Al-Futtaim Engineering’s Facilities Management division on retaining quality in the FM sector
fmME sits down with three key members of the Al-Futtaim Engineering’s Facilities Management division: Darko Macura, CEO at Al-Futtaim Engineering and Technologies, Sanela Habbab, general manager – operations and sustainability, and Yousef Ali BinZayed, general manager – facilities management
Al-Futtaim Engineering and Technologies’ FM division is a well-oiled operation and it never believes in a one-man (or woman) show. In fact, it’s the team that completes the brand. To understand the firm’s FM strategy, fmME sat down with three key members of the team: Darko Macura, CEO at Al-Futtaim Engineering and Technologies, Sanela Habbab, general manager – operations and sustainability, and Yousef Ali BinZayed, general manager – facilities management.
To give a background, Al-Futtaim Group, which has been in operation since 1974, is divided into several verticals that include retail, auto, real estate, malls, finance and contracting. Within the contracting vertical, there is Al-Futtaim Construction, Al-Futtaim Engineering that includes MEP and facilities maintenance, and Al-Futtaim Technologies that provide Alcatel Lucent as well as Genesys Customer Experience solutions. Furthermore, the firm is UAE’s retailer for TOTO sanitary ware and JCI/York for airside chillers and DX units.
Briefly pointing our Al-Futtaim Engineering’s FM activities in the region, Macura says: “We provide our services to both government and private sector clients. As part of our offerings, we deliver high-quality facilities maintenance services that include energy management and retrofit solutions.” He adds that his focus now is on FM because “that’s the part of the business the company wants to grow”. BinZayed adds that the firm is also complementing its services to include smart solutions that will bring in savings for the customers by servicing their assets, and thereby, prolonging the life cycle of the assets.
The team is well-versed with the ongoing FM trends in the industry. Macura observes that a large number of companies are starting to outsource their facilities maintenance requirements rather than deliver them in-house. This allows the clients to reduce their head count and simultaneously avail a professional service from the outsourced suppliers. He adds: “At the moment, we think 55% of the FM work in the UAE is done in-house, whereas 45% is outsourced. It will be the other way around in the next five years, that is, around 55% will be outsourced. So there’s a big trend of companies not carrying out maintenance in-house anymore, but subcontracting the work.” Macura gives an example by pointing out that banks which own a lot of real-estate are “now outsourcing their maintenances services instead of doing it themselves”.
Habbab says that having a specialised service provider to carry out maintenance can help in better quality services being delivered at lower prices. She says: “The disadvantage of carrying out maintenance yourself is if something goes wrong, you can’t penalise yourself. But if you have a service provider, you can set KPIs and SLAs, and there will be more accountability.” Giving an example, Macura says that the lifespan of MEP systems can be extended to another five or ten years by having professional services on-board.
On energy and technology
Habbab, whose main focus is on energy management, believes that facilities management isn’t only about maintaining existing assets but optimising and the getting the best retrofit solution. She adds: “FM is also about replacing with much better assets by using latest technological advancements, and overall, reducing the energy consumption in the building.”
As the energy retrofit market is highly competitive and skilled, Al-Futtaim has collaborated with experts in the field such as Johnson Controls, Siemens and Taka Solutions, which provide energy solutions. Talking about their partners, Macura says: “They’re leaders in providing energy solutions; however, our digital transformation team works with them and we carry out the installation or replacement of the equipment and maintain systems and services for the contract duration. We pick and choose which companies have the best fit between technology and delivery. Finally, as a team, we guarantee and offer savings to the clients.” The firm has developed a proprietary software that enable customers to leverage future-facing technologies like the Internet of Things, machine learning, blockchain, analytics, and Big Data.
“In some cases, we connect the client’s BMS system to our own CAFM system to monitor the performance of the actual equipment. If we see that the maintenance being provided is not sufficient, we increase the level of service to ensure that the particular asset does not breakdown unexpectedly. We try and use more technology; we also try and predict what could happen next,” Macura says.
The firm also looks at using the best solutions for a particular project. Giving an example, Habbab says that a dedicated district cooling plant is used at Dubai Festival City, which is an Al-Futtaim Group Real Estate development project that covers 5.2 million square metres and stretches three kilometres along the Dubai Creek. Habbab, who previously was the chief operating officer at district cooling firm Emicool, says that district cooling is the “most the most effective air conditioning solution”. She adds: “We have the most energy efficient solution deployed at Dubai Festival City, and ultimately, it comes to the knowledge and experience on how to manage this oversized district cooling plants. The experience comes in managing the delta T in the properties and pumping the right flow to the requirements. The solution is to not affect the air conditioning comfort of the residence, and at the same time, save energy.”
Macura says that apart from maintaining district cooling in-house for Dubai Festival City, the firm can offer the same service to other clients. BinZayed adds proudly: “The majority of the FM hard services is done in-house by Al-Futtaim Engineering. We have MEP maintenance, firefighting solutions, selling and maintaining of BMS solutions, elevators and escalators, and even scaffolding, all under the umbrella of Al-Futtaim Engineering. This is one of our strengths.”
When it comes to technology, Macura feels that there is a long way to go for the FM industry. He says: “It’s not just about monitoring and managing the productivity of our people but it’s also about managing the efficiency of the equipment. There’s a long way to go with the integration of the BMS and CAFM systems in the sense that they are more automated and depend less on people monitoring screens and looking for problems. We’re working together with software providers to integrate systems. Our in-house technology team is involved, and we are, in some cases, developing our own apps.” BinZayed adds: “Customers can have more visibility and clarity about their assets, by having their own dashboard. That is something we provide in our smart solution.”
Talking about the major challenge facing the FM sector, Macura says, is when clients demand lower prices, which creates a downward price spiral. With such a trend, he says, the FM providers will become limited in their capabilities to employ skilful resources. He says: “It is a very short term view to think that by lowering FM requirements, you will be able to save costs. In reality, the life of the assets will be shortened and major capital need to be deployed to replace the ‘not-so-well-maintained’ equipment. The challenge is to ensure that clients do not get just the lowest price. It’s important that the right solution and the right level of service is provided. Otherwise, savings are only achieved in the first and second year; by the fifth or tenth year, the equipment will require a lot of maintenance or replacement, ultimately costing more.”
Macura believes that several new FM companies think that by offering a lower price they will win a bigger share of the market. He adds: “All they’re doing is shortening their own lifespan as a newcomer to the sector. Our philosophy is to not compete to the end on every package. We work with clients who believe in their assets and who believe in us, and are willing to pay a decent price. We don’t want to be competing with smaller companies. We’re selective in the same way the clients are selective towards us.”
He says that although their clients are free to experiment with other FM providers, most Al-Futtaim clients have always returned within a year’s time. He says: “We get a call [from old clients] after six months or a year, to help them once again in maintaining their assets. We let them experience something different, hoping that they will come back, and in most cases, they do.”
The number of new FM companies in the market has been increasing in the last couple of years, according to Macura. However, he feels that by 2021, several companies will be filtered out and only the capable ones will survive and continue to prosper.
When asked about Al-Futtaim’s preference of output-based contracts over input-based contracts, Macura admits that the latter is out-of-date and seldom preferred by clients.
“We are big advocates of performance-based contracts. This ensures excellent services provided to the clients requirements and it allows optimisation of resources. The biggest challenge is when the client wants input-based or a hybrid of input- and performance-based contracts, which does not allow the supplier to deliver properly. Performance-based contracts is the best option because you are obliged to provide excellent service. How can you reduce costs with input-based contracts? If you want ten people, it will cost you to maintain those 10 people. You can reduce the number of people and still provide a good service. We hope performance-based contracts will become the norm,” Macura says.
BinZayed adds that there are some customers who insist on a hybrid contract model, and from an operations point of view, there will be huge commercial issues between the service provider, the FM and the owners.
BinZayed says: “If the client insists [on hybrid- or input-based contracts], we try and accommodate it, but we will still recommend performance-based contracts. We always share our best practices with the customer.”
The era of self-regulation
Being a strategic member of MEFMA (Middle East Facilities Management Association) allows Al-Futtaim Engineering and Technologies to exchange ideas with other members at MEFMA. Al-Futtaim sits on the management board of MEFMA and discusses best practices across the board.
Macura feels that the FM sector still needs tighter regulations in the region, and that the only way forward is self-regulation.
He says: “We try and regulate ourselves. For example, all our staff have got MEFMA accreditation, and they meet the world benchmark requirements of capabilities and skill. We carry out training of our operatives on a regular basis. We try ‘to regulate ourselves’ to the highest standards.” BinZayed explains that there are two approaches to carry out self-regulation. One is to use the standard practice that the market follows and to learn from that, and the other is to use bodies like MEFMA, who are engaged with both the service providers and the owners of the assets.
Macura concludes by saying: “Our owners are extremely keen on all of our assets being as energy efficient as possible, not only to save costs on utilities but also to be as environmentally friendly as possible.”
This inherent push within the group of being energy efficient has made Al-Futtaim an epitome of excellence.