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| The Expansion Trend Issue 31 - July 07 Working in the facility management profession for around 17 years has given Dr Tan in-depth understanding of what trends are growing and changing throughout Asia. RFP shares Dr Tan’s predictions for the growing FM markets in Asia. When Tan first started out in the field, facility management and property management were indistinguishable, neither was considered strategic components responsible for the success of an organisation. Now, however, Tan observes geographical areas of growth and opportunities to partner with other organisations and governments as well as new and expanding markets within existing property sectors. Tan’s background is in property management and he has completed an MBA and a PhD in financial management, a process described as “a nightmare”. Though he agrees that his academic studies have improved his ability to understand business strategy strategic FM and hard services FMs split most contracts’ services into “soft” and “hard” services. Soft services such as printing and mail room are often outsourced with hard services, being more engineering and process focused, kept in-house. “No secret there is competition”, but in the industrial sector FM companies can add value to a client organisation. Tan sees the specific advantages many specialist FM firms have in delivering hard services, “previously just cleaning, security” as driving the trend of FMs working in industrial facilities.  While UP “do not touch the manufacturing processes”, energy efficiency optimisation and maintenance scheduling are other areas that benefit from an FM’s experience. Offering hard services to datacentre managers is also an FM growth area. Chiller optimisation and project management services for clean rooms also offers good returns. “It takes time to develop competency”, says Tan, to manage the full range of industrial such as the installation of plant equipment. Such is the importance of technical services that Tan outsources tasks such as security and cleaning, except for certain key accounts. For this are headcount and associated human resources reasons. He has noticed a change in FM, seeing it become far more technology based, particularly the “Importance of software as an enabler for monitoring of facilities that are geographically widespread”. One trend Tan is pleased to see catching on in Singapore is government supporting private sector growth through public private partnership (PPP) initiatives, which he attributes to the fact that “government has some funds in the coffers”. The big two competitive bids are the Sports Hub, a 35 hectare development and the first significant social infrastructure PPP in Singapore, and the new ITE Campus. UP is the nominated FM for one of the short listed consortiums for the sports hub project, for which final tenders should be submitted by mid 2007.
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| new markets In order to avoid over-reliance on UP’s core market in Singapore, Tan spends much of his time exploring opportunities beyond the city-state’s borders through a series of “niche regional accounts”. Existing partnerships in China and South East Asia have been followed by cooperation with the booming economies of the Middle East, such as Qatar. So while UP employees tend to have a technical skill-set, this may vary depending on the location. In China, the focus on manufacturing has led UP away from the commercial and retail markets to working with manufacturers to optimise the efficiency of their facilities. In Indonesia, on the other hand UP has “ridden on the back of the retail real estate boom”, particularly in the Jakarta city centre where “the more cash rich developers are keen to keep the shop space”. Tan continues, “The good developers will not sell off the shop space. In Indonesia we try to work with a single mall operator.” The trade centres, usually strata-title, are built by tier two developers but “this is not the way to go, when they sell 50 percent there is totally no control at all” over the quality or mix of the tenants which can dissuade people from visiting the mall. He says, “there is a good mix of opportunities across property categories in Thailand, Malaysia and Indonesia. People like us will be able to fill in those gaps”.  consulting opportunities growing Like in a PPP scenario, in less developed markets Tan says FM companies can add value by advising companies on their requirements up front, such as when they are setting up factories. UP recently did just that with a semiconductor factory for Xilinx, “we were involved in initial stage advising, including where equipment would be placed”. This is similar to a build-to-suit project, where the client is the project manager, “we like to do that. More time consuming but we prefer this as the client treasures your input at this early stage and then often you get the contract to manage the facility afterwards”. One issue is that developing countries generally have a ready pool of technicians, says Tan. However some of the managerial or strategic skill needs to be fostered. UP answer this problem by sending staff to the client’s site to deliver on the job training. In some cases they also get senior staff from the client company to come for training in Singapore. Sometimes Tan sets up full training programmes for onsite staff. Some of UP’s clients have technical staff who can help in the project process others require and often ask for training. UP offers this service and their training courses are open to the public “even our competitors can attend”, he says. home and away One growth area that Tan thinks UP “cannot ignore”, is the Middle East, however he notices one significant difference. As the government has an equity stake in most businesses, service providers “Need to have good linkages with government agencies in order to get the contracts.” In these countries it does not so much restrict the ability to operate but the foreign company’s level of penetration. Fortunately the Singaporean government works at keeping ties with the Middle East friendly. In Malaysia, Indonesia and Thailand, this is not as necessary as there is a good mix of government and commercial projects. In the Middle East there is a “very big vacuum that we can fill” for experienced FM practitioners to help developers “establish basic operating procedures”. There are so many mega-building projects that contain an often complex array of property types within them, says Tan, and owners have now “come to the realisation that they need people to manage them”. Immature markets where specialised maintenance people are required is “in the commercial retail sector”. There is also “growing interest in serviced apartments, and a growing interest in hospitality.” what do I do if I am starting out in FM today? Tan says there are opportunities for the FM starting out today and they involve expanding your horizon, or in Tan’s terms: “not working in Singapore”. This is because good FM is about thinking outside the box and putting together combinations services that provide real solutions to clients. He says there is no one size fits all and experience in other markets means that new knowledge can be applied when you return to your home country. The best FMs are those that understand their clients problems and offer them the solution that is tailored to their specific need and takes a holistic approach. “Take an overseas posting especially to regions that are less developed. In Singapore you might be blinded and unable to see the opportunities.” Through travel, aspiring FMs can see the “permutations and combinations” in the wide world of FM and have the opportunity to try new ideas, but don’t worry about failing, he says, “we all fall many times”, this is the way we learn. RFP
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Key title: RFP magazine
Abbreviated key title: RFP mag.
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