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REFM Outsourcing Trends and Market Demand Conditions

By Christine Chen, General Manager

Christine Chen - Impec Group General Manager

If you’re giving serious consideration to outsourcing some or all of your real estate and facilities management, or REFM, you’re in good company, according to a recent survey by a leading tax, audit and advisory service. The KPMG 2011 Global Real Estate and Facilities Management (REFM) Outsourcing Pulse Survey, performed by EquaTerra, tells us that REFM outsourcing is alive and well — and popular.

Current outsourcing usage shows that buyers are relying most heavily on outsourcing for workplace service, with a whopping 87 percent of respondents fully or partially outsourcing these services. 65 percent are fully or partly outsourcing their facilities services, while 61 percent are fully or partially outsourcing transactions/brokerage services. Half of these buyers plan to increase their outsourcing with the next 1 to 2 quarters, with 36 percent making similar plans within the next 3 to 4 quarters.

Why are you buying? The survey shows that reduced operating costs was by far the top outsourcing driver for buyers in 2011, with a 70 percent rating. Coming in second at 41 percent was improved process performance, followed by improved financial flexibility/creation of a more variable cost model, support of business growth/expansion agendas, and improved global delivery and operating models.

The leading challenges for buyers were prioritizing opportunities; economic uncertainty; and retained organization, transition and ongoing outsourcing governance. Buyers who put insufficient manpower, thought and resources into the transition often find themselves underwhelmed by the results. This can be overcome by working closely with your facility management and maintenance provider to review what all must go into your managed transition, and perhaps adjusting the scope or the speed of the transition to make it go more smoothly. If you want to make REFM outsourcing a part of your business plan, contact us and let’s discuss your situation.