It’s a busy and interesting time in the world of workplace and facilities management, so last week the Burges Salmon FM team headed to Anticipate London 2024 to engage with both buyers and suppliers on the latest trends and innovations in the FM sector. So what did we learn? 

Technology & AI

There’s no question as to the potentially transformative impact that technology and AI could have in the FM sector. AI technology, when applied to large asset data sets, can enable predictive maintenance, thereby generating efficiencies, reducing down-time, and minimising costs associated with reactive maintenance. A significant takeaway was the importance of having a single source of operational data by integrating disaggregated data through the convergence of key technology to create “a single source of truth” e.g. BIM, AI and CAFM to create effective digital twins.

Additionally, technology can optimise the work order process, ensuring timely rectification of faults and helping service providers meet critical KPIs. This will only become more important in the public sector FM context given the enhanced KPI monitoring and reporting requirements – resulting in very real exclusion/debarment risks – set by the Procurement Act 2023 which is due to come into force in February 2025 (read more about the requirements of the new Procurement Act here). Performance monitoring is also enhanced through computer management systems that track work order status and provide automated performance reports.

Real-time monitoring can facilitate data-driven decision-making, such as locking down floors in office buildings on low occupancy days to reduce heating and lighting costs and lower carbon emissions.

The benefits of investing in technology are clear. However, this has cost implications and integrating new AI technology into business strategy and delivery will require investment in recruitment and training to ensure the necessary skillset is available. Significant legal input will also be required to ensure that roll-outs of AI technology are done in such a way as to be compliant with the ever-evolving regulatory landscape, and properly accounting for cyber security risks.  

As buildings become “smarter”, the huge amounts of data and interconnectivity of systems means cyber security will continue to be increasingly important. The threats from bad actors are becoming more sophisticated, so while having the right cyber security arrangements in place is essential, regular training for employees and testing business continuity procedures in practice will be just as important for ensuring a successful response to attacks. This is a big issue for businesses to address and the best advice from the conference is to identify your key pain points and work in manageable steps from there.

Sustainability and Net Zero

There will be a significant amount of new information to digest in 2025, with:

• the release of the seventh carbon budget;
• the expected implementation of new IFRS Sustainability Disclosure Standards;
• a new Bill to regulate ESG rating agencies;
• an update to the National Planning Policy Framework; and
• a new Planning and Infrastructure Bill.

We can expect an increasing focus on measuring Scope 3 emissions and requiring suppliers in the FM sector to reduce their carbon footprint. This is not a new issue: the Institute of Workplace and Facilities Management published a Sustainability Report in November 2024 finding that many businesses within the FM sector are now planning their roadmap to net zero, with carbon reduction solutions enjoying the largest investment increases in the sector. Many FM suppliers have identified this as a key market differentiator as customers aim to reduce their own Scope 3 emissions.

Another key trend identified was the incorporation of carbon, waste and water reduction targets in terms and conditions. In relation to public sector FM, it will be interesting to see the level of emphasis placed on sustainability initiatives when the Government publishes its updated National Procurement Policy Statement in 2025.  

Financial Challenges

Although FM budgets remain relatively high, there is an increasing need to “do more with less”, particularly given significant increases in costs due to rises in the national minimum wage and employer’s national insurance contributions as well as inflation. 

These financial challenges necessitate strategic planning and innovative solutions to maintain profitability while meeting regulatory requirements. It will be crucial for FM contracts to incorporate sufficient flexibility to allow for changes in prioritisation as well as the volume/nature of FM services required. In addition, appropriate risk allocation will be critical: there was recognition that some risks will need to be shared if contracts are to remain viable, particularly over the long term. We may also see more market consolidation as some suppliers are better able to manage the increased costs of business.    

Importance of the Workplace

As hybrid working is undoubtedly here to stay, office occupiers are increasingly placing focus on the importance of the workspace. There is a general trend of occupiers downsizing in space but not in quality, with a recognition that workspaces must offer high quality and increasingly varied facilities to attract employees back into the office and increase productivity, and a growing importance being placed on the importance of investing in neighbourhoods and not just offices. 

Skills gap

Similar to other sectors (such as nuclear), there is a need to attract new blood into FM. FM as a career opportunity needs to be further promoted and the right skills developed with an increasing emphasis on data analytics. Both apprentice-level talent and more mature ‘career changers’ need to be targeted to fill the gap. There also needs to be greater self delivery by key FM providers to support the development of talent rather than leaving it to smaller businesses with less resource. This will require a joint effort by industry, as well as organisations such as IWFM.

Contract models

There were discussions about the trends in contracting models for FM procurement including Total FM (TFM); the ‘Uber approach’, where specialists are procured through an online platform; through to more innovative ‘vested contracting’ models where clients and providers establish a long-term, highly collaborative approach to delivery (such as the contract between Johnson & Johnson and Sodexo). This approach reflects similar more innovative ‘relational contracts’ being considered in other sectors such as the ‘alliancing model’ where parties have moved away from the traditional risk allocation approach to encourage better overall outcomes. 

Building Safety

There was an excellent series of presentations on building safety matters, emphasising the importance of accurate applications to the regulator (apparently 50% of applications are invalid and therefore cause unnecessary delay); ensuring a proper focus on compliance with the functional aspects of Reg. 10 of the Building Regulations and encouraging parties to ‘begin with the end in mind’ in relation to completion certificates i.e. working backwards to consider what will be required to satisfy the regulations, and planning on that basis.

Conclusion

Please feel free to reach out to any of our FM team if you would like to discuss how these trends may impact your business. 

Anticipate London 2024 was attended by Steve James, Rory Trust, Laura Wisdom, Lydia Cullimore and Owen Watkins.