Early involvement in concept design; using long-life products and water- and energy-saving devices; waste separation; and investment in training are some of the top strategies facility management firms are using or recommending to reduce operational costs across the GCC markets.
The FM industry in Saudi Arabia is poised to grow between 10% and 20% in 2013, according to a leading industry head. "However, UAE, Qatar and other GCC countries will see a 5% to 10% growth," said Markus Oberlin, chief executive at Farnek Avireal.
The Dubai Chamber of Commerce estimated that outsourced FM in the UAE is expected to generate revenues of up to USD 8 billion by 2013. Moreover, a report on the Middle East FM market by consultancy Frost & Sullivan estimates that the Gulf sector is expected to gross revenues worth more than USD 4.2 billion in 2012, driven mainly driven by demand from Saudi Arabia, Qatar and the UAE. "So it is quite apparent that business opportunity in the region is thriving," said Oberlin.
MAF Dalkia chief executive Alexandre Mussallam agrees. He said his company, which is fully operational in the UAE, Saudi Arabia, Bahrain and Oman, is now eyeing new markets. "We are targeting Qatar, Kuwait and Lebanon. Nevertheless, we can confirm that the FM industry continues to demand higher standards in terms of performance. And we invest time in educating the client on contracts and current international standards," he said. "The market is on an expansion mode and new projects are being announced in Qatar, Saudi Arabia and the UAE as well as in Kuwait and Oman."
While business is expanding, social media is also playing a vital role in business expansion plans. "Dedicated professionals can manage online presence daily and conduct 'fire-fighting' to react to any problems in real-time by using social media tools," said Mick Dalton, IFMA Foundation liaison for the Middle East.
Social media plays the same role in FM as it does in many other industries, added Oberlin. "While LinkedIn is a good way for us to connect with our clients through a level platform and to stay informed on the key issues happening in our industry, we also find it useful for sourcing potential candidates for senior management positions."
Social media monitoring also can alert FM companies about "competitors' and customers' online activities - when customized into weekly and monthly alerts," added Dalton.
Dalton expects to see more legislation on energy management in 2013. So while business is brisk, tighter budgets call for different measures than those employed during boom times. Zawya's conversations with industry heads resulted in eight clear strategies that can be applied to reduce FM operational costs.
1. Get involved from the start: Involve FM companies in the early design stages of a building, say experts. "Early involvement at the concept design stage and then monitoring installations during the construction phase to match operational requirements remains a top strategy for FM companies," said Musallam. "The earlier we are involved, the more savings we recommend and future operations become easier."
Dalton agrees: "If FM is not involved at the concept stage, the designers will make many mistakes, which will cost the owners and clients much more during the life-cycle of the building. Up to 20% of operating costs can be ironed out by getting FM involved at concept design stage rather than during the handover phase."
His advice includes being careful with the selection of marble and glass finishes. "Black marble is a no-no in a reception area as it needs constant cleaning. Wrong colors need frequent cleaning and painting. Wooden furniture around the pool needs staining every three months while wrong furniture in the reception area makes it very difficult for FM work," he said.
"Also, waste removal and recycling needs to be built into the design from the start. Usually, waste collection areas are designed in the car park area where waste trucks cannot enter. This means that staff has to push the waste skip to the ground floor. Recycling points are not considered and it is messy to install them after a building is completed."
2. Reduce carbon emissions: A tower can implement certain measurement of performance tools such as the optimizer technology. "Participants can calculate their CO2 emissions, including the financial cost, which enables them to track their performance of energy and water consumption as well as non-recyclable waste production. Until now, the market lacked a work tool that enabled energy and material flows to be compiled, analyzed and benchmarked in a simple manner. The optimizer tool tackles precisely that function. It provides an easy and effortless means of bringing energy cost-saving potential to light," said Oberlin.
He also warned that "energy saving systems" that look good in brochures might not work in this market. "Some products that may be excellent in Europe will not be able to cope with the summer weather conditions," he said. "This can lead to very expensive replacement procedures and inconvenience tenants. There are also very advanced technologies that are difficult to operate and also expensive in the long-term life cycle."
3. Install long-life savers: "We installed LED lights and energy saving modules in our offices. But the focus is not on one single activity. A comprehensive sustainability approach should encompass the many different aspects of a company's strategy," said Oberlin.
Dalton believes there is value in incorporating energy efficiency from the outset by selecting high energy-efficient ratio (EER) air-conditioning, LED lighting, and variable frequency drives (VFDs) on pumps and fans. "If added at the design stage, these measures can save up to 5% on energy and operating costs. Simple water-saving devices fitted to taps in sinks and baths can save up to 30% on water usage and operating costs. Change the AC settings for unoccupied floors and reduce the frequency of cleaning and maintenance to match occupancy levels," he recommended.
"Ensure that lighting controls are installed in car parks, use CCTV and access control to reduce security costs and use maintenance-free landscaping methods."
Make energy awareness a necessary process within the operational team, added Mussallam. "We measure and examine the energy usage in each project. Most of our clients are already coupling FM contracts with energy saving contracts," he said.
4. Separate waste: Introduce recycling to reduce landfill costs, said Dalton. "Landfill costs are rising. So the more we recycle, the lower the costs for landfill and better sustainable development," he said.
Oberlin said separating waste can result in payback on paper and cans. "We collect and separate waste. Alongside our advanced GPS system, we also advise that our drivers should constantly check tire pressure to reduce petrol consumption. It is also likely that the municipality will implement higher fees for waste disposal at some point. So it is advisable to put a procedure in place sooner rather than later," he said, adding that there are a number of recycling facilities in Dubai.
5. Incentivize stakeholders: "Develop incentive programs that are a win-win for the customer and the service provider. We have started to roll out our internet -based energy optimizers to our customers to provide greater transparency with their energy consumption and carbon footprint, as well as benchmarks and potential savings," said Oberlin.
The customer looks beyond environmental impact. "It is more and more business-driven since the Dubai Electricity and Water Authority tariffs saw a significant increase in January 2011, when electricity charges rose from 20 fils to 23 fils per kilowatt hour (KWh) for monthly consumption below 2,000 KWh and from 33 fils to 38 fils per KWh for consumption of more than 6,000 KWh per month," he noted.
"Currently, one ton of used cardboard can be sold for approximately AED 600. When segregating paper and cardboard from other types of rubbish, it is important to make sure that liquids, food and even dirty paper are kept separate - as they will usually end up in a landfill."
6. Purchase in bulk: Try to cluster the material that needs to be purchased to get better prices from suppliers, said Oberlin.
7. Invest in staff: Develop the health and safety process. "Couple this with continuous auditing/training on the job process for health and safety awareness. This is one of the most important strategies. Investing in the human factor is valuable for business," said Mussallam.
8. Raise the bar on benchmarking: "In 2013, the market will definitely witness more performance-based contracts with KPIs (key performance indicators) and SLAs (service level agreements)," said Dalton.
Mussallam added: "Also include international benchmarking systems and standards in implementing a reasonable SLA and KPI. This helps to set budgets that match international best practice. The competition is no longer about who delivers a service at the lowest price but who delivers the service while maintaining many of the other aspects within the delivery."
© Zawya 2012
