Outsourcing of Real Estate and Facilities Management Activities Continues to Increase, According to KPMG Pulse Survey

NEW YORK and LONDON, Sept. 14, 2011 /PRNewswire/ -- Nearly all buyers currently outsourcing real estate and facilities management (REFM) activities expect to maintain or increase outsourcing usage in the short to medium term, according to the inaugural KPMG 2011 global real estate and facilities management (REFM) outsourcing pulse survey.

The KPMG survey polled both users of REFM outsourcing and REFM outsourcing providers, with the majority operating in the U.S. and approximately 30 percent operating globally or in the Europe and Asia Pacific regions. In the near term, buyers were more bullish than service providers about the projected increase in outsourcing.  

Among the buyers surveyed, 50 percent said they plan to increase outsourcing of REFM services over the next one to two quarters. In comparison, just 21 percent of service providers expect demand levels to increase during that period, with an equal number expecting demand levels to decrease. Longer term, over the next 12 months, 44 percent of buyers plan to increase their REFM outsourcing, while a much greater 72 percent of service providers expect outsourcing demand to increase in that time frame.

"The differing outlook between buyers and service providers is likely due to estimations of when new business will go into service provider pipelines from the buyers, compared to the service providers' projections of when that business will actually consummate into new deals," said Stan Lepeak, research director in KPMG's Shared Services and Outsourcing Advisory group.  "Service providers may also have higher longer-term demand projections due to expectations for an improved economy in 2012."

"Although some organizations are considering outsourcing REFM services for the first time, others that are already outsourcing are looking for opportunities to outsource more sites and services, as well as consolidate or restructure their current contracts to realize additional savings," said Ron Walker, principal and REFM sector leader in KPMG's Shared Services and Outsourcing Advisory group.

Walker added, "As for REFM service providers, while their business continues to grow, the marketplace remains very competitive. There is more pressure on service providers to deliver additional cost savings and share more risk, and those providers with the right talent, strong innovation, and continuous improvement programs should be most successful in meeting this need."  

Both buyers and service providers identified reduction of operating costs as the top driver of REFM outsourcing, with 70 percent and 75 percent of respondents, respectively.  The second most common driver cited by buyers (41 percent) was improvement of the performance of REFM processes, which was identified by 32 percent of service providers. The benefit ranked second by service providers (45 percent) was improvement of global delivery and operating models, cited by 33 percent of buyers.

Among organizations that are currently outsourcing REFM activities, the most commonly outsourced REFM process area was workplace services, which includes janitorial, cafeteria, and amenities services. Among buyers, 60 percent have already fully outsourced workplace services, 27 percent have partially outsourced them, and just seven percent have no plans to outsource this type of work. The second most frequently REFM outsourced area was facilities (HVAC, electrical, mechanical, building repair), which were fully or partially outsourced by 85 percent of survey respondents.  

According to the service providers polled, 75 percent cited increased demand for facilities management services (e.g., management of facilities services, workplace services, property management), and identified portfolio strategy and planning services as the next greatest area of increased demand.  

"While most organizations still tend to outsource tactical REFM services and perform many strategic activities in-house, a growing number of service providers are able to integrate outsourcing into existing business operations to provide more high-value and strategic services," said KPMG's Walker.

Lepeak added, "Where an end-user organization needs to be in their REFM outsourcing continuum should be a constantly evolving process, where ultimately an organization should move to what KPMG calls an 'extended global enterprise,' incorporating a broad range of service delivery models and techniques."

About the KPMG REFM Outsourcing Pulse Survey

More than 200 respondents were surveyed for the KPMG REFM Outsourcing survey, with approximately one-third of the respondents from end-user buyer organizations currently undertaking REFM outsourcing, and two-thirds of respondents representing third-party providers of outsourcing and related REFM services. The majority of both buyers and service providers are focused on the US market, with approximately 30 percent of both groups operating globally. All major REFM service providers are represented in the results.

The REFM Outsourcing Pulse Survey is the newest addition to the KPMG Pulse family of surveys, which seek to provide insights into trends and projections in end-user organizations' usage of shared services, outsourcing, and third-party business and IT services. The Pulse surveys were originally developed by EquaTerra, a leading sourcing advisory firm acquired by KPMG in February 2011.

For a comprehensive discussion of the KPMG REFM Outsourcing Pulse Survey, please register for the webcast on Wednesday, September 14 at 11 a.m. (EDT) by clicking here. Presenting on the webcast will be KPMG's Research Director Stan Lepeak, REFM Senior Manager Doug Burr, and REFM Director Allen Schwartz. To obtain a copy of the KPMG REFM Outsourcing Pulse Survey, as well as previous Pulse Survey reports, please go to www.equaterra.com/pulse, available immediately following the webcast.

About KPMG

KPMG is a global network of professional firms providing Audit, Tax and Advisory services. We operate in 150 countries and have 138,000 people working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such. KPMG International performs no professional services for clients nor, concomitantly, generates any revenue.

SOURCE KPMG

WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM?

440k+
Newsrooms &
Influencers

9k+
Digital Media
Outlets

270k+
Journalists
Opted In

GET STARTED