Facility management e finanza immobiliare
[for an ONLINE CONSULTANCY by the Author, require it at this LINK]
The true Talent of Complexity is being able to imagine possible scenarios better and before others…
Fewer and fewer Italian economists and politicians dare to disregard the deflation scenario, totally discarded up to a year ago…
The impact will be on all market sectors, and even more on previously “doped” real estate market, as Reddy’s Group Italian residential market evolution from 1975 clearly shows:
This elegant and concise chart depicts price vs transaction indexes which rotates over time with very different cycles:
1975 – 1985 (10 years) cycle was closed in 1985 at almost same 1975 value, with a gap between max and min values of ca. 20%.
1985 – 1996 (11 years) cycle was closed in 1996 with an abrupt price collapse of ca. 25%.
The ongoing 1996 – 2014 cycle (18 years… to date) was “doped” by huge monetary increase in all markets since 1997. The transaction index already collapsed without equivalent price index reduction, due to persisting Italian savings heritage, but this cannot last much more…
What may happen?
Triggered by a possible real estate significant deflation (30% to 50%) and further stressed by seriously jeopardized industrial and political systems, Italy will be forced to a new management culture stressing Value Optimization of any asset, activity, service delivered, and not simply the Selling Opportunities.
Following chart depicts how much management costs impact the initial construction cost during a 50-year life-time of a commercial building: 5 times ! [O.Tronconi: La complessità evolutiva del Facility e del Property Management: verso il Capital Asset Management].
What to do in the Italian Facility Management sector? Simple: understand Italian market!
Following chart shows Service markets in major European countries: the potential outsourced services value [b€], the actually outsourced services and the integrated service market. [IFMA, 2010].
In a nutshell:
- Italy is a major player with 43b€ of service potentially to be outsourced (two thirds of biggest French market);
- Italy in a “giant” in terms of outsourced service (62% of total, just slightly lower than Germany and Netherlands);
- Italy is a “dwarf” in terms of outsourced integrated service (just 11% of total)!
Italian companies love to outsource at single-service providers, often “mamas&papas” companies easier to “squeeze”…
Latin motto divide et impera (separate and better command…) seems still in Italian DNA.
Cultural issues (control vs empowerment), together with structural ones (small companies vs complex and structured ones) and social ones (family ownership and management vs professional management), all resonate together to require a significant and urgent evolution.
Deflation, as an economic and social trauma, with resulting opportunities for culturally and financially more advanced businesses, may result in a profitable harvest of huge service market sectors for Integrated Facility Management providers.
Yet, Italian companies already experienced an Integrated Facility Management upsurge during 2007 – 2012 period, but resulting in major disappointments due to a lack of advanced complexity and partnership culture in Italian FM management.
As Mariantonietta Lisena (IFMA – Italy Chapter) replied to Nicola Antonucci’s post (LINK): Italy is wasting huge market potentials. The fault is on both sides: Clients and Providers, since it’s a cultural problem, and only new and/or external players may change it.
An FM Cultural & Connection change
The solution, as well as huge opportunities, stems from:
- New FM Management Culture based on deep knowledge of Complexity principles, in order to see, understand and effectively make decisions in more and more complex situations with their continuous, frequent and, especially, unpredictable changes;
- New FM Players, to effectively introduce in Italy both new Management and new Financial Cultures, all blended inside a deeply lived Governance culture;
- New FM Value Propositions which, instead of focusing exclusively the “ideal” Single-Global Provider frequently conflicting among different internal service cultures and methodologies, better focuses two FM segments:
- Technology Facility Management: services, methodologies, technologies, people and management culture which best fits real estate, construction, restructuring, infrastructural, equipment realization, installation, maintenance, management;
- Soft Facility Management: services, methodologies, technologies, people and management culture which best fits HR-intensive services.
- Italy, as well as other Countries, is facing a structural deflation process which creates excellent financial and economic opportunities for New Players;
- Italian FM market needs New Players with modern and scientific Management Culture, understanding, coping with and making effective decisions in very complex scenarios;
- Italian FM companies, both Clients and Providers, need New Players with true Partnership way of working and living;
- Italy needs New Players with strong embedded Governance and Corporate social Responsibility principle and best practices.
Significant Crisis, significant Opportunities – as Chinese “Crisis” logogram reminds us (Wei-ji = Danger + Opportunity):
And remind: Chaos helps well prepared minds! – L. Pasteur’s (paraphrase).
Oliviero Tronconi & Nicola Antonucci
November 11th, 2014