Industry attractiveness of outsourced facilities management services in Sri Lanka

Abstract

Buildings should be habitable, safe, durable, energy efficient and adaptive to use though it is expensive to manage. The specialized team of Facilities Management (FM) is thus invited to create a comfort built environment that strongly supports the core business of the organization. The emergent trend of outsourcing FM services has become widespread topic in the field of built environment though it is relatively new to the Sri Lankan context. Hence, this study aims to examine the attractiveness of the market for ‘FM services’ in Sri Lanka as a primary step. Porters five forces analysis was developedat the line-of-business industry level to analyse the existing market. A comprehensive literature review was carried out on a broader perspective with the purpose of getting familiarise with the research phenomena. In order to examine the attractiveness of the outsourced FM market two FM professionals; one from an International FM company and the other from a Local FM company, employed at the strategic level were interviewed. The research findings revealed that the market for FM services in Sri Lanka is long been considered as a niche market with a slower growth and is still in its infancy. Two companies, a local and a global company are dominating in the industry. The Porter’s five forces indicated that average bargaining power of client; less bargain power of suppliers; less substitutes; lower level competition thus there are few barriers to enter the market. However, it is clear that the boundaries of the market have not been defined yet; hence the new entrants have the freedom to define their own market share. This study urges to define the market for outsourced FM services and further, FM companies can get the benefit of this analysis in order to formulate successful business strategies to enter and sustain in the market.