Facility Management in Latin America: What First-Generation Companies Need To Know

A range of economic, demographic, and natural resource factors are raising Latin America’s profile among multinationals as they formulate their real estate portfolio strategies. Among the factors contributing to its potential are numerous emerging economies, a growing middle class, a vibrant labor market and a pent-up demand for commercial real estate and premium industrial space.

Newmark Knight Frank’s Global Corporate Services Division in Latin America is dedicated to helping multinational organizations identify and evaluate corporate real estate opportunities in the region and navigate local markets and cultures.

As part of this effort, we’ll be offering a series of blogs highlighting important features of Corporate Real Estate (CRE) in Latin America. This next installment in the series outlines the benefits of outsourcing Facility Management services to an integrated service provider and what first generation companies need to know to make the right decision.

Beyond optimizing resources and space and cutting costs, Facility Management (FM) is also about the quality of your workplace and the extent to which it supports team connectedness, collaboration, inspiration and enjoyment. The workplace experience is central to every organization's success in attracting and retaining the best talent at every site in a real estate portfolio, whether that be a corporate headquarters, a call center, a data center, a warehouse or a production facility.
But as important as FM is, most companies find it burdensome, if not wholly counterproductive, to divert in-house resources from their core business to the processes, tools and technologies associated with FM soft services (e.g., janitorial, security, cafeteria) and hard services (e.g., asset management, electrical and mechanical maintenance).
Instead, they take one of two paths. Either they are performing some FM activities in-house and contracting with a host of small, siloed service providers for the rest, or they are consolidating the full scope of FM services with a single, integrated provider. 

We characterize a 'first-generation' company as one that decides to partner with an integrated provider for the first time. They've reached a milestone in their FM maturity, where FM becomes a strategic imperative. Their leadership has closely defined their objectives and they've built a sophisticated set of needs and expectations around FM:
  • Consistency across the portfolio
  • Cost certainty
  • Risk mitigation and management
  • Employee retention and motivation
  • Reporting of performance and financials
  • Compliance with local regulations
  • Health, Safety & Environment
  • Business continuity
  • Process optimization
Only by consolidating FM outsourcing to one provider, as opposed to a dozen smaller siloed vendors, can a company take a coordinated, holistic and strategic approach to solving for such a complex, interdependent set of needs and ensure consistency across their entire portfolio.

An FM integrator careful to align its processes with your desired outcomes and business needs upfront will also take the time to understand the drivers that will move your organization forward. Subject matter experts in both hard- and soft-services, equipped with local knowledge, can lead first-generation companies in LATAM through the entire FM lifecycle. They'll deliver a range of services, from assessing each facility's and asset's physical condition, energy consumption and local requirements to establishing baseline FM costs, identifying cost reduction opportunities and setting service level requirements.
Through an empirical analysis of the entire portfolio, they'll not only assess how your organization works now, but they'll also identify how you can improve operations into the future. From there, an FM integrator mobilizes additional resources to model scenarios based on your company's unique situation. Its subject matter experts will develop action plans that encompass policy changes, new technologies, training, ongoing improvement and adaptation strategies as your workplace evolves.
First-generation companies are looking for cost savings as well. By partnering with a large, integrated FM service provider that may have tens of thousands of vendor relationships, you're able to access economies-of-scale and purchasing power unattainable through small vendors. Additionally, by offloading non-core projects, like building or asset maintenance, to an integrated service provider, you're able to redirect financial and human resources to value-add activities central to your company's business.
Going back to FM's dominant purpose – enhancing the workplace experience – it's essential to understand that, while FM may not be core to your business mission, it is critical to your business. It touches virtually everyone in the organization. Handing off FM to a team of experts who develop strategies for improving interactions between individuals and their work environment sends a message to your employees: you want to understand how they work and what's important to them and you're willing to invest in them. In fact, 'The Human Experience' has emerged as one of the most important new topics in FM, given how quickly the nature of work, technology and workforce demographics are evolving.
In the LATAM region, especially, an integrated FM service provider must be able to deliver a consistent service level for every facility in real estate portfolios that may cross borders. Look for a partner with a presence across LATAM – one with a global platform but with localized expertise that can standardize their FM services regardless of country, language or cultural differences. A first-generation company's most significant decision lies in choosing an integrated FM service provider that can enhance the employee experience, no matter where they work.

For more information, contact:

Gadiel-Sanchez.jpgGADIEL SÁNCHEZ
Senior Managing Director, Facility Management
Global Corporate Services, Latin America

Valdez-Maria.pngMARÍA VALDEZ
Managing Director, Facility Management
Global Corporate Services, Latin America

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