledge economy, and in  the 2010s it is the knowledge economy will lead the country out of recession. The knowledge economy has the skills and innovative potential which is key to competitive advantage,“he concluded.
A panel discussion hosted by broadcaster, Kirsty Lang, entitled Private v Public Procurement was a sober reflection of the reality of doing business in FM.  The economic downturn had, the panelists confirmed, threatened longer term and innovative contract relationships based on high levels of trust.   Steve Agg, CEO of the Chartered Institute of Transport and Logistics (CITL) said: “A key element in the procurement process is trust that leaves room for innovative thinking. However the recession has encouraged transactions that ‘beat up’ the supplier.  We need partnerships built on trust  where we all gain.”
Considering PFI contracts, Paul Franklin of PA Consultancy said, “PFIs were devised to reduce the public borrowing requirement overnight but now this strategy looks shortsighted.”  Alan Soper, MD Ian Williams agreed: “PFIs mortgaged the future but also transferred risk to an outsourced supplier which is a valid and sensible way to engage the private sector in the public sector. However, the political component presents difficulties in the built environment as the political horizon is just five years, compared to PFI contracts at about 25 years and the 40 year life of buildings that span several Parliaments. More intelligent clients are thinking in the longer term for procurement.”
On the ‘fringe’ of the conference, BIFM International SIG’s fun Pecha Kucha  event featured FM’s intellectual heavyweights, Oliver Jones and Lionel Prodgers v  Nick O’Donnell and Alexi Marmot.  The  ‘20 slides and 20 seconds’ format lent itself to a rapid fire debate on the proposal that “There should be no place for an intelligent client in the post recession world.” Clearly neither the speakers nor the audience seriously believed the proposition to be true but examing the pros and cons was enlightening.
Kicking off for the proposers, Nick O’Donell, Head of Real Estate at the FT questioned whether the client actually added value. He speculated that there was a market opportunity of a ‘Rynair’ model for FM offering no frills and no customer service at a discount price  Backed up by Alexi Marmot, AMA Associations and UCL, she questioned the term ‘intelligent’  since, she said,  many buildings are not intelligently run, and world resources have been unintelligently used.
Oliver Jones pitching against the propostion argued that in a post recession world, “The show must go on and it does change management basics.” He argued, “We can’t operate in a vacuum …  smart teams win, loners lose.”  Lionel Prodgers, Agents4FM, concurred saying, “FM ‘hell’ would be created without an intelligent client.. Without an intelligent client all the good work we have done to date in FM will be taken away.”
However, it was the wit from the floor who had the final word. “Without the intelligent client we can’t blame anyone!” he said.


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