Modus operandi

fmME: What do you see as a viable alternative?

NH: What I would like to see happen is a radical change in the way FMs contract with their clients. I think some models used in Europe can be easily transposed here.

They should use performance management models, so you have a defined contract output, linked to very objective measurements and qualified against a financial element of your contract, which can be put at risk for non-performance.

The other element I’d like to see, one which we are promoting, is an absolutely transparent cost model , where both the supply chain and our own organisation costs are exposed to an absolute level.

We then agree a management fee, which covers profit and overheads. This is defined from day one and then the objective beyond that is to reduce the supply chain costs through management, innovation and technology.

The whole object of FM is not to squeeze profit out of a fixed price contract but to provide the best cost/value ratio. This role reverses, we are there as the client’s custodian of the cost base associated with maintaining that building; we are then incentivised to maintain a high standard and reduce costs at the same time.

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fmME: At the end of the day, what do you end up with?

NH: The result, then, is an optimised cost. It is this cost-value equation that people need to understand and manage professionally.

Property owners are investing huge sums in properties. We’re in an extremely hostile environment in terms of degradation of materials and machinery and yet owners scrimp and save on the technical management and maintenance of this equipment.

There is a proven processes, called lifecycle management, where there are numerous examples of where asset lifecycle management actually reducing overall lifecycle costs for a building.

If you look at buildings we hope are going to be standing in 20 years, you don’t want owners dipping into their pockets for large capital sums in 10 years time, to replace equipment that if maintained properly would probably have another 5 -10 years in it. If management technology is brought in alongside FM, along with different approaches to contracting, you can have a much more effective industry and FMs can be far more effective in helping property owners long-term.

FMs are there to operate buildings effectively and protect assets for owners.

fmME: How can you effect change in the FM industry?

NH: We will engage with organisations and customers who want to explore this.

This transition needs to occur and there are a number of ways it can happen. MEFMA is an ideal platform that can be used to introduce these principles and ideas and some of it can be accelerated through by legislation. The second thing is to get some of the bigger client organisations to break the mold and go after different contracts and move toward the output specification models linked to asset life cycle management.

This will allow FM companies to be more innovative in return. Clients need to move away from prescriptive tendering, leaving FM organisations to put forward a more innovative approach. It’s going to take a number of years, this is not something that is going to happen overnight.

I think that if I was realistic I predict a very mature FM industry, in the UAE especially, probably within the next 5-7 years. You will start to see a highly credible and professional industry that supports the property owners and affects a better care of their assets.

It is slightly utopian, but the industry has to set its sights high if it wants to achieve that.

fmME: As GM, what do you want Modus to achieve over the next 18 months?

NH: I’d like to see us with a number of premier contracts under out belt, to give us the platform to grow futher. I see us being more active in commercial buildings than in the residential market. I see a larger proportion of our growth occurring in Abu Dhabi and other GCC states.

We need to choose the right customers for a viable business; I don’t want to be the biggest necessarily, I just want to be the most reputable.

I would sooner maintain ourselves as a highly defined player in the market, rather than be all things to all men.

I always see the business being domiciled in Dubai. There is a lot to offer here, but we are still a couple of years away from the market being sufficiently settled for Modus to derive the growth that we anticipate.