By Rakesh Kishan
Our observations, discussions with heads of global CRE/FM, and market research, suggest that 2012 promises to be a year of contradictions, uncertainty, and also of increasing optimism in many industries. But underlying these seeming contradictions will be the new business logic of tomorrow, more counter-intuitive at times than intuitive.
We use the term contradictions because we expect the focus on cost efficiency to continue even as bell-weather companies across many industries show record levels of profitability. We also observe shifts in optimism and increases in plant and facility investments, especially in high-growth emerging markets as well as in domestic energy investments.
But the business environment continues to be uncertain, fraught with commodity price risks, political risks, supply chain risks, as well as generational shifts in workplace demographics.
The confluence of these forces and trends is creating a very unique environment for Real Estate and Facilities Management leaders. Today, CRE/FM leaders have to not only be better connected to the business, they need greater delivery capability that is scalable, agile, and anticipatory.
What this will mean is CRE organizations that can project CRE/FM capability to where it's most needed by internal clients, more flexible portfolio strategies, talent centric workplace environments, and more scalable, high-performing outsourcing relationships with strategic partners.
RE/FM outsourcing deals may be nearing an inflexion point as many clients will seek the next generation of value from suppliers. Again, our observations from having been involved with some of the most complex third generation outsourcing deals is that the structure and purpose of these deals is being redefined and re-cast in new ways to better align client-supplier relationships and deliver higher-performing outsourcing results.
Key trends we would expect in 2012 include better definition the role of CRE in the intense war for talent, both growth and expansion of the portfolio in specific markets, continued transition from an operational to portfolio mind-set, and greater competition for the "non-core dollar" by suppliers.
Supplier competition will be characterized by greater geographical reach and breadth of services in face of more intense competition from regional and at times more specialized suppliers. Legacy distinctions will be blurred as suppliers redefine the boundaries of workplace and its services. We see more collisions amongst suppliers who in the past had worked side-by-side.
Key technology trends will continue to shape us, our workplace, and our industries at times through disruptive convergence. How CRE/FM will define its role amongst the three key technology forces of our time—social networks, mobility, and cloud computing—remains to be seen.
Rakesh Kishan is the Managing Director, UMS Advisory, Inc.
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