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Wed 18 Nov 2009 04:00 AM

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Modus operandi

Facilities Management Middle East talks to Nigel Hambly about setting up shop in the GCC's FM industry.

Modus operandi
Nigel Hambly, managing director, Modus ME.
Modus operandi
I think that if I was realistic I would predict a very mature FM industry, in the UAE especially, probably within the next 5-7 years.

Facilities Management Middle East talks to Nigel Hambly about setting up shop in the GCC's FM industry.

Nigel Hambly first came to the Gulf in 1976, a time when the connection between Abu Dhabi and Dubai was in large part a sand track. Since then things have changed. Stints with a selection of big name corporations, then a brief try at retirement, have led to being involved with Modus, which officially started operations in June 2009.

In this short time, the embryonic FM company has already tendered  AED 135 million worth of work over 12 major projects and Hambly already has his sights set firmly on making a few important changes.

What do you do?

My role is to steward the growth of the business into profitable areas. At the same time taking the Modus brand into new areas and business sectors, while making money and enhancing the brand.

I have it ensure our brand represents that of a credible professional organisation, regardless of what we  undertake; that approach has some upsides and some downsides. For instance we will not do certain types of work, we will also veer away from risk, but embrace work where we think it is credible to do. I think the successful organisations have always been protective of their brand and what it represents. My background is with Shell a company that is passionate about brand values;  I carry that ethos with me today. By  improving the FM delivery, we can add to the professional credibility of the FM industry in the GCC states, and if we can be a small part of that FM development I'll be very pleased.

What is Modus?

Historically, Modus was originally a design and fit out company at the high end of the market, for banks, hedge funds and that kind of thing. As a natural genesis customers came back to us and said ‘you've designed a high-tech environment, can please you maintain it'. So it started as maintenance and then progressed. It was not a designed organisation, but grew from customer demand, very similar to the emergence of FM companies here.

Modus has now become one of Europe's leading design and fitout organisations , not on in the commercial sector but for data centres and high-tech labs. There's a very limited number of players in this high tech sector..

In the UK it's a mixture of full FM, some of it is around technology, combined with a substantial FM mobile fleet. We go from the white collar through to the blue collar. We established Modus here at the worst part of the recession; my experience says if you can make a company survive in the middle of a recession you should have a reasonably good platform to expand when the recovery begins.

Can you explain the scope of Modus' work?

Our scope is management and first tier supervisory control. We're not interested in becoming a blue collar organisation here. What we bring is very comprehensive management techniques. We want to work with qualified partner organisations that have a very similar business ethic to us, in terms of being a credible organisation and what they want to achieve. The other aspect we bring is a wealth of international FM experience, which we can translate into advice for client, property owner, or end user.

We can advise clients on appropriate methods, systems and processes and act as a first tier of expertise. I veer away from calling it consultancy, it's a much broader spectrum than just specifying something, it's the whole experience of designing, specifying, procuring and managing thereafter.

With regard to our presence in the market place, I think the brand has become visible quite quickly. We've had a credible and quite comprehensive response from most of the clients we've dealt with. We've not been successful with everything because it is a very competitive market out there and, on a couple of occasions, we've been used as a bench mark, or free consultancy.

You believe there needs to be a radical change in the way FM contractors are engaged, can you explain your views?

There are a number of things. Firstly, there is no standard form for FM contracts. All I've seen are plagiarised construction formats, with bits out of UK contracts. Therefore, there is no standardised framework to operate an FM contract under.

Secondly, I do not like the  inclusion  of performance bonds in many forms of tender. I find this contrary to the precepts  of the customer facing service approach the FM industry offers. They fly in the face of partnering and service orientation in as much as clients want a performance bond from you, but you don't get any chance to get a reciprocal one from them. Effectively it allows them to push payment out to 120 days, plus 10% on top, leaving FMs acting as a charity for six months. In my  opinion, this represents a level of commercial immorality.

They are expecting you to provide the best performance service possible and they, in return, are not reciprocating in their support of you doing that. Essentially,tThey are squeezing you for money and using you as a bank. What do you see as a viable alternative?

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.

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

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.

How can you effect change in the FM industry?

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.

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

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.

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maher 10 years ago

I fully agree with Nigel Hambly on the need to bring in fresh upscale added value to the relatively fledgling FM industry rather than circle around the prevalent retrograde blue collar practices . The need to make certain clients understand the essence and spirit of the FM service is of paramount importnace if this industry is to be elevated to the respectable status it deserves .I am certain that other players are trying hard to indoctrinate the market with similar values and practices which obviously apply on both sides of the equation . Hats off for starting up Modus in the middle of the recession.