Driving scalability and efficiency
John Nolan, breaks down the business improvement initiatives and enhanced technology platform that is driving the group’s success story
With 30 FM contract wins over the last year, Transguard Group’s managing director John Nolan, breaks down the business improvement initiatives and enhanced technology platform that is driving the group’s success story.
While it is easy to think of Transguard’s operations being limited to its long-time association with the Emirates Group, the truth is that the company boasts an extensive FM portfolio. In fact, contrary to the public perception, roughly 70% of the group’s FM operations is not tied with Emirates.
In addition to working with high-profile entities, such as Emaar, The Select Group and Al Hail Holding, Transguard maintains a FM presence throughout the nation’s retail sector. These include the service of major sites such as the Dubai Mall, Dubai Festival City Mall and the Dubai Metro.
With over 30 FM contract wins over the last year alone, John Nolan, managing director of Transguard Group, breaks down the factors that have and will continue to drive the brand’s success, beyond 2015.
Over the 2013 to 2014 fiscal year, Transguard reported 39% year-on-year growth in revenues to AED552.7mn ($150mn), as well as an increase in profits to AED54.3mn ($14.7mn). According to the annual report, the growth stemmed from increased activity from the UAE’s construction sector, as well as progress in the hotel, hospitality, retail, banking and aviation industries.
During the same period of time, the company also reported a drop in total assets down to AED488.9mn ($1.3mn). This came as a result of the sale of two of the group’s accommodation facilities to a related entity. The proceeds were utilised to repay debt and reduce the group’s borrowings.
Though unable to share specifics regarding the current 2014 to 2015 fiscal year, which is set to close by the end of March, the managing director expects, “an exceptional year for Transguard across all business lines.” In addition to a growing workforce, up by 6,000 staff to approximately 27,000, the company expects revenues to reach AED1bn ($272.mn), by the end of the fiscal year. Significant growth figures are also expected across all operations.
“We’ve got several different business streams that are going to represent over 30% growth year-on-year. In particular, the FM business stream will have over 60% growth,” shares Nolan.
Transguard’s facilities management arm, which was traditionally focused on certain service lines, such as security, airport services and cleaning, has undergone significant development over the last few years.
Following a strategic directive from the members of the board, the group invested resources towards developing a technical maintenance capability, and expanded its overall integrated delivery of FM. In addition to incorporating the right management team to lead, Transguard also focused on developing its technology platform across FM.
Over the last five years, the company has introduced a number of digital improvements to their core services and back-end infrastructure.
To assist in the management of customer properties, Transguard created a sophisticated computer-aided facility management (CAFM) system. Based on FSI Solutions’ Concept Evolution, a cloud-based CAFM application, the system includes mobile-enabled capabilities that enhance the company’s service delivery.
Typically utilised through the Customer Service Centre, the CAFM application automatically converts customer calls directly into work orders. Additionally, the program is connected directly with teams in the field, and ensures requests are sent swiftly and are completed on time. The software can also create work orders from e-mails as well, and can also distribute customer specific reports for review.
“We invest a lot in technology and we see technology as a huge enabler for us to drive efficiencies and increase services moving forward,” explains the Irish-national.
Technology has also become an invaluable enabler for Transguard’s Business Improvement Office (BIO), a specialised division that explores ways to improve efficiency across the entirety of the group’s business.
Conceived in 2012, the BIO focuses on processes that the managing director describes as, “cumbersome, administratively”, and devises ways to simplify and automate these aspects of the business, driving scalability and efficiency. Over the 2013 to 2014 fiscal year, BIO reportedly saved the group AED3mn ($816,598). It is expected to save AED6mn ($1.6mn) by the close of the current financial year.
One of its most recent successes lies within the development of a workforce management system following the standardisation of procedures of the group’s HR administration.
Consisting of a central database containing employee data, the management system automates what was previously lengthy admin-based processes, such as visa applications and medical. The system has already proven effective in cutting down the time needed to bring fresh recruits into the organisation.
As part of their drive towards efficiency, the BIO also introduced Lean Six Sigma training to the group’s management. Over the course of two years, the ongoing project aims to qualify each staff member at the head office up to yellow belt. A select 20% will be qualified up to green belt.
“That will be our change management tool that we will utilise to drive change and these efficiencies as we grow,” asserts Nolan.
The BIO also introduced the Business Improvement Awards initiative, an internal mechanism that encourages employees of all levels to contribute towards optimising business performance. In 2014, the incentive program earned its stripes after it successfully implemented a proposal from one of its employees to utilise biofuel in the group’s transport fleet of 150 buses.
Put forth by Rebecca Perkins, at the time a management intern in Transguard’s Property and Logistics team, she suggested the idea of switching from diesel fuel to biodiesel, as a means of scaling back costs and reducing the group’s environmental impact.
In the first year alone, the biofuel project saved the company over AED250,000 ($68,050), and successfully reduced carbon emissions by over 1,000 tonnes.
Commenting on the impact of the biofuel project, Nolan explains that in addition to reducing emissions of greenhouse gases: “The lubricating properties of the biofuel will lengthen the lifecycle of the engines and with zero sulphur, it will also extend the life-cycle of the catalytic converters.”
He adds that the project presents a, “compelling business case, financially,” and one that Transguard is now considering for their cash and transit business, which utilises a whole different fleet of vehicles. The managing director remains tight-lipped however on when that project might be undertaken.
While the development of the group’s technology platform and business improvement initiatives have scaled back costs and enhanced efficiencies, Nolan attributes a large part of the company’s success to capitalising early on a shifting viewpoint amongst property owners.
Calling for quality asset management, landlords and tenants alike are beginning to recognise the value of a properly maintained asset and the role of FM providers in its facilitation. It as a trend that will likely carry on well beyond 2015, and in order to stay ahead, FM brands will need to work towards establishing long-term partnerships with building developers.
The current practice across the region’s market is to ink short-term contracts that last on average between two to three years. It is also typical for FM service providers to be brought on-board after the completion of an asset’s construction. The more mature practice, which is now standard in Western markets, is to form long-term partnerships that can last five to 10 years. To accomplish this however, FM providers need to get involved right from the build-phase.
“Real-estate owners are realising that if they actually get the FM company’s in early, their actual return on investment for that asset is going to be greater, because FM companies are going to help them design that building in an economical manner to manage those assets,” comments Nolan.
Additionally, the approach provides ample opportunity for the service partner to invest in the early stages of the project, giving a return on investment to both the customer and the service provider over the long-term of the contract.
The financial case is further bolstered by the argument that in addition to maximising the lifespan of a given asset, both commercial and residential tenants have a tendency to pay higher for buildings that are simply maintained better. While upfront costs will be higher at project inception, the long-term costs are likely to be significantly cheaper.
“I think that is where the FM providers come in as a key part of the planning process. The more sophisticated property management companies are advising their clients at the early stage to bring in the FM providers,” explains Nolan.
“That is where the market is going.”
Tranguard’s client list
Tranguard provides FM services to a number of high-profile clientele and sites including:
- The Emirates Group
- Emaar Properties
- The Select Group
- Al Hail Holdings
- Dubai Metro
- Dubai Mall
- Dubai Festival City Mall