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Transcript
Cost pressure is nothing new for facility leaders. What has changed is the operating environment. Multi-site operations have become more complex. Labor is harder to secure and retain. Expectations around uptime, sustainability, and user experience continue to rise.
And yet, many organizations are still operating facilities through fragmented service models. A system is down, a vendor hasn’t shown up, and three different people are waiting on three different answers from three different contacts: the reality of the current operating model is hard to justify.
Alex Freiden, Vice President for Corporate Strategy at ABM, says more than 80% of facility decision-makers cite budget constraints as their top concern. Not only is the old way of working not working, it’s also becoming increasingly expensive.
Shifting to an integrated facility services (IFS) approach alleviates some of these pain points while improving ROI. Organizations that shift to IFS can see within the first year just how much cost is tied to operating model. It’s the shift from firefighting to forward planning that fundamentally alters the cost equation.
The hidden cost of fragmentation
In traditional models, facility teams coordinate vendors. Cleaning, engineering, security, and energy management all operate independently, with separate contracts, systems, and reporting structures.
On paper, this provides flexibility. In practice, it creates drag:
- Decisions are made in silos
- Data is inconsistent or delayed
- Accountability is diffuse
- Labor is duplicated or underutilized
It’s not just inefficient; it’s also expensive. Many organizations unknowingly carry layered costs within fragmented models, such as redundant management structures, inconsistent service standards, and missed optimization opportunities.
Freidin notes that the IFS market in the U.S., U.K., and Ireland is valued at approximately $100 billion today and is projected to grow at double digits over the next five years, outpacing both single-service and multi-service models. Organizations running complex, mission-critical environments are reaching the limits of what vendor management can deliver. They need outcome ownership, not contractor coordination.
The shift to IFS: What happens in year one?
When a facility decides to shift to IFS, the first year is not about dramatic cost cuts. It’s about structural clarity: creating the conditions that make sustained cost improvement possible.
Eugenio Burnier, SVP of ABM Performance Solutions, says the process starts with 60 to 90 days of structured transition work that establishes the operational baseline, defines KPIs, and builds the governance cadence. This phase is distinct from ongoing operations for a reason: getting the setup right is what makes consistent performance possible later.
1. From vendor management to outcome ownership
The most immediate shift is accountability.
Instead of managing a network of providers, organizations move to a single point of ownership accountable for cost, performance, and experience.
This changes behavior quickly:
- Decisions are made faster
- Trade-offs are coordinated, not isolates
- Issues are resolved at the system level, not the service level
Facility leaders stop acting as intermediaries and start acting as strategic operators.
2. From reactive maintenance to predictive control
Reactive work is inherently expensive. It creates downtime, accelerates asset degradation, and forces urgent labor deployment.
When facility systems are monitored continuously through connected technology platforms, the data that was previously scattered across vendor reports becomes actionable.
In the first year of transformation, many organizations establish a baseline through facility condition assessments and begin shifting toward data-driven maintenance strategies.
This includes:
- Tracking asset performance in real time
- Identifying inefficiencies (e.g., energy waste, equipment drift)
- Prioritizing interventions based on risk and ROI
Predictive maintenance extends asset life. In some cases, lifecycle gains of 20–25% are achievable when systems are monitored continuously and adjusted proactively. That’s not incremental savings. That’s deferred capital.
3. From cost containment to cost optimization
In traditional models, cost is something to reduce through cuts, deferrals, or renegotiations. In integrated models, cost becomes something to optimize relative to outcomes.
That means:
- Reducing energy spend without capital investment through operational tuning
- Redeploying labor based on real demand signals (e.g., traffic patterns in airports or campuses)
- Eliminating duplication across service lines
In one example from the field, energy optimization alone delivered six-figure annual savings purely through better data and coordinated execution.
By the end of year one, the conversation with clients typically shifts. The reactive calls become less frequent. The quarterly business reviews stop being about what went wrong and start being about what's next: new sites, capital planning, expanded scope. That shift in the conversation is the clearest signal that the model is working.
Facility leaders can start asking questions like:
- How do we support growth?
- How do we enhance experience?
- How do we align facilities to revenue, not just cost?
Facilities stops being a cost center to manage and becomes a lever to pull.
The takeaway
The pressure to “do more with less” isn’t going away. But most organizations are still trying to solve it within models that were never designed for today’s complexity.
The first year of transformation makes one thing clear: Cost improvement is not primarily a function of budget. It’s a function of operating model.
Move from fragmentation to integration, from reactive work to predictive control, and from vendor oversight to outcome ownership, and cost becomes something you can manage with precision, not pressure.
Facilities isn’t just supporting the business anymore. It’s shaping how the business performs.
