02 August 2011
A fully integrated approach to FM is different from just expanding the service offering, as Sodexo’s Managing Director Neil Murray explained to Jane Fenwick.
MORE IS BEING DEMANDED OF THE FM SECTOR now than at any time in its history. While there is a challenging economic climate at home, there is also a huge opportunity for integration of services across organisations wherever they are in the world. Capturing that opportunity and delivering quality and consistency across all clients and geographies is the task facing leading FM companies such as Sodexo.
In just a few years, Sodexo has transformed its business from one that was based on its catering offering to one that sees less than half its £1bn revenues coming from catering-only contracts. Sodexo has moved towards ‘comprehensive service solutions’, which as Neil Murray, managing director of its corporate services and integrated facilities management business, explained is different from just offering a full range of FM services.
He explained that the integration of services developed by Sodexo is not about bolting on various other services onto its core food offering. He expanded: “Ten years ago we got involved in PFI contracts in hospitals, prisons and schools, and we deliver the full range of services including the traditional hard services. From about 2009, we have worked hard to build excellence in every discipline in what we do and then bring them together into a fully integrated offering, where we design, manage and deliver services.”
When Murray arrived from GSH in 2009 to head up its FM business, he was recruited as part of a restructure that brought Sodexo’s hard FM services into the company’s core offering. Murray came with an engineering degree and background that included working at GSH’s operations in the USA. He quickly learned the benefits of Sodexo’s customer focused culture. He observed: “It is easier to underpin a soft service business that is customer focused with the discipline required for the delivery of quality integrated services, than it is to shift a more infrastructure-focussed organisation to become customer focussed. In my early career I thought that the engineers worked in the most critical and important aspect of FM, but I quickly realised that while what they do is very important, front of house services are equally as important.”
Achieving’ integrated services’ is not, as Murray was keen to explain, just traditional ‘bundling’ of services. In Sodexo a key ‘glue’ in a company that is structured with vertical market segments such as healthcare, education and defence, whilst delivering consistency and quality across them all, are its centres of excellence. These centres of excellence provide the best in class quality standards, compliance and training for each service in every service line and contract, and in every one of the 80 countries that Sodexo now operates.
Central to this strategy has been the move just a couple of months ago, of all its offices in southern England into new offices at One Southampton Row in central London. Another 400 of the 40,000 Sodexo people worldwide are in Salford operating shared service functions such as the central help desk, payroll and accounts.
These changes in Sodexo reflect changes in the market. Murray believes that in recent years executives’ minds are more open to understanding that a fully integrated approach to FM can affect the quality of daily life of the occupants of buildings. As Murray explained: “We are all under pressure to reduce costs but we can also create value. The Sodexo management team is measured on employee engagement. We believe that people have about 30 percent of themselves that they choose to leave at home in the morning - or not - depending on how engaged they are. In a business like ours that is so people intensive, that engagement factor is huge for us. So how we engage with our people goes right through our organisation, and that mindset can help our clients. Yes, we deliver FM services - but we can do so much more.”
Sodexo has been able to develop its integrated services business from its existing clients as well as new ones. Catering is still a growing business and core to the integrated offering. Typical is Pilkington, which for more than 20 years was a food only contract, but Sodexo now delivers a full range of integrated services to its eight locations including hard services in the manufacturing environment.
Sodexo now services clients businesses in a total of 80 countries and it self-delivers the bulk of services. “Five of my top ten largest global clients have a global perspective or are making progress towards one. For example, one of our largest UK pharmaceutical clients has just awarded us an integrated service contract in China, as a direct result of our UK relationship.
This also demonstrates that the speed of growth is fastest in the ‘BRIC’ nations,” Murray explained. “We grew up as a decentralised organisation with a lot of autonomy at country level but bound together by a common set of values. We have had to learn to work collaboratively, to build robust governance frameworks to make things happen in the same way all over the globe. Organisations that are contracting with us are not very centralised themselves and are using FM as the catalyst towards centralising their operations.”
FM can also have a transformational role when it is at the centre of the real estate function. “FM is the repository for all information pertaining to the real estate portfolio. Data that comes into the help desk on cost of occupancy can be converted into knowledge for the estates and capital planning functions. It is important that we take that responsibility seriously as it has the ability to drive the entire real estate strategy of our clients,” commented Murray.
With about half of its business in the public sector in education, defence, hospitals and justice services, Sodexo might have some cause for concern as the Government reviews all its activities and costs. Murray, however, sees this ‘consultative’ period as an opportunity. “Government is reaching out to the industry for our help. Some departments have re-tendered contracts in different ways, and there has been integration of services, leveraging of portfolios, cross-departmental contracting and sharing of resources and back offices. PFI can’t be excluded from the challenges that the Government and industry are facing. Long contracts will not stay the same over their term. We have to build models that are agile and adapt quickly to changing client needs. We need to adapt and flex with our clients and we need contracts that do that. PFI’s don’t need to be so rigid – a 25-year contract that does not reflect changes is unworkable. So, as an industry, we are more than comfortable to revisit these contracts.”
Change has been on the menu at Sodexo since before Murray joined, and it has gathered pace. Building the structure and processes to manage this change across a business that delivers critical services of a high and consistent, measurable quality equally to the Children’s Hospital in Manchester as to prisoners, school children and to business clients, has been Murray’s focus. He is particularly proud of seeing the vision of the centres of excellence model coming to life, and the overcoming of market perceptions of Sodexo as a ‘catering’ company. “We are not leaving food behind. It is important to us and at the centre of our culture,” commented Murray, “but I think it is a fantastic cornerstone on which to build the integrated offer. The journey is not finished and the key to development is absolute excellence in everything we do.”
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