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FM Long Distance

15 February 2005

Meeting in a transcontinental video conference, Britons and Australians discussed the attributes and development of their respective FM sectors, PPP/PFI and IT for FMs in a wide ranging debate. Jane Fenwick reports on the debate

Within just two decades, the ideas and techniques of facilities management have spread across the continents of the world, with the US, the UK and Australia as leading proponents. In April 2004, the BIFM (UK), IFMA (USA) and FMA (Australia) signed an International Memorandum of Understanding to promote and share knowledge and support worldwide standards for FM as a professional business sector.

Regular dialogues have been set up between the associations. Broadening these contacts to a wider membership is an aim of the international understanding, and so it was on a winter’s dawn in Putney and summer dusk in Melbourne that two continents met across a video link.

Hosted by FM software developers, Serviceworks, which has offices in London and Australia, the video conference debate turned first to consideration of the forces bearing on each country’s FM sector. The Australian FM sector has seen a rapid growth in recent years and is now a major industry with a value of Australian $60bn representing 4 per cent of the country’s GDP

Energy markets
In the UK, where FM is regarded as a mature industry, the major ‘driving forces’ in order of importance are, Ian Fielder suggested, client organisations, government and its growing understanding of what FM can do for business, increasing coverage in the press of FM issues, various professional institutes including the BIFM, and finally the efforts of individuals in the FM sector. Mike Liddle also pointed to the growing acceptance of PFI/PPP strategies not only in the UK but also continental European countries such as Spain, Italy and Portugal. He concluded that while PPP projects are still in their infancy, the debate is bringing FM up several national agendas. He said that European countries are adapting the PPP process to their own needs and political environments and are watching the mistakes made in the UK . “They can be expected to take just 12 months and not the 12-15years in the UK took to develop its projects,” he commented. “These emerging markets will be there is just a couple of years, and even in Australia, it is much closer than you

Jonathan Tyler contended, “In the last five years PPP has emerged and expanded in Australia and we see exciting times ahead. However, construction companies have jumped west, its important resources industry sector is located far from these centres of population. This makes it harder to gain the economies of scale and efficiencies developed in the more densely populated UK.

Attempts to transplant UK based FM operations on the continent have not developed and companies, such as Serco, have withdrawn. However, significant Australian FM companies have developed, among them Spotless, a major outsourcing contractor and services company. It employs 27,000 people worldwide with more than 20,000 private and public sector clients in Australia and New Zealand, and offices also in Thailand, United Emirates, Bangladesh, Sri Lanka, South Africa and Morocco. With ABN Amro it has been successful bidding for PPP projects, including one of the first socialinfrastructure PPP projects to build and maintain nine schools in and around Sydney. This 30 year contract sees Spotless Property & Facilities division providing a range of services to the schools. Other companies in the Australian FM sector include soft services provider, Tempo, outsourcing contractor and property management company, United KFPW, and Advance Technologies which is headed by ex-Serco, Richard White.

UK model
Unlike European countries that appear to be forging their own politically acceptable PPP strategies, the Australian model is largely transplanted from the UK, and fact that is consistent with its general approach to FM. Asked whether the Australian FM model has been influenced more by the UK or US approach to FM, or whether it was ‘homegrown’, the answer given was unequivocally that the main influences and personnel originate from the UK.

As JonathanTyler explained, “The FM sector in Australia looks a great deal to the UK, and lots of individuals within the sector have come to Australia from the UK. The UK has played a significant role in shaping the sector in Australia since most of the ideas of service delivery have been transplanted. Most meetings I go to concerning the PPP process are attended predominantly by people from the UK.”

Mike Liddle agreed that the US FM sector had developed differently from that in European countries and Australia, but he argued that there was much the UK could learn from the Australian experience. He applauded Australians whom, he said, “Are happier to move ahead quicker than we are in the UK.”

Ian Fielder also welcomed the lack of ‘silos’ in the FM and property related sectors in Australia compared to the UK which has embedded professional institutions that separate engineers, architects, surveyors from each other and from FMs. He recalled how impressed he was that engineers and architects in Australia could speak at conferences across a range of facilities issues from the environment to ergonomics, an occurrence that is much less likely in the UK.

He added, “There is a growing recognition that FM touches on all areas of business. The FM sector in the UK has moved on from wanting to be recognised on the board. FM is recognised as the ‘matrix that makes things happen’. Businesses that want to change, upsize, downsize and to merge in particular, rely on their facilities organisations, be they in house or service providers, in this process. This approach has more in common with the UK and Australia than with the US which is generally regarded as being several years behind in this thinking.”

John Tyler explained that with a small FM population in Australia people in the FM sector, have of necessity to understand a broad range of issues. It was also an Australian trait he said, “to take and idea and see if it works,” an approach that has contributed to the ability of the Australian FM sector to move ahead more quickly than in more mature markets such as the UK.

Ian Fielder also congratulated the FMA in its success in gaining recognition for FM at government level, something that the FM sector in UK has up to now, largely failed to achieve despite its heavy involvement in the Government’s PFI/PPP strategy for more than a decade. He recognised that the UK had much to learn from the FMA’s success in getting FM recognised by Government as a distinct and measurable business sector.

Speaking after just four weeks after taking over as CEO of the FMA, Karen Hill explained that the FMA had lobbied for FM to be included in the Australian Government’s Action Agenda, a programme that identifies industry sectors and sets development plans and visions for the future (see left). The outcome is due to be announced next month. “Twenty action items have been identified, “ Karen Hill explained, “ and this will go a long way to increasing the profile of FM in Australia.”

She identified weaknesses in the Australian education and training provision for FMs, and John Tyler criticised Australian FM companies who had not invested enough in the skills of the people who delivery and manage FM services. However, he pointed out that, “A strength of our industry is that we draw on individuals from other disciplines such as finance and HR, and this has given FM fresh ideas and processes.”

Although geographically a world apart, and linked by technology, there was a common recognition of the importance of IT in the development of FM services and management. As Gary Watkins observed, “The visibility that FM technology brings can develop the trust in the relationship between client and supplier. This fact has driven the FM IT market.”

There was agreement that trying to ‘bend’ SAP or Oracle finance and business tools to serve FM was not effective in either country, but many client organisations failed to understand that their business processes have to be allie to their FM software selection. Martin Warner said IT is key to providing effective operational support and enabling FM providers to give more management support and business related information to its clients. However, in Australia where shorter contracts – about 3 years – are the norm, this has made getting a return on investment in FM IT systems more difficult. This has reduced the opportunity for FM service suppliers to provide the business information that helps to build the trust that underpins partnering relationships. It is a “A chicken and egg situation,” John Tyler observed.

“People tend to buy a software package that they expect to be a solution to everything,” Paul Digby commented, “but when it does not they put it on the shelf. They must first decide what they want to get out of a software solution before buying one.”

From the more mature UK market, Gary Watkins, observed that “Many customers take the easy option and adopt the service provider’s decision on software, and then once they are comfortable using the system, they take it back in house. Another development is that leading service providers are forming alliances with CAFM providers. For example, Carillion with FSI (FM Solutions) and Johnson Controls with Maximo.

There is undoubtedly a lack of understanding in both markets on CAFM systems. Richard Byatt commented that questions on IT and CAFM were the most numerous on the BIFM website. “There is room for ‘honest broker’ advice from the industry for the membership and the wider community on the appropriate use of IT systems in FM,” he said.

With technology a topic that was highlight for further discussion, the video conference ended, but with the promise of more transcontinental link ups to follow.

In Mebourne
Karen Hill, CEO FMA Jonathan Tyler, Director Serviceworks Australia Paul Digby, FM Consultant Martin Warner, Technical Director, Serviceworks International

In Putney
Ian Fielder, CEO BIFM Gary Watkins, MD Serviceworks Mike Liddle, President IFMA Europe and FM Consultant Richard Byatt, Communications and External Affairs, BIFM

Facilities Management Action Agenda
The Australian Minster for Industry, Tourism and Resources announced the Facilities Management Action Agenda in January 2004 to identify a vision for the FM industry and to set the direction for its longer term development. The Action Agenda will ultimately, the FMA says, facilitate greater awareness within business and the wider community about the benefits of managing the physical work environment strategically.

The FMA submitted a five pronged approach to developing the FM industry: Innovation: Improved understanding of how a facility’s construction impacts on its operation, greater understanding of the key drivers of workplace productivity and the improved application of information technology.

Education and training: Improving access to dedicated FM education and training opportunities. This will ensure school leavers can aspire to a career in FM and have clear pathways into the profession.

Sustainability: Better access to existing knowledge and the development of tools and opportunities to improve the environmental performance of Australian facilities.

Regulation reform: Explore opportunities to harmonise State regulations that have an FM impact.

Working groups on each of these subject areas and a fifth one, covering Industry recognition, have been established. A report is being prepared on the size and profile of the FM industry which will be presented with the Action Agenda outcomes in early 2005.

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