We know that there is such a thing as long time and short time, particularly in business, even if over the last ten years or so there has been a paradigm shift: long time no longer seems to be disappearing in favour of short, or even very short, time.
The pace of consumption and production, programmed obsolescence and economic models all play a major role in these changes. While this may make sense from a financial point of view, it is becoming increasingly difficult to think in the long term in the field of facility management (FM) and, more surprisingly, in the property sector.
These two fields are working on investments that range from a minimum of 5 years for certain FM contracts to more than 20-30, or even 50, years for construction projects.
However, the trend shows that companies’ senior management are reluctant to take on business for such long periods. The monitoring of core business often requires rapid processing, either in days, months or quarters, and much more rarely in years.
In the field of facilities management, this tendency to work on a short-term basis has direct and indirect consequences, but also offers opportunities.
Some examples of changes to be made:
• Outsourcing certain activities to increase the scope for variations in workloads (much less easy with in-house staff).
• Modify maintenance rates to suit shorter durations.
• Change maintenance rhythms, or even switch from preventive mode to reactive mode if this is possible in terms of risk.
• Sign 5-7 years framework contracts, but with annual exit and/or modification clauses.
• Introduce ‘volume fluctuation authorisations’ into contracts so that penalties do not have to be paid when the time comes.
• Modulate contracts so that they can be combined with others (bundle principle) to take advantage of synergies.
• In some cases, not buying the infrastructure but renting or leasing it.
However, these measures must be integrated into a coherent whole, and must not artificially increase the internal costs of managing these “opportunities”.
It is therefore essential to have specialists with a holistic view of facility management and a sound understanding of economics. This is often where the problem lies, because many companies work according to a model that considers back-office functions to be of little importance, and therefore not to be valued economically.
This is a costly mistake for the companies concerned, but the dilution of the costs involved means that nobody attaches any importance to them . Going back to the long term is not necessarily desirable, if not impossible. So, we must learn to deal with the new circumstances and, as FM specialists, provide ‘global’ expertise.
The corporate property sector (we’re not talking about investors or the rental sector) is also affected by these ‘short-term’ approaches, and is no exception to the rule, except - understandably enough - in the heavy industry and manufacturing sectors. But even in this area, some groups are opting for ‘all-in’ rental or leasing, which just goes to show how volatile we have become.
Happy reading and see you soon