Growth in the FM corporate outsourcing market is expected from 2012 onward, but will be slow and in line with construction projects being finished.
According to the latest FM outsourcing report from AMA Research, “Maturity in the corporate FM market makes it heavily dependent upon the economic climate.”
“As a result, the market is expected to exhibit some stabilisation and subsequent growth over the short to medium term, recovering only slowly from 2012 as construction activity improves and new projects reach completion.”
The report, Facilities management outsourcing: corporate sector market, 2011-15, focuses on commercial offices, retail, entertainment and leisure, manufacturing and warehousing, energy and utilities, and privatised transport services.
Joining a growing list of corporations that are moving their real estate operations to a third-party provider, financial services firm Principal Financial Group (NYSE: PFG) today outsourced facilities management for its 4.3 million sq. ft. of office space to Jones Lang LaSalle.
The five-year contract includes Principal’s 2.4 million sq. ft. corporate campus in Des Moines and more than 150 owned and leased field offices across the United States and in more than 15 countries throughout Asia, Australia, Europe and Latin America.
The deal is remarkable for the range of services it will bring into play, says Richard McBlaine, international director at Jones Lang LaSalle. “They wanted a company that could bring a complete suite of integrated services, everything from real estate consulting through transactions, project management, facility management, occupancy planning — basically the entire suite of services that we provide to occupiers.”
Contact: Richard Kadzis, +1-404-589-3240, email@example.com, or Bailey Webb, +1-404-589-3216, firstname.lastname@example.org, both of CoreNet Global
Jones Lang LaSalle announced today that it has been awarded a 4.3-million-square-foot real estate services contract for facilities management for the Principal Financial GroupÂ® . The contract includes the 2.4-million-square-foot corporate campus of The PrincipalÂ® in Des Moines, Iowa in addition to its global field offices.
The report relies heavily on the conceptual framework of a U.S economy in a balance sheet recession.
RadioShack Corp. today announced the appointment of Dorvin D.
WASHINGTON, DC-So it happened. Within hours of an apparent default, Congress came together and delivered a bill that would raise the debt ceiling and work towards reducing spending.
A philosophical discussion in the outsourcing industry. Is outsourcing a good thing? Will the 30 year trend toward outsourcing and globalization continue? In the July 30, 2011 issue of The Economist, a column explores these topics. Although the author appears to confuse off-shoring with outsourcing, they makes a valid point. Outsourcing can go well, it can go wrong and it needs to be executed properly.
Some companies, such as Boeing, are bringing more work back in-house, in the jargon. But the business logic behind outsourcing remains compelling, so long as it is done right. Many tasks are peripheral to a firm’s core business and can be done better and more cheaply by specialists. Cleaning is an obvious example; many back-office jobs also fit the bill. Outsourcing firms offer labour arbitrage, using cheap Indians to enter data rather than expensive Swedes. They can offer economies of scale, too. TPI points out that, for all the problems in America, outsourcing is continuing to grow in emerging markets and, more surprisingly, in Europe, where Germany and France are late converts to the idea.
Companies are rethinking outsourcing, rather than jettisoning it. They are dumping huge long-term deals in favour of smaller, less rigid ones. The annualised value of “mega-relationships” worth $100m or more a year fell by 62% this year compared with last. Companies are forming relationships with several outsourcers, rather than putting all their eggs in few baskets. They are signing shorter contracts, too. But still, they need to think harder about what is their core business, and what is peripheral. And above all, newspaper editors need to say no to the temptation to outsource business columns to cheaper, hungrier writers.