A business services consultancy has given its predictions for the FM industry in 2014. Business Services Growth (BSG) says that it has identified four steps that providers need to take, to remain successful in the year ahead.
BSG is warning that FM providers should not become complacent as the economy takes an upward turn, predicting that FM service purchasing is likely to remain very procurement-driven and competitive, despite the recession lifting. Public sector outsourcing is also expected to grow, providing opportunities for larger firms.
Andrew Shaw, founder and managing director of BSG, says: “While an improving economy is optimistic for all businesses, in the FM industry specifically, a number of pressures remain, so this is not the time for providers, large or small, to take their foot off the gas. Still nursing the wounds left by the recession, FMs will continue to face the pressure of juggling a wide range of services. As a result, they will turn increasingly to their providers for those much needed added-value services. In light of this, we anticipate that margins will remain tight and competition for new contracts will be fierce, so providers should be prepared for that. They should also be aware of the changing market, such as in the public sector. As budgets remain tight, this will also provide an increase in opportunities for outsourced services.”
Latest research from BSG’s UK FM Industry Survey suggested that those suppliers that focused on the strength of their client relationships had higher levels of contract retention. Shaw believes that, because of the continued pressures felt by FMs, measuring and improving client relationships is the key to success in 2014.
Shaw adds: “Contract loss is the biggest risk for FM providers in 2014. It prevents growth and gives competitors an unnecessary advantage. So, managing clients well is the key. Our research paper this year revealed that the strongest relationships were with those providers who survey their clients and respond accordingly. This is the first step in boosting growth and will help to ensure success in a competitive market in 2014.”
On the whole, the survey says, small providers have a stronger relationship with their clients, in comparison to larger providers. However, this does not mean they are exempt from potential difficulties. In preparation for the New Year, large and small providers need to improve their client relationships. Shaw has developed a four-step programme:
Large providers should:
– Improve client management capabilities. Larger firms often find it difficult to maintain the high levels of personal service that smaller firms do, and, as a result, clients can feel neglected.
– Develop a compelling proposition for clients to bundle their services. Service bundling is one of the key sources of advantage that large firms can offer.
– Use scale to develop innovative commercial offerings. Clients want and expect innovation from their suppliers, so firms should develop innovation programmes to ensure that they are delivering new ideas to their clients.
– Strengthen bid management teams. The quality of bid responses will be a critical success factor, so it is imperative providers have a professional bid response team in place.
Smaller firms should:
– Nurture and capitalise on strong client relationships. Clients are a providers’ biggest asset and smaller firms are in a position to have a closer relationship than larger firms, so it is important that small firms all make their clients feel valued and develop their relationships with them even further.
– Make time to understand your business strengths. Providers need to conduct research amongst customers to understand fully, why they have chosen them and what they view their strengths are.
– Don’t compete where they can’t win. Define who is the ‘ideal client’ and have the courage to focus only on those opportunities that fit the profile.
– Establish an effective selling machine for identifying and winning the ‘right’ business. Look at the new business process end-to-end and make sure that you have a properly resourced approach to identifying and winning new business opportunities.
Shaw adds: “As we have seen in all industries, the best strategy for success is to understand, improve and adapt, and always with the end-user in mind. For service providers, greater engagement with clients will be the key to profit and growth for 2014 and beyond.”
For more visit: businessservicesgrowth.com
From the IT security sector: Ashish Patel, Regional Director, offers business security predictions:
“The market must be prepared to take cyber-security to the next level in 2014 by adopting comprehensive advanced threat mitigation, to protect us from the prolific cyber-attacks witnessed every day in all spheres of business and government. As the threat landscape and security space evolves in complexity, it can become overwhelming for many IT security professionals to stay on the front-foot. To ease this, there must be a shift in the next year from the point of product solutions to a more security connected platform, allowing the ability to react quickly and appropriately to new threats.
“In 2014, we anticipate there will be a shift in what defines a Next Generation Firewall (NGFW) with the birth of the “new” and “advanced” NGFW. This will take the NGFW sector to a whole new level, with the capability of handling advanced threats and offering advanced high availability features. But most importantly, the new NGFW will need to be flexible and agile in order to adapt to the ever changing cyber environment and to the business needs of the customer. It must bring this flexibility to allow much needed investment protection for businesses in these tough economic times.
From Stonesoft also, Jarno Limnell, Director of Cyber Security, on national cyber security predictions:
“Within the next couple of years, we will experience an increasing amount of cyber-attacks resulting in militaristic and economic damage. As states compete to become credible world players we can expect to see further announcements by various states regarding their offensive and defensive strategies. Cyber is the new battlefield, and the fifth element of warfare. As such it’s likely that future conflicts will involve cyber battles and because of this states will be, and already are, pouring a huge range of resources into developing defence and offence capabilities for cyber war.
“States and organisations will become more aware of cyber security, as they gain a better understanding of the capabilities of cyber threats, which are now stronger than ever before. It will be vital for cyber to be a key issue within an organisation’s security strategy. Education on cyber security will also increase, ensuring that employees have good “cyber-hygiene” according to company policies. Lastly, confidential information will become more secretive, with reduced number of people accessing security and verification codes in order to keep important information protected.”
