European Integrated Facilities Management Markets: Industry Research Report

European Integrated Facilities Management Markets

Published Date: June 2006

Published By: Frost & Sullivan

Page Count: 43

Order Code: R1-5202

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Description

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Research Overview

This Frost & Sullivan research service titled European Integrated Facilities Management Markets provides an overview of the trends and the total revenues in the European markets. This study also offers a complete analysis of key market drivers, restraints and dynamics.

Market Sectors

Expert Frost & Sullivan analysts thoroughly examine the following market sectors in this research:

By Application

Private sector
Public sector

By Service Type

Building operation and maintenance
Support services
Environment management
IT and telecom
Property management

By Geographic Region

Central Europe (including Germany, the Alpine and the Benelux)
Northern Europe (including the United Kingdom and Scandinavia)
Southern Europe (including France, Italy and Spain)

Market Overview

Significant Cost Savings to Promote I-FM Outsourcing in Europe

Over the last ten years, outsourcing of services to integrated service providers has gained significance in Europe. With the economic slowdown after the year 2000, cost savings have become crucial for all companies operating in Germany. Through a revised and comprehensive facilities management programme, companies can benefit from significant cost savings, specifically through improved productivity of human assets resulting from increased morale and hiring better-quality employees. Properly managed facilities can be a useful, indirect source of profits and a means of achieving corporate goals. With companies growing aware of these factors, outsourcing facilities management and in particular, the integrated facilities management (I-FM) approach has gained acceptance. Moreover, this approach adds value to the core business of the client company.

"Despite the economic downturn, I-FM specialists have been gaining importance," notes the analyst of this research service. "Businesses are recognising the benefits of outsourcing I-FM as a way of reducing operating costs and improving efficiency. Meanwhile, I-FM specialists are also responding to a general enthusiasm for the partnership-style of working through the development of customer-supplier relationships."

Market Expansion to Hinge on Provision of Value-added Services

While the private sector still represents the bulk of I-FM end users, the public sector, which primarily includes schools, cities, boroughs, municipalities, hospitals and the Army, has demonstrated an increasing interest in outsourcing I-FM. In particular, interest in specialised contractors in building operation and maintenance, support services and property management has experienced a rise.

Underpinned by these trends, market revenues, pegged at $12.70 billion in 2004 are estimated to increase to and $22.30 billion by 2011. Excessive price competition is likely to result in aggressive price reduction strategies to attract potential customers. However, this will adversely affect profit margins and lead to serious financial difficulties. "I-FM suppliers will need to expand the range of services they offer, in order to be competent," states the analyst. "In view of the global competitive markets, trends are demonstrating the determination of former single I-FM providers to penetrate the markets either through strategic partnerships or acquisitions." In the context of services offered, companies with a specific background in catering and cleaning are expected to extend their activities to building operation and maintenance. Similarly, those specialised in maintenance, plumbing and heating controls are likely to augment their service offerings with support services.

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