Facilities management (FM) companies will inevitably need to undergo business transformation to stay relevant in a rapidly changing competitive landscape and amid evolving technologies. FM companies with business-as-usual service propositions will risk losing out in the market.

In the wake of a digital revolution across industries, the global FM market is already witnessing multiple partnerships and mergers and acquisitions (M&As). Most, if not all, of these consolidations are due to the propulsion of one or more of three business themes: energy management (EM), digitalization, and workplace management. This article touches on EM.

Currently, the EM of buildings is the talk of town. Almost every participant in the buildings value chain is involved in the provision/use of EM products and services or advocates the importance of EM. As such, the EM trend has been focused on FM companies that are the operations and maintenance (O&M) professionals of post-construction facilities and buildings. Sensor, control, and monitoring technologies are the simplest and most common EM solutions for energy efficiency and automation improvements. FM companies, especially integrated FM (IFM) providers, have long realized the value addition of EM services and are already offering a variety of EM solutions to customers.

As buildings are getting smarter and greener, so are their occupants. Growing awareness on environmental sustainability among Asian governments may pave the way for a better regulated EM market in the future. A well-regulated EM market leads to the compulsory certification of energy service companies (ESCOs) by local authorities. Only a few FM companies are certified ESCOs; for instance, Engie and CBM in Singapore and Cofreth in Malaysia. Conventional FM companies offering value-adding energy efficiency solutions will continue to face tough competition from certified ESCOs providing comprehensive EM solutions, from audits to monitoring and performance guarantees.

With growing digitalization in many markets, EM services are advancing toward new levels of sophistication and innovation in business models and technology. EM is no longer only about energy efficiency, but about advancing one or more of the three touchstones for end users: business productivity, data for decision making, and successful performance contracting. While performance contracting is predominantly the core competency for ESCOs, FM companies must develop the capability to assist companies in not only achieving the return on investments (RoI) in EM projects but also improving business productivity and utilizing information technologies.

In other words, FM companies providing successful and proven EM solutions must be able to reinvest the energy cost savings into the improvement of customers’ business processes, corporate culture, and new infrastructure development. These can be achieved by leveraging digital platforms such as cloud, fog, or edge computing for instantaneous decision making based on valid data.

Moving forward, FM companies will play a key role in building industry EM. An FM company is in a unique position, whereby it has the capability to encompass myriad building solutions and business processes. FM companies at the core are knowledgeable in building mechanical and electrical services. They know buildings better than cloud solution providers and software providers. Moreover, they have the competency to expand into ESCO spaces. Leveraging digital platforms, an FM company that is willing to change and reinvent itself stands a greater chance for strengthening its place in the future of FM.

About Frost & Sullivan

For six decades, Frost & Sullivan has been world-renowned for its role in helping investors, corporate leaders and governments navigate economic changes and identify disruptive technologies, Mega Trends, new business models and companies to action, resulting in a continuous flow of growth opportunities to drive future success.

Frost & Sullivan

For six decades, Frost & Sullivan has been world-renowned for its role in helping investors, corporate leaders and governments navigate economic changes and identify disruptive technologies, Mega Trends, new business models and companies to action, resulting in a continuous flow of growth opportunities to drive future success.

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