We are all products now ...

or, why people are becoming objects and companies are becoming services.

So many things that we used to think of as a service have become productised.

Getting to the airport from your home might mean calling a driver. Now, you get an Uber.

If you wanted to get information about something, it used to be that you would research a subject. Now, you Google it.

Both of these are examples of the productisation of services. In Uber's case, it is transportation (or mobility) as a service. For Google, it is information retrieval.

As multiple steps are combined into a single point of delivery - e.g. finding a cab company, determining if they have availability to take you where you want to go when you want to go, placing a booking, giving payment information and your address, checking where they are etc. - what used to be a service has become a product.

The world of facilities management (FM) is no different and is already showing evidence of this change. As industries across the spectrum embrace disruption and modernisation, the FM market, traditionally viewed as a realm of services, is experiencing a paradigm shift. The landscape is rapidly evolving, and at the heart of this transformation is the trend of productisation.

What Is Productisation in the FM Sector?

Historically, facilities management has been characterised by tailor-made solutions, specific to the requirements of individual businesses. The services were fluid, moulded as per demand. However, productisation refers to the transition from these custom services to standardised products. These are scalable solutions, often supported by technology, that address common challenges across the industry.

Why Is This Change Occurring?

1. Technological Advancements: Digital transformation is omnipresent. Innovations like IoT (Internet of Things), AI-driven analytics, and cloud computing are shaping how FM services are delivered. By leveraging these technologies, providers can offer predictive maintenance, real-time monitoring, and data-driven insights as packaged offerings, streamlining operations for multiple clients.
2. Demand for Scalability: As businesses expand globally, they need FM solutions that can be easily replicated across multiple locations. Productised offerings ensure uniformity and help in maintaining consistent standards worldwide.
3. Cost Efficiency: Productised solutions, by virtue of being standardised, are often more cost-effective in the long run. They eliminate the need for custom setups, reduce operational complexities, and bring about economies of scale.
4. Predictable Outcomes: When FM solutions are standardised, outcomes are more predictable. This is particularly beneficial for businesses that require consistent performance metrics and are keen to mitigate risks.

The Implications of This Shift

The transition from services to products is redefining the value proposition of facilities management providers:

• New Business Models: FM providers are increasingly adopting 'as a Service' models, where clients subscribe to services rather than invest in one-off bespoke solutions.
• Enhanced Customer Experience: With technology at the core of productised offerings, clients benefit from user-friendly interfaces, dashboards, and self-service portals, enhancing their overall experience.
• Focus on R&D: As competition heats up, there's a pressing need for continual innovation. Facilities management companies are thus investing heavily in research and development to stay ahead.
• Higher margins: If you are providing something of value to your clients, chances are you can charge more for it. Taking away pain points or complexity for your customers is something that should allow you to increase your margins.

An example

Excuse the oversimplification, but let's think about the owner of a commercial building. She knows that her occupiers and tenants will require a temperature controlled environment with air quality of a reasonable standard.

To this end, she needs to find a contractor, specify equipment (or get advice to do so), get this installed, put in place a service contract, budget for planned and reactive maintenance spend. Then at a future date, there will be residual value in the equipment and she might like to realise this.

But think about what this owner wants.

She doesn't want to own air conditioning and air handling units. She wants a temperature-controlled environment and high air quality for tenants. Enter HVAC as a service.

Even better, incentives become aligned because the service provider is now encouraged to ensure optimum maintenance of the equipment.

Better still is if you can vary the cost based on usage so that you are only paying for what you use.

There are lots of other ways in which this can happen .. cold store as a service (remote monitoring using sensors to ensure temperature levels are kept constant in a cold store); clean bathrooms as a service (using count sensors to provision cleaning after a specified number of uses); space as a service (opening up space based on occupancy); compliance as a service etc. etc.

Examples may be slightly janky to begin with (as below) but this will quickly change.

Embracing the Future

Change is the only constant. And as the lines between products and services blur in the FM sector, stakeholders must be agile and adaptive. Embracing productisation does not mean sidelining custom solutions entirely. Instead, it's about blending the best of both worlds to deliver value.

As we navigate this transformative era, it is clear that the future of facilities management is not just about managing facilities but crafting holistic, integrated, and innovative solutions that propel businesses forward.

To me, this is a bright future and we are keen to help companies make this happen.

We would love to hear how else you are moving the FM industry forward.