a facilities management company (fmco) an executive presentation for uae
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A Facilities Management Company(FMCO)An Executive Presentation for UAE
Adil AbdallaDubai, 2012
What FM?
‘An integrated approach to operating, maintaining, improving and adapting the buildings and infrastructure of an organization in order to create an environment that strongly supports the primary objectives of that organization’ (Adapted from Barrett and Baldry, 2003)
‘The practice of coordinating the physical workplace with the people and work of the organization. It integrates the principles of business administration, architecture and the behavioral and engineering sciences’ (The British Institute of Facilities Management – BIFM)
‘Management of a vital asset – the organization's facilities.’ (The International Facility Management Association – IFMA)
2
FM within RE?
3
RevenuesLandlord
Premises Leasing
EXECUTION
Contracts
Regulator
Handover
Design Package
Construction Package
OPERATIONSProperty CRM
FM Packages
Regulator
Renovation
Contracts
Facilities Management
Project Management
Value Chain of FM?
4
Strategy& Branding PrequalificationBenchmarking &
Standardization
Facilities Management
Strategy
FacilitiesManagementProcurement
Facilities Management
Modeling
Facilities Management
Operations
Service Optimization
CorporateQuality Manual
FMOperations
Award & Mobilization
OperationsQuality Manual Tendering
FMQuality Manual
Why FM?
Sustainability:The indispensible framework to sustain and
maintain the invested assets in the built environment.Convenience:
The management of occupied habitats to meet demands and expectations of end-users.Growth:
The tools to extend both life cycle and value of the Real Estate products.
Integration:The knowledge and professional applications to integrate systems and preferences of Real Estate.
5
Strategy of FM?
6
20%
35%20%
25%
Market SharePublic Corporates Commercial Private
35%
25%
20%
15%5%
Target QualityTier-1 Tier-2 Tier-3 Tier-4 Tier-5
25%
40%
20%
15%
Marketing ToolsFlayers e-Mart Ads One-to-one
25%
60%
10% 5%
Service ExpectationsConvenience Cheapest Auditability Attire
Corporate of FM?
7
Quality
Corporate
Operation
Administration
Procurement
Contracts
Customer Care
Audit & Improve
Call Center
Service Zones
Service Packages
Service Enabling
Clients
Service Managers
Teams Leaders
Manuals
Templates
Records
Strategy
Biz Development
Communications
How FM?
Baselines: Convenient Scope & Specifications of Service Trained Supervisors & Attendants Adequate Pricing against the Service Customer Relation Management Governance & Key Performance Indicators
Service Packages: Soft Service Engineering Service Health, Safety and Security Service Space Making Management Commercial Service
8
FMCO
FM Corporate Team?
9
The Board
Managing Director
Snr Mgr Hard Service
Snr Mgr Soft Service
Snr MgrAdministration
Quality OfficeFMO
Strategy & Biz Dev
Back of House
Enabling Facilities
Stores & Workshops
Contract
Account Director
Field Team
Contract
Account Director
Field Team
Contract
Account Director
Field Team
Contract
Account Director
Field Team
Snr Mgr HSSE Service
Snr MgrProperty Mgt
Call Center
Outsourced
Staff
EquipmentsSubcontractors
FM Field Team?
10
Account Director(Office 1,000,000 ft2+)
Team Leader Others
Team LeaderHousekeeping
Receptionists
SupervisorEngineering
SupervisorBMS
OfficerClient Relations
Mgr Reception
MgrSoft Service
Mgr Engineering
Mgr HSSEMgr Security Ops
SupervisorCar Parking
OperativeCar Parking
Team Leader BMS
Team LeaderEngineering
TechnicianBMS
TechnicianEngineering
OperativesHousekeeping
OperativesCLN + LSC + FCD
Document Controller
Team LeaderSecurity Ops
GuardsSecurity Ops
Mgr Fit-out
Call Center
When FM?
During Development Planning: Outline convenience of space descriptions Outline convenience of finishing materials
During Design Development: Approve durability and functionality of materials
During Construction: Approve Testing & Commissioning Take over premises and O/M manuals
Post Construction/Asset Management: Property Management & Operations Operations of FM Service
11Target
Roles of FM?
12
Developer
Facility Manager
Project Manager
Construction Team
Lease Operations
Tenancy Operations
Tenant/Client
< 1985
1990
Developer
Facility Manager
Project Manager
Construction Team
Lease Operations
Tenancy Operations
Tenant/Client
2000
Developer
Facility Manager
Project Manager
Construction Team
Lease Operations
Tenancy Operations
Tenant/Client
Developer
Development Manager
Facility Manager
Project Manager
Construction Team
Lease Operations
Tenancy Operations
Tenant/Client
2005 <
Value of FM?
1:5:20 Theory: Respectively; costs of EPC and FM during the Life Cycle of a Building
4:3:2 Role: Respectively; costs of Manpower, Consumables and Management to provide the FM Service
Service Packages:Tier One, Tier Two, and Tier Three
ROI Framework: Invoicing Cycle of 90:120 days Recovery of Invested Capital in 3:5 years Conservative Profitability 20%
13
Tier SFT ENG HSE
1 31% 59% 10%
2 21% 41% 38%
3 31% 36% 33%
Future of FM?
14
Conventional& Basic FM
Conventional& Basic FM
Environmental& Advanced FM
Environmental& Advanced FM
Futuristic& Innovative FM
Futuristic& Innovative FM
EngineeringHousekeeping
Security
EngineeringHousekeeping
Security
SustainabilityIntelligent BldgCarbon Control
SustainabilityIntelligent BldgCarbon Control
Green BldgEnergy Control
Business Support
Green BldgEnergy Control
Business Support
Facilities MgtFacilities Mgt Community MgtCommunity Mgt Town MgtTown Mgt
HabitatHabitat UrbanUrban MetropolitanMetropolitan
Business DrivenBusiness Driven Socially DrivenSocially Driven Politically DrivenPolitically Driven
1990th 2010th
21st Century
Immature Market Mature MarketTime
Ope
ratin
g M
argi
n +15%
+/- 0%
Single Bundle Service Providers IFM Companies
(GCC $ 900 Billions by 2030)
FM in UAE?
Industry: Regulated by Local Authorities (RERA & EDD) 10-15 Cos. provide Professional FM Service Many Cos. provide independent bundles
Market: MENA Leader of $8 billion; with 11% growth Estimated market value by 2045 at $700 billion
Resources: The only MENA FM Consultant operate in UAE Most MENA FM Professionals work in UAE. MEFMA had been launched in UAE
15
FM Contractors:Serco,Emril,Emcor,Dalkia,Imdad, Serve U, Farnek Avireal, Idama, Obron, and Drake & Scull
FM Consultants:Reliance FM,Mace Macro
Common Packages of FM?
16
HSSEPackages
EngineeringPackages
SoftPackages
Landscape& Gardens
HousekeepingService
Reception& Front Office
Façade Cleaning
Specialized Cleaning
BMSManagement
Engineering Management
Plant Management
ICTManagement
AV SystemsService
HealthManagement
Safety Management
EnvironmentalManagement
Security Management
Pest ControlService
LookLook & Feel Feel
Tier
One
Tier
Tw
o
Tier
Thr
ee
FM in UAE; BD Business Development?
Service Packages: Residential sector needs Basic Tier-1 Commercial sector needs the common Tier-2 High-End & Public needs Tier-3 Independent Permits for Security Services
Target Clients: Generally; Government and Public Sector Corporates and Foreign-owned facilities Educational & Healthcare facilities Residential free-hold properties
17
FM Quality Manuals?
18
FM Ops Manual(FM Operations)
CorporateQuality Manual
FM Quality Manual(FM Baselines)
Specifications
Deliverables
Measures
MethodStatement
Procurement Management
Management & Supervision
The Brand KPIs, Efficiency & Technical Audit
Corporate PerformanceFeasibility
Strategy
Obligations
FM in UAE; SWOT?
Strengths: Hands-on-the-trade with appropriate skills Chances to attract professionals within UAE Strong networking within UAE
Weaknesses: Mature market, with defined pros & cons
Opportunities: Acute demand for reasonable service Growing demand for quality and auditability Diversify markets, Clients and Soft Resources
Threats: High competition on Rates19
FM Client Interfacing?
20
Clients
FM Provider
Landlord
CR Mgt
Call Center
Planning
Operations
Operations
Satisfaction
KPIs
CAX
Quality Manual
FM in UAE; Business Plan ?
Corporate Targets: To be among Top Ten FM Co. within 5 years To be among Top Ten Market Leader in I-FM To evolve into T-FM by 2020 To develop a parallel FM Training Service
Commercial Targets: To serve 30 million ft2 within 5 years To be main service provider for the Government
Financial Targets: To turn from Debt into Profit in 2 years Growth rate will be directed by the Board
21
Budgeting of FM?
22
Total Year-1 Year-2 Year-3 Year-4 Year-5INFLOWS
SALES 35,100,000.00 2,400,000.00 8,850,000.00 7,950,000.00 7,950,000.00 7,950,000.00 OUTFLOWS
PROJECT COST (12,994,800.00) (1,365,000.00) (3,276,000.00) (2,784,600.00) (2,784,600.00) (2,784,600.00)OPEX (1,148,250.00) (205,050.00) (235,800.00) (235,800.00) (235,800.00) (235,800.00)
SALARY (9,062,000.00) (1,449,200.00) (1,903,200.00) (1,903,200.00) (1,903,200.00) (1,903,200.00)CAPEX (75,000.00) (75,000.00)
NET COMPANY CASH FLOW 11,819,950.00 (694,250.00) 3,435,000.00 3,026,400.00 3,026,400.00 3,026,400.00 EQUITY INJECTION (694,250.00)DIVIDENDS (50%) 50.00% (1,370,375.00) (1,513,200.00) (1,513,200.00) (1,513,200.00)
CUMULATIVE CASH FLOW TO THE COMPANY (1,388,500.00) 2,064,625.00 1,513,200.00 1,513,200.00 1,513,200.00
CASHFLOW TO EQUITY INVESTORS (694,250.00) 1,370,375.00 1,513,200.00 1,513,200.00 1,513,200.00 Weighted Average Cost Of Capital (WACC) 10.00%
COMPANY NET PRESENT VALUE (NPV) 8,427,713.94 COMPANY INTERNAL RATE OF RETURN (IRR) 484.33%
Equity NPV 3,611,408.62 Equity IRR 201.58%
PROFIT & LOSS ACCOUNTSALES 2,400,000.00 8,850,000.00 7,950,000.00 7,950,000.00 7,950,000.00 COST OF GOODS SOLD (1,365,000.00) (3,276,000.00) (2,784,600.00) (2,784,600.00) (2,784,600.00)GROSS PROFIT/(LOSS) 1,035,000.00 5,574,000.00 5,165,400.00 5,165,400.00 5,165,400.00 EXPENSES
OPEX (205,050.00) (235,800.00) (235,800.00) (235,800.00) (235,800.00)
Salary (1,449,200.00) (1,903,200.00) (1,903,200.00) (1,903,200.00) (1,903,200.00)
Depreciation (15,000.00) (15,000.00) (15,000.00) (15,000.00) (15,000.00)
EARNINGS BEFORE INTERST AND TAXES EBIT (634,250.00) 3,420,000.00 3,011,400.00 3,011,400.00 3,011,400.00
FM in UAE; Next Steps?
23
Action Item Target Deadline
Proposal Negotiation & Approval 0 Day
MOU on Engagement and Article of Association 10th Day
Launch Corporate Analysis and Planning 10th Day
Acquisition of Corporate Station 15th Day
Legal Formation of FMCO 15th Day
Launch Resources Planning, Allocation and Appointment 20th Day
Launch Marketing and Business Development 20th Day
Sign off the 1st FM Contract 75th Day
Kick off the FM Service of 1st Contract 100th Day
FM in UAE; Timeline ?
24
Implementations
Phase-3Verification & Improvement
Phase FourProjects Operations & Development
Phase-2Identification
Phase-1 Realization
Sign Off AOA
Y1M2Y1M1 Y1 M4-6 Y2Y1M2 Y1 M6-12
Sign Off
FMCO
Corporate Planning
Prop
osal
Sustainable Contracts & Projects
Corporate Planning
CorporateFormation
Corporate Expansion
Resources Planning
Mobilize
Sign Off
CONT-1
Y3
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