The key to maintaining a competitive advantage in Enterprise Facilities Management #digifm GLOBAL WORKPLACE SOLUTIONS
Contents Facilities Management (FM) is on the cusp of fundamental change From tortoise to hare: Off to a slow start, the pace of digitization is gaining momentum Ten trends that will drive the continued digitization of FM brings smart, efficient buildings to life Stakeholders weigh in on the path to digitization What s next? The road to a digital future Future success: The industry will require a significant shift in thinking for all stakeholders 03 04 05 06 08 13 14 GLOBAL WORKPLACE SOLUTIONS 2
Facilities Management (FM) is on the cusp of fundamental change A strategic shift is taking hold, fueled by advancements in technology that give facility professionals the power to deliver services, increase efficiencies and create value in ways unimaginable just a decade ago. Yet, for all the advantages offered by today s wireless and predictive technologies, adoption of technology and the pace of continued innovation in FM lag far behind other industries. What s holding the industry back? The CBRE s Global Workplace Solutions (GWS) team conducted extensive research to better understand the role of technology in today s FM industry, the challenges to its implementation and opportunities it presents for the future. The team surveyed corporate real estate professionals about digitization in their current and future practices of facilities management. The survey results yielded three key themes: GETTING READY FOR CHANGE Facilities professionals are ready for digitization and see increases in efficiency and reliability as the main benefit of new technologies. DECODING OUR INDUSTRY TODAY FM lags behind other industries in embracing digitization; a more open and collaborative approach is needed to unlock the value of digitization. FORECASTING OUR INDUSTRY FUTURE The next step in digitization of FM needs to go beyond technologies that support service providers and facilities teams and focus on adding value to the business through: use of predictive technologies that lift performance improvement, integration of the entire supply chain, and creation of memorable end user experiences. The survey results, along with trend research, point to a single conclusion: The time is now for industry stakeholders to take significant steps toward digitization if they expect to keep pace with change and maintain a competitive advantage. Key to success will be for the industry to widen its view. Facilities professionals must look beyond using technology to create process or energy efficiency, and focus on creating great customer experiences for the people who work in and visit the buildings they manage. At the same time service providers and niche software developers must be willing to collaborate and integrate innovative products into automated, end-to-end business processes, supply chain included. GLOBAL WORKPLACE SOLUTIONS 3
From tortoise to hare Off to a slow start, the pace of digitization is gaining momentum The concept of digitization was first established in 1948 by MIT mathematician Claude Shannon, who is often referred to as the father of information theory. In a landmark paper penned that year, Shannon predicted that digitization the process of converting information into a digital format would result in revolutionary new ways to conceive of information and communications systems. More than thirty years passed before his prediction came true, with the introduction of the personal computer in 1975. In the decades that followed, the desktop would give way to the laptop, the tablet, the smartphone and watch with each advancement in technology progressing faster than the one before. In 2015, 40 years after the first PC, worldwide shipments of digital devices are expected to surpass 2.5 billion. Today, digitization impacts every aspect of business life and has already begun to open up a world of opportunity for facilities management. It allows internal teams and their service providers to be agile, responsive and demonstrate their value to the business in ways never seen before. For example, occupancy sensors placed in workstations can today deliver real time utilization data to drive output-based (as-needed) services such as cleaning. And camera-equipped drones can inspect roofs to determine if maintenance is necessary. also leads to more productive, comfortable and safer environments for building occupants. In a manufacturing facility, for example, smart cards allow only select individuals to use pieces of hazardous machinery. These are just a few ways digitization has already begun to have a positive impact on the industry. GLOBAL WORKPLACE SOLUTIONS 4
Ten trends that will drive the continued digitization of FM Moving forward, digitization and facilities management will be inextricably linked, according to new research conducted by Global Workplace Solutions (GWS). Researchers identified ten trends that will drive the continued digitization of FM. These trends will drive change in the industry; change that will cause a dramatic shift in the way building services are delivered and the role of facilities management teams. The Internet of Things Interconnected technologies will continue to increase efficiency, optimize performance, improve sustainability and enhance the wellbeing of occupants. Biometric systems The industry will see a rise in the use of biometric systems to manage access control, identification, wellness and building-usage analysis. Sensors Facilities management will become increasingly reliant on sensors to understand how buildings are being used and how well they perform. Robots Robots and artificial intelligence will be used to support or replace humans in routine work tasks such as cleaning. Drones Equipped with specialized cameras and robotic extensions, these commercial, miniature flying machines are poised to become valuable facilities management tools. Demographics Given the ageing workforce, automation will support the growing imperative for doing more with fewer people. New technologies will help to overcome risk of skills gaps arising. Big data and real time data Facilities professionals will rely more heavily on relevant, real time data to make informed and proactive decisions. Flexible and dynamic real estate Advancements in technology will play an important role in the ability of spaces to meet ever-changing business needs. Health and wellbeing With society s increased focus on health and wellbeing, buildings and services will focus on occupant wellness to increase efficiency, productivity and employee satisfaction. Strategic facilities management Facilities management will be considered less a commodity and more a value-added service, taking a holistic approach to people, place and technology. GLOBAL WORKPLACE SOLUTIONS 5
brings smart, efficient buildings to life The technology exists today to bring smart buildings to life. Buildings and businesses generate tremendous amounts of data that can support the creation of environments that automatically adapt to occupant needs. Add people and process to that mix, and the right combination will see smart buildings become a reality. Innovative technologies need domain expertise and supporting processes for maximum impact. As Anna arrives at her office this morning, she passes the access control via biometric scan. An app on her smartphone guides her through the building and shows her the exact real time position of Peter, who she ll be meeting with in a few minutes. She books a nearby meeting room with her phone, and as she enters the room to prepare for the brainstorming session, the lighting changes automatically to a light purple color, which is said to stimulate creativity. The temperature of the room has also adjusted automatically to compensate for the morning s weather conditions and in recognition that the meeting will be attended by two people. GLOBAL WORKPLACE SOLUTIONS 6
To achieve this vision as a smart building, however, our research shows four industry stakeholder groups need to better understand their role in bringing it to life, and commit to achieving the goal through collaboration. Internal facilities management teams These teams are responsible for the performance of their organization s buildings or portfolios, as measured by a number of criteria such as energy efficiency, utilization and cost. As digitization of the industry takes hold, these teams will be responsible for driving digitization both ahead of the curve and in response to demand. They will establish a vision for their use of technology, create a demand for digitization and partner with service providers who can deliver on that vision. Service providers For the purposes of this research, service providers are defined as outsourced providers of facilities management services. From multinational companies to smaller, more regional providers, these organizations deliver services such as building management, engineering, janitorial, cleaning, landscaping and catering services. As we look to the future, the future, service providers will combine best-of-breed technologies, people with proven expertise, and well-defined processes to deliver intelligent buildings and integration through automation of the entire supply chain. End users In this research, end users are defined as building occupants. Today, building occupants have limited interaction with or influence over the technologies that run buildings. Moving forward, the industry will focus more on the needs of these stakeholders. Through technology, end users will be invited to take a more active role in creating optimal experiences within the buildings where they work or visit - in ways that mimic their lives outside work. In a corporate canteen or cafeteria, for example, end users will use their personal phones to access menu and nutritional information, place orders, pay for food, establish preferences and like the special-ofthe-day on Facebook. Over time, end user preferences will inform the way the facility is operated. Niche software providers In our research, niche software providers are defined as organizations that develop stand-alone applications, processes or systems that are not typically aligned with other systems within a building or portfolio. In the future, these stakeholders will more closely align with the goals of their clients and will work more collaboratively with service providers. Plug and play integration capabilities will be a key focus in this respect. Under an umbrella of collaboration between these four stakeholder groups, FM innovation will accelerate and thrive. Many industry stakeholders are open to change, according to GWi research. But they need a roadmap to get from where they are today, to where they want to be in the future. GLOBAL WORKPLACE SOLUTIONS 7
Stakeholders weigh in on the path to digitization To relate its research to real-life practice, the GWS team developed an online survey to assess the impact of digitization on the current and future practice of facilities management. The survey was distributed to corporate real estate professionals across the industry through the CoreNet corporate real estate network. The survey results yielded three key themes: GETTING READY FOR CHANGE Facilities professionals are ready for digitization and see increases in efficiency as the main benefit of new technologies. DECODING OUR INDUSTRY TODAY FM lags behind other industries in embracing digitization; a more open and collaborative approach is needed to unlock its value. FORECASTING OUR INDUSTRY FUTURE FM needs to go beyond technologies that support service providers and facilities teams and focus on adding value to the business by creating memorable end user experiences. Beyond FM: What can we learn from the automotive industry? Automobile manufacturers routinely collaborate outside their own industry. Here are a few recent examples of how open innovation is helping them create memorable experiences for people who buy cars. Volkswagen created a contest called App My Ride that lets customers, designers, programmers and developers help design future in-car entertainment systems. In much the same way, end user preferences will influence the design of workspaces, the services provided and the way in which those services are delivered. Ford teamed up with a leading ondemand music streaming service to give drivers access to hands-free, voiceactivated entertainment while driving. In the FM industry, a similar partnership has recently been launched by retail giant Starbucks, giving loyal customers access to streaming music through Spotify and the ability to influence in-store playlists. Google is partnering with automotive suppliers as it designs a self-driving car. Once the technology is fully developed, Google intends to market its system and the data behind it to automobile manufacturers. In this example, the auto industry s competition is emerging from outside the industry. The same is likely to be true for FM. From where will our next innovation originate? Global Workplace Solutions 8
GETTING READY FOR CHANGE Key Finding #1: is driving change. Among the stakeholders who responded to the survey: The vast majority (94 percent) said the nature of facilities management is changing and most believe the changes are being driven by technological advancements. One third (33 percent) actively use technology today to drive change within their organizations. Moving forward, much of the continued push towards digitization will come from new generations of workers. The facilities management professionals of tomorrow are digital natives today who have grown up with technology, are comfortable using it and expect it to be available to help them plan and work efficiently. will also help to counter the ageing workforce; automation will replace specialist knowledge gained over many decades. Key Finding #2: Change is welcome. Our research showed: More than half of those surveyed (55 percent) said they are openminded about the trend toward digitization. More than a third of respondents (40 percent) are enthusiastic about the change. While our research shows that stakeholders appear ready to embrace technology, the rate and scale of digitization in the industry will depend greatly on other factors. Technologies such as online collaboration, webbased ticket systems and resource booking tools will require significant user engagement and training to ensure they are adopted. Workplace systems and services must also be accessible by a range of technologies so facilities professionals can use their own mobile devices, such as smartphones or tablets, to access information and troubleshoot issues. Key Finding #3: The demand for efficiency will drive digitization. Among the stakeholders who responded to our survey: The majority (two of every three) said the primary benefit of digitization in the industry is that advanced technologies will maximize efficiency of work processes. Fewer (one in three) said digitization will benefit the industry by helping facilities professionals create excellent experiences for their customers and building occupants. The technology available today is already delivering on the promise of improved efficiency through building management systems, energy and asset management systems, and space utilization technologies. Moving forward, the challenge for the industry will be to think beyond those traditional facilities management tools and use technology to increase building occupant productivity and satisfaction. GLOBAL WORKPLACE SOLUTIONS 9
DECODING OUR INDUSTRY TODAY Key Finding #4: drives insight. How will future digitization of the industry impact business drivers? Our survey showed: The vast majority (85 percent) expect technology to support them in making budget-related decisions and document return on investment. More than three fourths (77 percent) will use digitization to solve emergency, short- and long-term facilities management issues. More than two thirds (68 percent) will use technology to achieve a greater level of customer satisfaction by making better-informed building operations decisions and balancing occupant needs. Key Finding #5: The industry must broaden its view to innovation. Facilities professionals rarely look outside their own industry for inspiration. Instead, our research showed: Nearly three fourths (74 percent) rely on industry events as a source of information on the latest technologies. Half (51 percent) leverage supplier knowledge as a source of inspiration. Nearly half (49 percent) make use of industry research. By focusing largely on its own industry for inspiration, FM is missing out on powerful opportunities to unlock greater value. The industry must adopt a more outwardly focused approach to innovation, partner with suppliers and work across several business functions to remain competitive. Without broader collaboration, outside innovators may begin to develop facilities management products and services, and capture market share. Key Finding #6: The industry must remove barriers of incompatibility and cost. The majority of those surveyed agreed that the future of the industry hinges on digitization. Yet, our research showed two critical hurdles must be cleared before advancements in technology will be widely adopted and the benefits enjoyed: Three quarters (75 percent) of the survey respondents cited cost as major barrier. The majority of stakeholders (81 percent) said the incompatibility of technologies is the most significant barrier to digitization. Today, the FM industry continues to struggle with its legacy of incompatible systems and technologies. Moving forward, convergence must be the goal. Stakeholders will need to develop an overarching strategy based on a shared and common vision to remove technological barriers. The providers of products and services must also be prepared to spread the cost of developing new technologies across their client bases, making access to digitization affordable. GLOBAL WORKPLACE SOLUTIONS 10
FORECASTING OUR INDUSTRY FUTURE Key Finding #7: Technology is a catalyst for improved service delivery. Survey participants were asked to rank the level of technology penetration across facilities management services today, and estimate its prevalence a decade from now. The survey found: Services that do not require a lot of interaction with building occupants, such as maintenance, are expected to have higher levels of digitization in the future. Occupancy sensors, for example, will deliver real time utilization data to drive cleaning service schedules. Services that do require interaction with building occupants, such as reception, cleaning and catering, will still be delivered manually, but technology will improve efficiency. For example, instead of a conference room being cleaned every week, it will be cleaned when sensors in the room indicate a set number of meetings have taken place. Respondents were also asked to rate current and future levels of digitization across aspects of facilities management. The survey showed: Today, facilities professionals use technology most often to report progress against key performance indicators. Moving forward, the ability to generate accurate, detailed reports will continue to be a primary benefit of digitization. In terms of growth, the survey showed the greatest growth in future digitization will come as technology is utilized for resource allocation. Using cloud computing to manage resources will be a major asset in this progression. Key Finding #8: Innovation will drive seamless and intuitive technology. Survey participants were given the opportunity to answer the following question: How can technology be used in FM to transform service delivery into a unique experience? They offered ideas covering a range of facilities services, including: Maintenance: To reduce the safety risk for a service provider who performs maintenance from a ladder or on a roof, drones with frontmounted cameras can send real-time video to his smartphone, giving him a bird s-eye view of issues that may need to be addressed. Cleaning: The German Aerospace Center developed a programmable, two-armed humanoid robot named Rollin Justin that s capable of cleaning windows with a squeegee by applying just the right amount of pressure for the situation. Reception: In Japan, one of the country s largest mobile phone operators is using a humanoid robot named Pepper to greet and interact with customers in its stores. Pepper was developed by SoftBank Mobile in collaboration with Aldebaran Robotics, and is said to be the first robot that can read human emotions. GLOBAL WORKPLACE SOLUTIONS 11
Catering: At its German headquarters in Dusseldorf, mobile network company Vodafone gives employees a new way to shop for grocery items. From an interactive shopping wall employees scan the QR codes of the products they wish to buy, submit their orders via smartphone, and are then directed to a website where the scanned products are automatically put into their online shopping baskets for later collection or delivery. Resource allocation: Motion sensors placed throughout facilities allow facilities professionals to understand the space utilization of their buildings in real time. Utilization reports can also be used to schedule services, such as cleaning meeting rooms, based on use rather than according to schedule. Key Finding #9: Create an experience that makes end users say, WOW! Rather than focus on traditional goals of cost cutting or increasing energy efficiency, the digitized FM of the future will prioritize creation of a good quality environment; a well-designed and operating building that supports wellbeing and a consistently great experience for everyone working in, and visiting, their facility. Survey participants were given the opportunity to answer the following question: Can you give us an example of how technology can create a wow factor for a unique experience? Their responses were summarized into three main suggestions: Create services and products that they want to buy themselves: Survey respondents replied with comments many referencing Apple - such as: Apple does not sell products. It sells a lifestyle experience and a sense of community. It is about how the product makes you feel. Apple is the only company where ease of use is more important than the product itself. Apple makes this [ease of use] a critical goal of its approach to creating any new product. Provide great customer experience and service: Apple doesn t ask, How can I help you? Instead, it asks, What would you like to do today? The company focuses on the solution the customer is looking for, not the problem. Keep it simple and easy to use: Create simple and intuitive solutions. Technological complexity comes from the end user that wants the technology to do more and different things. Imagine the impact this kind of approach could have on facilities customers. When end users have a positive Workplace experience, it will be easier for organizations to recruit and retain valuable employees, enable innovation from within and enhance their brands in the eyes of the public. GLOBAL WORKPLACE SOLUTIONS 12
What s next? The road to a digital future The survey findings, combined with the team s trend research, point to a single conclusion: Industry stakeholders must take significant steps today if they expect to keep pace with change and maintain a competitive advantage. Internal facilities management teams must: Develop a vision for the role of digitization in their organization. Set objectives and build a business case based on that vision. Think beyond the goal of process efficiency to include a focus on creating great experiences for their building occupants. Communicate their vision and priorities to other stakeholders such as service providers, niche software providers and, as appropriate, building occupants. Work in collaboration with all stakeholders to develop strategy, products and services that can be employed to achieve their goals. Be open to inspiration that may come from industries other than FM. Service providers must: Think beyond the goal of delivering process efficiency for their clients, and include a focus on creating great experiences for end users of their products and services. Be open to inspiration that may come from industries other than facilities management. Collaborate openly with other stakeholders, including providers of niche software, to remove barriers of technological incompatibility. Be prepared to spread the cost of developing new technologies across their client bases, making access to digitization feasible and affordable. Niche software providers must: Recognize that facilities management teams now expect to view all of their building and real estate performance from a single dashboard, regardless of where the data originates. Support the integration of technologies by collaborating openly with stakeholders such as service providers, and by working to remove barriers of technological incompatibility. The value of collaboration When stakeholders work in partnership, there are limitless opportunities to create value. One recent example involved a global retailer of gasoline. In a routine meeting with their service provider, company leaders mentioned that one of the things that can discourage retail sales is the failure of lighting; potential customers are not likely to stop at a poorly lit gas station. After the meeting, the service provider designed a sensor that detects lighting failures, allowing technicians to respond to those instances quickly. It was a relatively simple project to execute, but one that demonstrates how managing real estate in a collaborative way can drive innovation and directly impact business performance. Global Workplace Solutions 13
Future success The industry will require a significant shift in thinking for all stakeholders In recent decades, digitization has given facilities professionals the data and insights they need to operate their buildings more efficiently. Today, FM technologies are powerful tools that help them cut costs, reduce energy use and meet other key performance indicators. Moving forward, however, success will no longer be measured against operationally focused targets. Instead, the focus will shift toward enhancing the experience for the people who work in and visit buildings, which will cause a dramatic change in the way building services are delivered and the role of facilities management teams. is both driving the need to shift focus and enabling facilities professionals to make the change successfully. Yet in practice, FM lags behind other industries in adopting digitization. To take full advantage of all digitization can offer, internal facilities management teams, service providers, end users and niche providers must embrace a spirit of collaboration. Stakeholders must commit to achieving shared goals by removing barriers of technological incompatibility, encouraging innovation and being open to inspiration that may come from outside the industry. By taking these steps, facilities professionals will be able to make well-informed decisions, meet the ever-changing needs of their customers, and better demonstrate their value to the business. And the people who work in and visit buildings will have great experiences. The smart buildings of the future will come to life before our very eyes. GLOBAL WORKPLACE SOLUTIONS 14
About the Authors Hannah Hahn As part of the Global Workplace Solutions research and development team, Hannah is responsible for trend research and roadmapping. She has several years experience in this area, having conducted numerous global trend research projects. Hannah s focus is on using the findings from research projects to drive product solutions for GWS customers. Hannah.Hahn@cbre.com Duncan Sheehan As a consultant for Global Workplace Solutions, Duncan has extensive experience in Workplace strategy development and has worked with a number of global organizations to deliver Workplace-change projects. Duncan holds an Honors Degree in Business Management with Finance. Duncan.Sheehan@cbre.com About CBRE CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world s largest commercial real estate services and investment firm (in terms of 2014 revenue). The Company has more than 52,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 370 offices (excluding affiliates) worldwide. CBRE offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. www.cbre.com/gws @GWSWorkplace 9165a0715 GLOBAL WORKPLACE SOLUTIONS 15