FacilitiesManagement–FriendorFoe?‐AnexploringstudyoftheleadingFMcompaniesinSwedenandtheirpositionintheCrawfordworld.PontusAxelsson&TommasDavoustIndustrialEngineeringandManagementDivisionofProductionManagementLundInstituteofTechnologyLund’sUniversity

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Acknowledgments ..............................................................................................5Abstract..............................................................................................................71Introduction.....................................................................................................9

1.1ThesisBackground ......................................................................................................91.1.1Thecompany ......................................................................................................................91.1.2FacilitiesManagementcompanies .....................................................................................91.1.3Thechallenge....................................................................................................................10

1.2Purpose .....................................................................................................................131.2.1Mainpurpose ...................................................................................................................131.2.2Deliverable........................................................................................................................131.2.3Researchquestions...........................................................................................................13

1.3Delimitations.............................................................................................................141.4TargetAudience........................................................................................................141.5ReadingGuide...........................................................................................................15

2Methodology .................................................................................................172.1ResearchDesign........................................................................................................172.2EmpiricalGathering ..................................................................................................182.3WorkingProcess .......................................................................................................20

2.3.1Researchandinterviewingprocess ..................................................................................202.3.2Theorystudiesandtutors.................................................................................................202.3.3Analysis.............................................................................................................................20

2.4MethodAnalysis .......................................................................................................202.4.1Methodprosandcons......................................................................................................202.4.2Criticismofsources ..........................................................................................................21

2.5ReliabilityandValidity...............................................................................................223TheoryandModels ........................................................................................23

3.1BusinessModelCanvas.............................................................................................233.1.10HowtousetheBusinessModelCanvas .........................................................................26

3.2DecisionQualityChain ..............................................................................................283.3Coreandnon‐corebusiness......................................................................................31

4CrawfordintheBusinessContext ..................................................................334.1Crawford’sHistory ....................................................................................................334.2Crawford’sTraditionalBusinessModel ....................................................................344.3Crawford’sBusinessContextOverview ....................................................................38

4.3.1Thecontracts ....................................................................................................................404.3.2Anewwayofworking ......................................................................................................414.3.3FMinthebusinesscontext...............................................................................................42

5FMintheBusinessContext ............................................................................455.1In‐houseorOutsourcedFM......................................................................................465.2FMHistory.................................................................................................................475.3FMBusinessContextOverview.................................................................................475.4FMintheNordics......................................................................................................485.5FMcompanies’GeneralBusinessModel ..................................................................505.6TrendswithintheFMmarket ...................................................................................54

5.6.1LinkingFMtoclientstrategy ............................................................................................545.6.2Changemanagementandflexibility .................................................................................555.6.3Sustainability ....................................................................................................................56

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5.6.4Technologydevelopment .................................................................................................565.6.5Globalisation.....................................................................................................................575.6.6FMcompaniesexpandstheoffer .....................................................................................575.6.7Morein‐houseactivities ...................................................................................................585.6.8Fromsuppliertopartner ..................................................................................................585.6.9Emergencypreparedness .................................................................................................595.6.10Innovation ......................................................................................................................59

6Crawford’spositionintheFMbusiness..........................................................616.1AlternativePositions .................................................................................................616.2ContinueasServiceProvider ....................................................................................63

7CrawfordasPreferredServiceProvider..........................................................657.1Crawford’sFMBusinessModel ................................................................................66

7.1.1UnderstandingtheclientsofFMcompanies....................................................................677.1.2BuildstrongrelationshipswithFMcompanies ................................................................697.1.3Reportingandmeasuringmethod....................................................................................707.1.4Responsetimesandserviceprocess ................................................................................727.1.5Globalorganisation ..........................................................................................................737.1.6Genericandstandardisedprocesses ................................................................................747.1.7Innovationprocessandbeingproactive ..........................................................................757.1.8Broadenserviceactivities.................................................................................................767.1.9Sustainabilitystandards....................................................................................................777.1.10PartnershipwithFMcompanies.....................................................................................78

7.2TwoBusinessModelsinSynergy ..............................................................................798FutureFMactionsConcerningCrawford ........................................................83

8.1FMcompaniesswitchserviceprovider.....................................................................838.2FMcompaniestakemoreactivitiesin‐house ...........................................................848.3FMcompaniescutprices ..........................................................................................868.4FMcompaniesenterCrawford’sstrongcustomers..................................................878.5FMcompanylosesbusinesswithclient ....................................................................88

9MinimisingRisksofFutureFMactions ...........................................................919.1ImpactandLikelihoodofFMactions ........................................................................91

9.1.1Timehorizon.....................................................................................................................929.1.2Assumptions .....................................................................................................................92

9.2Crawford’sResponsetoFutureFMactions ..............................................................939.2.1FMcompaniesswitchserviceprovider ............................................................................939.2.2FMcompaniestakemoreactivitiesin‐house...................................................................959.2.3FMcompaniescutprices..................................................................................................969.2.4FMcompaniesenterCrawford’sstrongcustomers .........................................................97

10ConcludingDiscussion................................................................................10110.1QualityreviewbasedontheDQC.........................................................................10110.2ReconnectiontotheMainPurpose ......................................................................10310.3Contribution..........................................................................................................10510.4Criticism ................................................................................................................107AppendixA:References................................................................................................109AppendixB:ThebigFMplayersinSweden ..................................................................115AppendixC:Basicinterviewguide................................................................................119AppendixD:Terminology .............................................................................................121AppendixE:Identifiedareasforfurtherresearch ........................................................123

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AcknowledgmentsTheprocessofwritingthismasterthesishasbeenasinterestingaswecouldhave

everimagined.Ithasbeenachallengingandveryinspiringtaskanditiswithbothreliefandsadnesswenowdeclarethisthesisfinished.

First of all we would like to thank the person who provided us with this

stimulating thesis, Mr. TimWebster, for valuable discussions, for inspiring andencouraging us and for opening all the doors we needed to keep the projectrunning.

We would like to thank our tutor from LTH, Mr. Carl‐Johan Asplund, forsupporting us throughout the thesis and for always finding new angles andperspectivesonproblems.

Special thanks to our adviser, Mr. Magnus Levin, for guiding us in the rightdirection and for valuable input to our analysis and within our strategyrecommendations.

Thisthesiswouldneverbewhatitistodayifitwasnotforallthepeoplewehaveinterviewed.Weareamazedovertheenthusiasmwehaveencounteredandthewillingnesstoparticipateindiscussionswithus.Toallofyou,fromthepeopleat

CrawfordtoeveryoneworkingintheFMbusiness,thankyou!

Malmö,January2010

PontusAxelsson&TommasDavoust

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Abstract

Title: FacilitiesManagement‐FriendorFoe?

‐ An exploring study of the leading FMcompanies inSwedenandtheirpositionintheCrawfordworld.

Authors: PontusAxelssonandTommasDavoust

Tutors: Carl‐JohanAsplund–AssistantProfessorLTH

TimWebster‐Crawford,VPMarketing&Sales

MagnusLevin‐Centigo,ManagementConsultant

Purpose: This master thesis aims to understand how thedevelopmentof the leadingFMcompanieswill influence

upontheservicestrategyinCrawfordSweden.

Design/approach: LiteraturereviewofpublishedworkconcerningFMalongwith interviews with a range of people within Crawford

andintheFMbusiness.

Researchlimitations: Owing to constraint of time, the authors have had tomakesomedelimitation;e.g.thethesisonlyconcentrates

ontheSwedishmarket.ReadmoreunderDelimitations.

Practicalimplications: ThethesishelpsCrawfordandotherserviceproviderstounderstand the role, desires and development of

FMcompanies.Itcouldbeusedasgroundandfoundationtothestrategicdecisions‐makingprocesswithFMfirms.

Originality/Value: The thesis has contributed to the research area of FM,

more specifically to the relations between anFMcompanyandaserviceprovider.

Conclusions: The general conclusion is that,with the right conditions

and prerequisites, Crawford could look forward to asuccessfulfuturetogetherwithFMcompanies.

Keywords: Facilities Management, Facility Management, ServiceProvider,BusinessModel.

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1Introduction

Thischapterwillsetthesceneforthismasterthesis.FirstabriefdescriptionofCrawfordandFacilitiesManagementispresentedwithadeclarationofthemostcentraldefinitionsused.Itcontinueswiththebackgroundleadinguptothemainissue of the study, followed by themain purpose and the specific issues of theproject. Finally, the authors state the limitations, target audience and readinginstructionsofthethesis.

1.1ThesisBackground

1.1.1ThecompanyCardoGroupisalistedcompanyontheSwedishstockmarketwithheadquarterin

Malmö. Crawford is the corporatebrandofDoor& Logistics Solutions,which isoneoffourdivisionsthatoperatewithintheCardogroup.Crawfordisoneoftheworld’s largest manufacturers of industrial doors, Europe’s leading supplier of

dockloadingequipmentandthemarketleaderwhenitcomestogivingservicetothese products. The company has approximately 3000 employees and operatesprimarilyinEurope,ChinaandtheMiddleEast.

Crawford,aswellasCardo,statesthatthefutureliesinprovidingaddedvaluetostrategically selected customers through solutionswith quality products, a highservice content and great applications know‐how. Service is increasingly

important in the company and it is seen as the important link that binds andstrengthenstherelationshipwithcustomers.(CardoIntranet,2009;CardoAnnualReport,2008a)

1.1.2FacilitiesManagementcompaniesFacilities Management Companies (hereafter FMcompanies) are corporateorganisationsthatprimarilyaredevotedtomaintainandtakecareofeverything

thatisnotcoreactivitiesinothercompanies.FMcanbesummarisedascreatingan environment to support the primary operations while taking an integratedviewonserviceinfrastructureandusingthistodelivercustomersatisfaction.Still

many people associates FMwith cleaning, caretaking, repairs andmaintenancebut today it is somuchmorethanthat.TheFMcompaniesoftenoffer topclasssupport activities within IT, energy reduction, security, office planning,

transportationandmuchmore. Inorder tobe really successful,anFMcompany

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needstoconsiderbothhardissues,suchasengineering,andsoft issues,suchas

managingpeople.TodayyouoftenhearFMcompaniestalkabouttheimportanceof understanding their clients’ core activities and processes to be able to offersolutions to make them more efficient. They are experts in organising and

coordinating activities aswell as finding the right subcontractors, called serviceproviders. The FMcompanies bring value to their customers by reducing costsand/orbydeliveringahigherservicelevelforthesameamountofmoney.(Atkin

andBrooks,2009a)

In 2006, CEN1 agreed on the following definition of Facilities Management:“Integration of processes within an organisation to maintain and develop theagreed services which support and improve the effectiveness of its primaryactivities.”(CEN,2009)The definition is valid in Europe but there is no single worldwide‐accepteddefinitionofFMandtheconceptdiffersthroughoutcountriesandorganisations.

The world’s largest and most widely recognised international association forprofessional facilities managers, IFMA2, defines FM as follows: “Facilitymanagement is a profession that encompasses multiple disciplines to ensure

functionality of the built environment by integrating people, place, process andtechnology”(IFMA‐Swedenwebsite).

To separate the old intrinsic meaning of Facilities Management from the new

deeper and much broader definition, many FMcompanies began using otherconcepts for their corporate activities, like Total Facilities Management orIntegrated Facilities Management (I‐FM). Henceforth it is these companies we

refertowhenwewriteFMcompanies.

1.1.3ThechallengeSince 2005 there has been an ongoing change in the whole Cardo Group, a

journey that aims to create "the new Cardo". The main part of this changeconsistsofmovingfromatraditionalproductorientedviewtoaviewthatismuchmoresolutionandservicefocused.Crawfordillustratesthejourneywithamodel

showninfigure1andfigure2.

1EuropeanCommitteeforStandardization2InternationalFacilityManagementAssociation

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Figure1.TheCrawfordjourney.

Crawfordisillustratedwithastarinthefigure,andthecompetitorsareillustratedwithcircles,mostofthemsituatedintheleftbottomquadrant.Emphasisofthecompanies in this quadrant lies on the product itself; you sell your products by

discussing product features and most relations with costumers are strictlybusinessorientated.

"We are developing from a product company into a servicecompany. This is an enormously exciting process, where workingtogether with the people in the division is the crucial factor forsuccess.”

PeterAru,CardoCEOandformerheadofCrawford

Crawfordstrives tobecomeamoresolutionandservice focusedcompany; theywant to build long lasting relationships and understand the needs of thecustomersinordertosolvetheirproblems.Asdescribedinfigure1Crawfordhas

identified a big opportunity when moving to the upper right quadrant as itseemingly means leaving all competitors behind. However, Crawford has alsorealised that theywill not be alone in the sector and that a new type of actor

couldawaitthemwhenenteringtheservicebusiness.

ThisiswheretheFMcompaniescomeintothepicture.Crawfordisanexpertinserving industrial doors and therefore their service business is specialised on a

relatively small part of their clients’ non‐core activities. The business idea ofFMcompanies,ontheotherhand, isgenerally to takecareofeverythingthat is

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notcoreactivitiesoftheirclients.Sincethispotentiallycould includetheservice

ofdoors,CrawfordhasidentifiedFMcompaniesassomeonewhowilloperateonthe samemarket (see figure2), eitherasa competitororasapartner. Inotherwords,Crawford iswell aware that FMcompaniesand their actionswill playan

importantroleinthefutureofthecompany,butthereisnoclearpictureofhowtheseFMfirmswillinfluencethebusinessinthelongterm.

Figure2.AnewtypeofplayerawaitingCrawfordintheservicesector.

Therefore Crawford wanted us to provide strategy recommendations regardinghow to face this upcoming industry with Facilities Management companies.

ShouldFMcompaniesbeseenasacompetitororcouldCrawfordlookforwardtoa bright future together with FM companies? (Crawford internal document,2009a)

FacilitiesManagement‐FriendorFoe?

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1.2Purpose

The purpose of this master thesis could be generalised to contribute to theacademy and give benefit to firms within the industrial service sector, and in

particular to companies working as service providers to Facilities Managementfirms.Theresearchquestions,ontheotherhand,arecustomisedtothestudyofCrawford.Thesearelistedinthesameorderasthestructureofthethesis.

1.2.1MainpurposeTo determine how the development of Facilities Management companies willinfluenceupontheservicestrategywithinCrawfordSweden.

1.2.2DeliverableThe aimof the project is to analyse the alignment between the current servicestrategyinCrawfordandthefuturedevelopmentofFMcompanies,andbasedon

this analysis give recommendations concerning future strategic directions forCrawfordwithinthisarea.

1.2.3Researchquestions1.UnderstandthebusinesscontextwhereCrawfordandFMcompaniesoperate.

‐WhatisCrawford’scurrentbusinessmodel?‐HowdoesCrawfordworkwiththeirregularcustomers?

‐HowdoesCrawfordworkwithFMcompaniesandtheFMclients?‐MapouttheFMindustry.‐IdentifythevaluecreatingprocesswithinFMcompanies.

2.WhatpositionshouldCrawfordtakeintheidentifiedbusinesscontext?

‐WhatpositionsarepossiblealternativesforCrawford?‐WhatisthemoststrategicandprofitablepositionforCrawford?

3.WhatstrategyshouldCrawfordhavetowardsFMcompanies?

‐HowdoesaperfectserviceproviderworkaccordingtoFMcompanies?‐HowwellisCrawfordadaptedtoworkwithFMcompanies?

‐HowcouldCrawfordadapt/changetobethepreferredserviceprovider?‐CanCrawford’scurrentbusinessmodelworkinsynergywithanewFMbusinessmodel?

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4.ExaminepossiblefuturescenariosconcerningFMcompaniesthatwillaffect

andcouldbeathreattoCrawford.

‐WhatarethepossiblefutureactionsofFMcompanies?‐Evaluatetheidentifiedscenarios.

5.Strategyrecommendationsbasedonidentifiedfuturescenarios.

‐WhicharethepossiblestrategydirectionsforCrawford?‐Identifytheareasforfurtherresearch.

1.3Delimitations

Asmentionedabovethisstudyiscarriedoutonastrategiclevelandwillnotgive

much attention to how an actual implementation could proceed. The moredistantintimethestrategiesare,themorecomprehensivetheyget.

Therearealotoffactorstotakeintoconsiderationwhenstrategiesaremade.Itis

notpossible tomake in‐depthstudiesofall relevant factorswithin thescopeofthisthesisandthereforelimitationshadtobemade.ThethesisfocusesmainlyonCrawford’s aftermarket and service strategy towards FMcompanies but do not

totally ignore relevant factors like other customers, end users and the productorganisationwithinCrawford.

Thefollowinglimitationshavebeenmade:

•The thesis will concentrate on the Swedish market and our final

recommendationswill concern theservice strategyofCrawfordonly inSweden.However,we live in a globalisedworld so comparisonswill bemadewithotherEuropeancountrieswithawell‐developedFMindustry.

•ThethesiswillnotincludethethreatsofapotentialrepositioningofCrawford's

currentmanufacturingcompetitors.

•The thesis will focus on FMcompanies that have a potential influence on

Crawford's future, in other words, FMcompanies that offer Crawford’s type of

servicesorarelikelytodosointhefuture.

1.4TargetAudience

The thesis is written to be of interest for both academics and professionalsworking within FM related areas. Theories and models used to support thefindingstogetherwiththeauthorsreasoningandconclusionscouldofcoursebe

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interestingevenforpeoplewithgeneralinterestinbusinessstrategyandcomplex

partner/competitorrelations.

ThestrategyrecommendationsarewrittenforthemanagementteaminCrawfordbutthestudyaimsjustasmuchtocontributetotheacademy.Wealsohopethat

thegreaterpartofemployeeswithinCrawfordfindthisthesisworthreading.

1.5ReadingGuide

Togetanoverviewof thecontentand thestructureof themaster thesis,go tosection 10.2 – Reconnection to the Main Purpose. The thesis is written in achronologicalorderandacommonthemeconnectsallthechapters,whichiswhy

wegenerallyrecommendthereadertostartfromthebeginningandworkhis/herway to the end. For people who are non academics and/or not interested intheories,chapter2–Methodologyandchapter3–TheoryandModelscouldbe

readlucidly.

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2Methodology

This chapter describes the research design and the working process andmotivatestheresearchmethodologyused.Italsoexplainstheprocessofthedatagatheringandthetheorystudies.Finally theauthorshaveabriefdiscussionoftheprosandconswiththemethodchosenandasectionwithcriticismofsource.

”…methodology,asIseeit,isaproductofcommonsenseappliedtocircumstances.”

SamuelEMorison,Americanhistorianandscholar

Aswe started thismaster thesis projectwe had very limited knowledge of the

industrial service industry and we had practically never heard of FacilityManagement in its true meaning, but with a well‐founded business educationfromLundInstituteofTechnologywefoundthechallengevery interesting.With

thisbaselineof theprojectwehada lotof readingand initial research todo inordertogetholdofthesubject.

2.1ResearchDesign

Duetothecomplexityoftheprojectwedecidedonanearlystagetoexecutethemaster thesis based on an abductive approach with a qualitative research

strategy. As themanagement of Crawford requested recommendations for thefuture strategy there was no absolute truth to be found, but instead a lot ofinterpretations and analysis to bemade. This kind ofwork iswell suited for an

abductiveapproachdescribedbyBrymanandBell(2003)as“anapproachwherehypotheses are formulated from data and from these conclusions are drawn”.

Thisapproachandthequalitativeresearchstrategybasedonin‐depthinterviewswith experts, studies of specialist literature and theory generating rather thantheorytestinggoeshandinhand. Intheendtheresearchphase leadsuptothe

pointwheretheresearchersmaketheirownconclusionsfromthegathereddata(Bryman,2001).

Figure 3 below shows our research design. This is an illustration of how we

structured ourwork from issue to deliverable. The boxes are not necessarily instrict chronological order but shows howwe started from a Crawford point ofview and how the research was focused on Crawford and FMcompanies. This

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phase then led up to the Theory and Analysis part, where the customers and

FMclients again were taken into consideration through secondary data.UltimatelytheAnalysisgeneratedthefinalStrategyRecommendations.

Figure3.Researchdesignmap.

Our work was early concentrated around the business model concept. A keyfactorforabusinesscooperationtobecomesuccessfulistheirbasicideasofhow

value andmoney fit together. The businessmodel concept takes all parts of acompanyinconsiderationandisthereforeaverywidetypeofanalysis.

Based on our research, one of our aims was to come up with different future

scenarios that could affect Crawford in any way.We decided to analyse thesescenarios in a likelihood/impact model in order to come up with strategicrecommendationsintheformofcreative,doablealternatives.

2.2EmpiricalGathering

Thedatacollectedisdividedintotwodifferentcategories,primaryandsecondary

data. Secondary data is consolidated by someone else for a different purpose,whileprimarydata is gathered for thisparticular study.The two types couldbe

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equally important for theanalysiseven though theprimarydataoften suits the

purposebetter.(LekvallandWahlbin,2008212)

2.2.1PrimarydataThemain part of the primary data comes from semi‐structured interviewswith

experts in different fields of interest. Among the interviewed people are handpickedpeoplefromCrawford,wherewechosepersonswhoworkedwithandhadknowledge in the subject of FM.We also interviewed: a professor and a Ph.D.

candidatefromtheDepartmentofRealEstateManagementatMAHrepresentingtheacademy,representativesfromthesixlargestFMcompaniesinSweden,BertilOresten who is the CEO at a specialised FM consultant company and Helena

Ohlsson,aboardmembersoftwooftheworld’slargestnetworkassociationsforFM (IFMA3 and EuroFM). We also had two different meetings with FMexperienced consultants fromCentigoandErnst&Young todiscussour findings

and our outline for the strategy recommendations. All interviews are listed inAppendixA.

TobeupdatedwiththefrontieroftheFMbusinessweattendedaninternational

conference in Stockholm in December 2009 hosted by IFMA, or longerInternationalFacilityManagementAssociation.Attheconferencewe listenedtotalksandmingledwithpeopleinthebusiness.WealsotookpartintheEuropean

innovation conference called “Innovation inMind”, 2009 held in Lund, to hearsome of the worlds leading researchers and CEOs talk about the fundamentalneedforinnovationinasuccessfulbusiness.

2.2.2SecondarydataTheuseofexistingdata isofgreat importanceformostresearchandevenso inthis case (Lekvall andWahlbin, 2008). The secondary data used in this master

thesis consists of: research articles, consultant reports, industry journals,specialised literature, company websites and internal Crawford documents. Alldatareferredtointhisthesisisvaluedbytheauthorstobeofhighcredibility.The

twomain criteria used to select thedata havebeen ageof publication and theauthor’s number of publications concerning the area of FM. Tutors, supervisorsandcolleagueshavebeenconsultedtofurthervalidatethesources.

3InternationalFacilityManagementAssociation.

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2.3WorkingProcess

2.3.1ResearchandinterviewingprocessAftersearchingtheweb,librariesanddifferentdatabasesforrelevantinformationand literaturewecarriedouta fewpilot interviewswithCrawfordemployeesat

theheadquarterinMalmö.Basedonourimprovedunderstandingofthesubjectwe first tried an unstructured interview approachbut concluded after this pilotstudy that we needed a stricter framework for the future interviews. A basic

questionguideforsemi‐structuredinterviewswasdesignedandlateradjustedtothedifferentrespondents,seeAppendixC.

2.3.2TheorystudiesandtutorsDuring the research processwe simultaneously searched for relevant academictheoriestosupportandguideouranalysis.Throughoutthestudywehadfrequentmeetingswithourdifferenttutorsthatkeptusontrack, inspirednewideasand

helped us see the problems from new angles. Besides our tutors from LundInstituteofTechnologyandCrawfordwehad theprivilege tohavea thirdpartytutorfromconsultingfirmCentigotovalidateourworkandgiveushis thoughts

onourstrategyconclusions.

2.3.3AnalysisTheinterviewswerebothanalysedindividuallyandside‐by‐sidetofindinteresting

patternsintherespondents’answers.Wesearchedforpatternsmostlybylookingfor similarities in the answers connected to the specific research questions. Allinterviewswere recorded, listened through a second time and transcribed. This

process resulted in follow‐up discussions between the authors where possibleambiguitieswereclearedout.Allquotesandfactsfromtheinterviewsweresentback to the respondent to be verified. Furthermore, an open presentationwas

heldatLundInstituteofTechnologytovalidatethethesis.

2.4MethodAnalysis

2.4.1MethodprosandconsThequalitativemethodhasalotofadvantages.Itsuitsverywellwhenthereisnoprecisepredeterminedissuetoinvestigateandawidescopewithalotofanalysiswork, as was the case in this master thesis. It also suited particularly well to

investigatethebigFMcompaniesinSweden,sincetherearequitefewactorsonthe market. Interviewing people from six out of the eight biggest FM firms inSweden,aswedid,increasethecredibilityoftheresultsofthestudy.

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Onedisadvantagewiththemethodchosenisthat it isnotpossibletogeneralise

findings thataregathered fromvery fewrepresentativesofa targetgroup.ThiswasthereasonwhywedidnotconductinterviewsofCrawford’scustomersortheFMclientsaswecannotgeneralise from justa few in‐depth interviews,and the

limitations of our thesis hindered us frommakingmore interviews. Because oflimitedtimeandprioritisationweoptednot todoastatisticalvalidquantitativesurvey.We therefore decided to rely on Crawford’s previous customer studies

andmoregeneralquantitativereportsregardingcustomers.

The studyhadaverywide scope from the start thatwas tobenarroweddownduringtheproject.Ourtutorsencouragedustofindourownresearchnicheand

leave other areas addressed for further research (see Appendix E). With theobjectivetoprovidestrategyrecommendationswehadahardtimedecidingwhatareascouldbedelimited.Thefreedomofadoptingtheworkafterthefindingsisa

basicconditionforthiskindofstudy,butthere isalsoariskofunawarechoiceswhenobstaclesaremet.

There are always uncertainties regarding objectivity and validity in interview

baseddatagathering.Inthesemi‐structuredapproach,whichweused,thereisalotofresponsibilityontheinterviewertoasktherightquestionsandperceivein

whatareastherespondenthasmostknowledgetocontributewith.Ontheotherhand,thesemi‐structuredapproachisadvantageousifmanagedcorrectlyasveryspecificanddeepknowledgecouldbeobtained.(LekvallandWahlbin,2008)

2.4.2CriticismofsourcesWhen interviewingpeople at companies about sensitive subjects suchas futurestrategicactionsyoucannotexpecttotalobjectivity.Peoplearealwaysbiasedand

tendtooverratetheimportanceoftheirspecificbusinessarea.Anotherissueistodetermine whether the interviewees have evidence for their statements.Researchers must be critical and take personal agendas and ignorance into

accountwhenanalysingthegathereddata.

WheninterviewingpeoplefromotherorganisationsthanCrawfordthereisalwaystheriskthat,despitethefactthatwearestudentresearchers,therespondentsdo

notwanttodisclosecertaininformationtooutsiders.

AsFMmustbeconsideredayoungbusinessthereisnotmuchacademicresearchpublishedonthesubject.Mostoftheresearchdoneispresentedinshortarticles

in FM trade publications directed to business people. For example, when

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searching for publications in a database at Lund University, ELIN4, listing the

words“FacilitiesManagement”onlygivesyou2journalsand14booksasaresult.

Due to the constant change and development in the FM business, data quicklybecomesoutdated.Wehavetriedtonotusematerialolderthanthreeyearsbut

thelackofgoodresearchhassometimesnotgivenusanychoice.

2.5ReliabilityandValidity

Thesecriteriaplayanimportantroleforquantitativeresearchersbuthavelimitedvalue in qualitative research. The concepts’ meaning, by definition, concernsmeasurements and is therefore not interesting in qualitative research where

nothing is measured. However some qualitative researchers find the criteriavaluablefortheirresearch,butthedefinitionsmustthenbemodifiedtofittheirpurpose. We have used LeCompte & Goetz (1982) and Kirk & Miller (1986)

definitionsofreliabilityandvalidityforqualitativeresearch.(Bryman,2001)

2.5.1ReliabilityThismeans towhat extent the study is replicable for other researchers. This is

oftenveryhardwhenitcomestoqualitativeresearchbecausesocialandbusinessenvironments are in constant change. However, a good documentation of theresearchdesignandtheworkingprocessfacilitatesarepetitionofthestudy.The

reliability also concerns how aligned different researchers in a team interpretwhat theyhearand see. Inour casewithonly two researchers thiswaseasy tofullfil.(Bryman,2001)

2.5.2ValidityThevalidityshowshowwelltheobservationsconformtothetheoreticalmodels.Inour studyofCrawford’sbusinessmodel andamoregeneralisedFMbusiness

modelourworkisvalidbythefactthatthemodelswerecompletedtogetherwithrepresentatives from the different organisations. Work committed over longerperiods of time also tends to have higher validity. The concept also includes

generalisability, which could be somewhat limited in some parts as ourconclusions and recommendations get very Crawford‐specific, however,applicable to companies and organisations in a similar situation as Crawford.

(Bryman,2001)

4ElectronicLibraryInformationNavigator

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3TheoryandModels

Below,theacademictheoriesandmodelsthatareusedtosupporttheauthors’findings are explained. The three main theories are, in order as they arepresented in the chapter: Business Model Canvas, Decision Quality Chain andCore/non­Corebusiness.

3.1BusinessModelCanvas

The term “business model” sometimes has an unclear definition and use inbusiness circles. The concept is often stretched out to mean a little bit of

everything, and ends up meaning nothing (Magrette, 2002). Here follows thedefinitions we have used for the well‐known term in this master thesis and adescription of a way to illustrate business models called the “Business Model

Canvas”.Thiswayauthorsandreadersstartfromthesamepointandlookattheconceptfromthesameperspective.

TheBusinessModelisthemostfundamentaldescriptionofhowacompanyoran

organisation makes money. Different authors and researchers express this indifferentways.OneofthemostaccepteddefinitionsofthebusinessmodelistheonePeterDruckerwrote inhisbook“TheoryoftheBusiness”(1994).Hedivides

the concept into three parts; assumptions about the environment, the specificmissionand thecorecompetence in theorganisationneeded toaccomplish themission (Birkinshaw and Goddard, 2009). In the book “Exploring Corporate

Strategy” the definition reads “Abusiness model describes the structure ofproducts,serviceandinformationflowsandtherolesoftheparticipatingparties”(Johnson, Scholes and Whittington, 2009). Both definitions are good but quite

complex to understand due to the lack of figurative illustration. Therefore wehave chosen to use Alexander Osterwalder’s framework, called the BusinessModel Canvas, to structure the concept in ourmaster thesis.His definition and

frameworkdoesnotdiffermuchfromtheothers’butmakesiteasytounderstandandoverview.Dr.Osterwalder’sdefinitionreads:

”A businessmodel describes the rationale of how an organizationcreates,delivers,andcapturesvalue”

Dr.AlexanderOsterwalder,PhDBusinessAdministration

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Thebasic structure of theBusinessModel Canvas (see figure 4) is built on four

mainareas:Customers,ValueProportion,Infrastructure,andFinancialViability.Inshort,youcansaythattheInfrastructurebuildsuptheValueProportion,whichinturn is what is offered to the Customer side. The Financial Viability represents

howthestreamofmoneyiscominginandgoingoutofthecompany.Thesefourmain areas of business are in turn divided into nine basic building blocks thatshowthelogicofhowacompanyintendstoorchestrateitsbusinessandtomake

money.

Figure4.BasicstructurefortheBusinessModelCanvas.

3.1.1TargetcustomerTheCustomersare themost centralpartof abusiness.Without customers thatarewillingtopayforthecompany’sofferthereisnobusiness.Thebuildingblockcould contain many different customer segments and it is important for the

companyto identifywhichsegmentstheywanttoserve.Acustomersegment isseparated from another if they have considerably different needs, if they arereached through different channels, if they require different types of

relationships, if they have substantially different profitability and if they arewillingtopayfordifferentaspectsoftheoffer.

3.1.2CustomerrelationshipItisimportanttodeterminewhatkindofrelationshipthecompanywantstohavewith its customers. It could be totally computerised and automated or deeplypersonalised relations and of course any hybrid in between. The desired

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relationshipcouldalsodifferwithdifferentcustomersegmentsbutitistheneven

moreimportanttoclarifywhatapplieswhere.

3.1.3ChannelsThe block “Channels” is the way a company reaches, communicates, sells and

distributes to its customers. In other words, the channels are the company’sinterfacewith its customers.Many importantactivitiesarehandled through thechannels, for example; raising awareness of the company’s offer and brand,

helping customers to evaluate the offer, facilitating purchase of products andservices,deliveringtocustomersandprovidingaftermarketsupport.

3.1.4OfferA company could havemore than one specific offer but in the businessmodelcanvas themeaning ismoregeneral and is aimedatwhatproblemorneed thecompanyasawholetriestosolveorsatisfy.

"(avalueproposition) isanoverallviewof ..productsandservicesthat together represent value for a specific customer segment. Itdescribes the way a firm differentiates itself from its competitorsand is the reasonwhy customers buy froma certain firmand notfromanother."

Dr.AlexanderOsterwalder,PhDBusinessAdministration

3.1.5KeyactivitiesKey Activities are the most important things a company does to make the

businesssuccessful.Thoseactivitiesarecloselylinkedtothebusinessmodelasawholeanddescribehowthekeyresources,relations,channelsandfinancialsarehandledtomakethecompanysuccessfulandcompetitive.

3.1.6KeyresourcesIf KeyActivity iswhat a companydoes, theKeyResources arewhat a companyhas that makes it able to create the offer, reach the market, maintain

relationships and earn revenues. Key resources can be of different kindsdepending on the business the company is involved in. Physical‐, financial‐,intellectual‐,orhumanresourcescouldbecombinedinmanydifferentways.The

KeyResourcesarenotnecessarilyownedbythecompanybutcouldbeleasedoracquiredfromthePartnerNetwork.

3.1.7PartnernetworkThisblockdescribestheinteractionswithothercompaniestomakethebusinessmodelwork.Thepartnershipsarebecomingmoreandmoreimportantformany

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companies.Thereasontohavepartnerscouldbeoptimisation,riskreductionor

to acquire Key Resources. There are also many different levels of partnership;coopetition,strategicalliances, jointventuresorbuyer‐supplierrelationshipsarethemostcommon.

3.1.8CoststructureAfter defining Key Resources, Key Activities, and Partner Network the CostStructure is quite easily calculated. The Cost Structure in the Business Model

Canvas concerns the most important costs incurred while operating under aparticularbusinessmodel.

3.1.9RevenueflowsThisblockrepresentsthecashflowfromthecustomerstothecompany.Itcouldbegeneratedfromsinglepaymentsorfromongoingbusinesssuchasaftermarketservice agreements. Here it is important to identify things like what each

customersegmentiswillingtopayandwhatpricingmodelthatshouldbeused.

3.1.10HowtousetheBusinessModelCanvasWithaslightmodificationthetheoreticalmodelcouldbeturned intoapractical

modelusedtomapoutaspecificorganisation’sbusinessmodel(seefigure5).SotheBusinessModelCanvasisnotlinkedtoacertainbusinessmodelbutis,assaidabove,atooltoillustrateandclarifyalldifferentmodelsonecouldthinkof.

“There’s not a single business model… There are really a lot ofopportunitiesandalotofoptionsandwejusthavetodiscoverallofthem.”

TimO’Reilly,CEO,O’Reilly

Post‐itscouldbeusedtofillintheboxessoideasandreasoningcouldbeshared

and moved around until the current business model is identified or a new isfound.Osterwalderreallystressestheimportanceofbusinessmodel innovationinsuccessfulcorporateorganisations.

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Figure5.Dr.Osterwalder’sBusinessModelCanvas.

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3.2DecisionQualityChain

Becauseouraimwith thismaster thesis is todeliver strategy recommendationsthatcouldbeusedasafoundationforfuturedecision‐makingwewanttoassure

thequalityofourwork.TheDecisionQualityChainisatooldevelopedbyJimandDavid Matheson to raise the level of quality in decision‐making. Jim, aworld‐recognised authority on the application of decision analysis, is also a

founder of the international consulting firm SDG, Strategic Decision Group.(Fender,1998)

Figure6.Matheson&Matheson’sDecisionQualityChain.

The Decision Quality Chain (see figure 6) was designed for strategic decisions

regarding R&D investments, mostly because these are known to be of verycomplex nature, but the theory works for all strategic decisions. Strategicdecisionsareoftencharacterisedbydedicationofresources,uncertaintyandlong

feedback‐loops.Thesekindsofdecisionscall foraprofoundgroundwork,as it ishardtolearnfrommistakeshere, incontrasttooperationaldecisionswithshortfeedback‐loopswhereWalterShewhartfamousPDCA‐cycle5ismoreapplicable.

“Whencauseandeffectaredistantintimeorspace,andresultsareambiguous,thenlearningisnearlyimpossible.”

PeterSenge,directorofOrganizationalLearningMIT

5PDCA(plan‐do‐check‐act)isaniterativeproblem‐solvingprocessusedinbusinessprocessimprovement

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3.21AppropriateframeThe first link of the chain is the Appropriate frame which is described byMatheson and Matheson as a window through which we view a particular

problem.Thepurposeistogivetheproblemthecorrectbackground,settingandcontext to make a good decision. A problem can often be viewed throughdifferentframesbut it isuptothedecisionmakertodeterminewhichthemost

appropriateoneis. Iftherearemanydecisionmakersacommonvieweasesthedecisionprocess.

3.2.2Meaningful,reliableinformationSince strategicdecisions always concern the future, and you cannever findanyrealfactsaboutit,thedecisionmakerhastorelyonotherkindsofinformation.Acommonmistake is to only look at what we know today and let that bear the

decisioninsteadofaskingwhatinformationwouldbemeaningfultohaveforthisparticular decision. Information should be helpful and not contribute tounnecessary complexity. Source review is recommended to ensure that the

informationisobjectiveandreliable.

3.2.3Clearvaluesandtrade­offsThe three basic questions in this part are:What is the risk/return relationship?

What is the expected value of the decision? What is the cost of failure?Ifadecisionmakerhastheanswerstothesequestionsthequalityofthedecisioncouldbeimprovedalot.Thereareoftentrade‐offstobemadewhethermoneyis

preferrednoworlaterandifthecompanyiswillingtotakehigherriskswiththeopportunitytogetgreaterreturns.

3.2.4LogicallycorrectreasoningThis linkcombinesall theotherones in thechain.Thereasoningprocessshouldconsider background, information, risks and alternatives to reach a conclusionbased on evidence. The logic should be easy to follow and sort out possible

complexities.

“Mostbusinessdecisionsaretakenasaresultofanimalspirits­ofaspontaneous urge to action rather than inaction, and not as anoutcomeof aweightedaverage of quantitative benefitsmultipliedbyquantitativeprobabilities”

JohnMaynardKeynes,Economistandphilosopher

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3.2.5CreativedoablealternativesWithout alternatives there is no meaningful decision to be made. If only onepossibleactionispresentedthentheonlydecisionmanagementhastomakeisto

say“yes”or“no”.Ifalternativescenariosispresentedwithdifferentsolutionsthequalityof thedecision rises. It is important tobe creativeand“thinkoutsideofthebox”whenalternativesare formedbut it is equally important that theyare

doable.Alternativesthatarenotrealisticandfeasibledonotcontributewithanyvaluetothedecisionprocess.

3.2.6CommitmenttoactionThe last linkof the chain is just as important as theotherones above. Even anexcellent decision is useless if it is not implemented. The easiest way to besuccessful in this dimension is through quality in the others. If management

decides to go throughwith aproject it is vital for the success that the involvedpeople are committed to the actions. And theotherway around, if a project isrejecteditisimportantthattheorganisationacceptswhathasbeendecidedsono

turneddownprojectsstilllurkintheorganisation.

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3.3Coreandnon­corebusiness

Inordertounderstandthecorrectfocusforfacilitiesmanagement,itisimportantto explain the concept of and the relationship between core and non‐core

activities. The core activities of a business are often described as the functionsthatarecriticalandcloselyrelatedtoafirm’sstrategy.Non‐coreactivitiescouldbe described as service activities that are not necessarily required by a firm in

fulfilling the value proposition. Core activities should always be dealt within‐housewhilstnon‐coreactivitiescould, ifdesired,beoutsourcedotherparties.(BusinessDictionary,2009)

Figure7illustratestherelationbetweenthecoreandthenon‐corebusiness,anditisbasedonamodelfromthebookTotalFacilitiesManagementwrittenbyBrianAtkinandAdrianBrooks(2009).

Figure7.Basicrelationshipbetweencoreandnon‐corebusiness

Surelymanyorganisationshavealreadyconsideredthedistinctionbetweencoreand non‐core business as an instrument to meet their business objectives.

Reducing costs is a significant part for an organisation and besides the obviouscorebusinesstherearemanycostsavingopportunitiesboundtobefoundinthenon‐core business areas. There aremany activities and processes that need to

function together efficiently in an organisation and it is therefore important totakeanintegratedperspectiveonnon‐coreactivities.FacilitiesManagementdoes

justthis,andbyfindingsynergyeffectsandeconomiesofscaletheyreducecostsofthenon‐corebusiness.

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Amoneysource,orCapital,comesintothecorebusinessaswellasthenon‐core

businessandbothgenerateprofitandcostsavingsintheend.Thecorebusinessisbuiltupbyprimary/coreactivitiesandthebusinessstrategyisprimarilyaimedtosupportthecorebusiness.Derivingfromthecorebusiness,thenon‐coreactivities

areidentifiedandthedecisionwhetherornottooutsourcetheactivitiesistaken.ITinfrastructure and Organisation management are two activities that supportboth the core business and the non‐core business. Finally, outsourcing the

non‐core business often means handing it over, completely or partially, toFacilitiesManagementcompanies.(AtkinandBrooks,2009b)

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4CrawfordintheBusinessContext

This chapter aims to explain Crawford’s current business model and to placeFacilitiesManagementcompaniesinthebusinesscontextsurroundingCrawford.Describing the business model includes sorting out concepts like valueproposition, target customers, customer relations, key activities, key resourcesandchannels.Thechapterbeginswithashorthistoricalresume.

Asexplained in the introduction chapterCrawford is in themiddleof a journeytowardsanewbusinessmodelwheresolutionsandserviceare thecatchwords.

Tobeabletounderstandthefutureyoufirstneedtoknowsomethingaboutthepast.

4.1Crawford’sHistory

“I startedwork in1916andhavebeengoing toworkdaily for75years.Iamnow102yearsold.IshallattempttogiveyouthehistoryofhowCrawfordDoorfirstcameabout.”

FrederickC.CrawfordinaletterApril20,1993

CrawfordDoorCompanywasfoundedin1930byFrederickCCrawfordOhio,USA.A small operation, manufacturing residential garage doors, began in Detroit,Michigan and later industrial doors were added. In 1956 a young Swedish

engineer by the name Fred Bengtsson travelled the US to look for suitableAmericanproductstomarketinSwedenandtheverysameyearheobtainedtherighttoresellCrawford’sproductrangeinEurope.

In the 60‐ies Crawford Door European Co AB was formed and hardwareproductionstartedinSweden.SalessubsidiarywerestartedinFinland,Denmark,GreatBritainandintheNetherlands.

During the70‐iesand80‐iesCrawfordcontinued togrowwith sales subsidiariesopening in Germany, Belgium, Switzerland, France, Norway and in the UnitedArab Emirates. Crawford also grew through acquisitions of related companies

throughout Europe. Even production units were opened in other countriesbesidesSwedenandtheproductrangewereextendedwithdockingsystemsandelectronics‐basedautomaticdoors,whichbecameCrawford’scorebusiness.

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Crawford entered newmarkets in China and Eastern Europe in the 90‐ies. But

hardtimesawaitedthecompany.The firsthalfof thedecadeCrawfordwasstillthe market leader in industrial and garage doors in most Western Europeancountries, but financial crisis, a weakened Swedish currency, strengthened

competitionanddroppingdemandledtosignificantstructuralmeasuresandtheemployeeswasreducedbyonethird.Crawfordsurvivedthetoughyearsandthenumbersonceagainwaslookingbetter.(PerssonandFrithiof,2000)

In2005itwastimeforanewstructuralchangeandthejourneytowards“thenewCrawford”began.(Crawfordwebsite,2009)

4.2Crawford’sTraditionalBusinessModel

In2005whenPeterArutookoverasCEO,Crawfordwasstrictlyproductorientedand had been so from the very start. The company had developed through

technical innovations and acquisition and that way broadened the productportfolio. Aru realised that higher margins could be obtained by changing thebusinessmodeltowardsamoreserviceorientedstrategy.

“..expanding our collaboration with service­intensive customersmakesuslessexposedtothepricesqueezethancompaniesthatonlysupplysimpleproducts”

PeterAru,CardoCEOandformerheadofCrawford

Said and done, Crawford began the hard work to change the company. Major

changes like this one are notmade overnight. Old patterns andmindsetsweredeeplyrootedinthecompany.Oneexampleisthatthefirstbrochurewithoutanyofthecompany’sproductsonthecoverwasreleasedin2009,awholefouryears

afterthesolutionandserviceorientationwas initiated. Insteadofagaragedoorthe picture showed an open freezer with the text “would you leave this dooropen?”togiveattentiontotheenergysavingthatsmartmonitoringandcontrol

ofdoors couldprovide.Still,Crawfordhascomea longwayon the journeyandtodaytheservicesectorstandsforabouthalfofthetotalturnover.

Figure 8 shows Crawford’s business model mapped out in the Business Model

Canvasby theauthors.The figure illustrateswhat is thedesiredbusinessmodelfortheserviceorganisationwithinCrawford.ItiscommunicatedbythecompanythroughdocumentsliketheAnnualReportandStatementofDirection.Themodel

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is designed to work towards traditional customers6 within Crawford; working

towards FMcompanies on thebaseof this businessmodel is not thebestway.Crawford recognises this and often acts differently towards FMcompanies andtherefore the current business model is sometimes slipping away from the

foundations.Howandwhere FM fits into thepicture is part of theobjectiveofthis study and is therefore discussed separately later. The model has beendiscussedpartlyorinfulldetailwiththeinterviewedCrawfordemployees.

Figure8.Crawford’straditionalcustomerbusinessmodel.

The post‐its illustrate how the authors worked with different views and ideasbeforetheresultinthefigurewascompleted.Italsoshowsthatthecanvasisnotpaintedwith permanent colour and could verywell be seen in anotherway or

changedinthefuture.Belowfollowsamoredetaileddescriptionofthebuildingblocks in the Canvas and how they look in the desired Crawford serviceorganisation.

6CustomersthatCrawfordhasdirectcontactwith,i.e.noFMcompanyasmiddleman.

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4.2.1TargetcustomerWiththenewsolutionandserviceorientedbusinessmodelCrawfordfocusesonstrategically selected customers. Volume‐intensive customerswith a great need

for service, or customers that need complex solutions that create a significantaftermarketaretypicallywhatCrawfordislookingfor.Thegoalistobuildstrong,long‐termrelationsthatcreatevalueinbothendsthroughconstantlearningand

developedunderstandingforthecustomers’needs.(CardoAnnualReport,2008b)

4.2.2CustomerrelationsOnepartof this customer focus is thebuildingofakeyaccountorganisation to

enableabetterserviceandabetteroverviewofthelargereturningnationalandinternational customers. The IKAMs7work across national boarders focusing ongivinglargeinternationalcustomersthebestserviceconditionspossible.Alsoon

national level KAMs are responsible for the strategically selected relations andtheirdevelopment.

Oneexampleofanimportantrelationwithastrategicallyselectedcustomeristhe

transport and logistics company DHL. With logistics as the core business it isabsolutely vital to DHL that the docking systems and doors at the terminalsfunction correctly. With more than 70 offices, terminals and stations all over

Sweden, DHL is an important customer to Crawford. (DHL, 2009; Cardo AnnualReport,2008a;CrawfordProductCatalogue,2009)

4.2.3ChannelsFormanyyearsCrawfordenjoyedthepositionasmarketleaderintheirbusiness.The brand is often associated with quality and reliable products, whichcontributes to returning customers.When the company changed focus towards

serviceandsolutionsmanyoftheoldcustomerswerecontactedtobe informedofthenewoffers.Theserviceofferwasfacilitatedbythe installedproductbasealready out on the market. Also, on a day to day basis, the Direct Sales

department identifies and contacts potential customers that Crawford does nothaveahistorywith.(Webster,Crawford)

4.2.4OfferA central part of all companies is what they offer their customers. Crawford’svalueproposition ismultifacetedwhen it comes to industrialdoorsanddockingsystems. Different levels of service agreements called “Key customer service

agreements” and a wide range of products and spare parts are part of the7InternationalKeyAccountManagers

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company’s offer (Cardo Annual report 2008a). The service agreements are

availableinfourdifferentcategoriesbasedontheequipmentutilisation.Anotherimportant factor when companies choose Crawford is their internationalpresence. To work with the same supplier over boarders is often seen as

beneficial.Thepreferencesandneedsvarya lotfromcustomertocustomerbutCrawford’sobjectiveistofindsolutionsforallkindsofrequests(Crawfordinternaldocument, 2009b). Crawford likes to see themselves as solution providers; it is

not about the product anymore, it is about the function demanded by thecustomer. Crawford is confident with the competence in the company and isappreciatedfortheknow‐howandtrustworthiness.

Newtechnologicalinnovationsaresporadicallyabsorbedintheproductportfolio.Oneofthelatestaddedproductsisamonitoringandcontrolsystem,calledCMS,which gives the operator good overview as well as detailed information of the

loadingandunloadingprocess(Leichtnam,Crawford).

4.2.5KeyresourcesCrawford is a strong brand and has good recognition among people in the

business.Theinstalledproductbaseoutonthemarketandnewunitsalesalwayscarry theCrawfordlogo.This facilitates the recognitionofCrawfordasa servicecompanyaswell.However,todayitisasymbioticrelationshipastheservicealso

isakeyinmaintainingnewsales.(Crawfordinternaldocument,2009b)

The service organisation iswell structured andwell alignedwith the spare partsupplychain.Crawfordholdsawiderangeofsparepartsneededtoexecuteboth

preventive and corrective maintenance including repairs. Crawford’s IT systemalso contains a lot of data that could be used in detailed reports if requested.

(Webster,Crawford)

“Continuous learning and development is vital to remaincompetitive”

PeterAru,CEOCardoandformerheadofCrawford

InmostcompaniesHRisseenasakeyresourceandevensoinCrawford.Onanindividual level all employees are replaceable but seen as a groupwith a lot oftacit knowledge the people could definitely be a key resource. Crawford in

general is working a lot with learninganddevelopment and among others theservicetechniciansinCrawford,educatedinCrawford’sowntrainingcourses,areseenas a vital group for the company’s success. Theyare thepeopledoing the

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actual service work and they meet the customers on a daily basis. (Crawford

internaldocuments,2009c)

4.2.6KeyactivitiesAll the activities in the service process are very important and this is where

Crawford is ahead of the competition (van der Linden, Crawford). Reliable highqualityservicewithnation‐widequickresponsetimes,accesstosparepartsandskilledservicetechniciansaresomeofthefactorsthatmaketheserviceprocess,

asawhole,akeyactivity.

Crawford has also been innovative in their service organisation in recent times.Thesolutionthinkingwithfocusonfunctioninsteadofproductisoneexample.

4.2.7PartnernetworkThis block focuses on organisations and companies that Crawford has arelationshipwithon thecost side,where thevalueproposition is created.Most

valuablearethecompaniesthatprovidecomplimentarytechnologytoCrawford’sproducts. With an emerging focus on energy efficiency and environmentalquestions,theorganisationswithinthisareabecomemoreandmoreimportant.

4.3Crawford’sBusinessContextOverview

Crawford has already many established business deals with FMcompanies and

therelationsgrowstrongercontinuouslyasmoreandlargercontractsaresigned.InthecontractsCrawfordhastheserviceproviderroleandtheyareasmallpartof the total value proposition that FMcompanies offer their clients. However,

exactly how the FMcompanies fit into Crawford’s desired business model,presented above, is not totally clear. Figure 10 below shows an overview ofCrawford’s current business context to better illustrate the relations with

traditionalcustomers,FMcompaniesandFMclients.

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Figure10.Crawford’sbusinesscontext.

Crawford is located in themiddle of the figure andwith the different types ofcustomersaround.AboveCrawford, in the circles, are the traditional customers

that Crawford has direct contact with. Among them are also the strategicallyselected customers with substantial door service needs. With those customersCrawford often has strong, long‐term relations, illustrated by thicker arrows.

Below Crawford, in the squares, are the FMcompanies and their clients in thecirclesbelowthem.TherelationshipswiththedifferentFMcompaniesarealsoofshiftingcharacterandthereforelinkedtoCrawfordwithvaryingthicknessofthe

arrows. There are some major differences between the relationships withtraditional customers and with FMcompanies. With traditional customers, thebusinessrelation,thepaymentsandthecontractsarebetweenCrawfordandthe

company that actually needs the service. Belowwith the FMfirms the businessrelation, the payments and the contracts are between Crawford and theFMcompanybuttheservice isperformedatadifferentcompany,theFMclient,

that hired the FMcompany in the first place. Another difference is thatCrawford’spre‐packaged“keycustomerserviceagreements”areonlyofferedtothe traditional customers.When business ismadewith FMcompanies they set

the rules for the cooperation. There are also limitations of how much contactCrawford is allowed to have with FMclients. FMcompanies also have higherrequirementsontheservicedeliverythandotraditionalcustomers.Forexample,

FMfirms havemore restricted rules of the reporting process where they often

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demandmore,e.g.exactstartandfinishtime.Thedottedlinesinthefigureshow

that all higher‐level communication with the FMclients must go through theFMcompany. This structure complicates the incorporation of FMcompanies inthe current businessmodel where Crawford speaks of the importance of close

relationsandunderstandingofthecustomers.(ErikssonandLindholm,Crawford)

4.3.1ThecontractsToday, threeout of four FMfirms that Crawford isworkingwith in Sweden are

among the top ten customers in revenues. This makes them seen as veryimportant customers, although they together only stand for about 6,5% of thetotal service revenues. A few years ago the attitude toward FMcompanieswas

different.(vanderLinden,Crawford)

“honestly, if youwouldhaveasked (…)mea couple of yearsago Iwould have said competitors but nowadays, knowing thesecompaniesmuchbetter,forsuretheyarecustomers,customerswithhugepotentialandwecannotaffordtonotworkwiththem”

ChristopheWinling,GlobalKeyAccountManagerCrawford

Thevery first FMcontactwas initiatedbyanFMcompany.Crawford receiveda

tender for an assignment and decided, with some hesitation, to try towin thebusiness.TheFMcompanyfoundCrawfordthebestsuitedcandidateforthejobandthefirstcontractwassigned.EventhoughFMfirmsstillwasseenaspotential

competitors the management in Crawford realised the potential in theFMbusiness. Crawford had worked with similar intermediaries before whenselling their products to building sites. In those situations, contractors and

architectshave themiddlemanposition (Erikssonand Lindholm,Crawford). Thiswasnotapreferredwayofworkingbutifhandledrightsuchrelationshipscouldbeveryprofitable (Winling,Crawford).Whenthe first framecontract inSweden

waswrittenwith an FMfirm therewas a lot of uncertainty involved. The priceagreed onwas notwhat Crawfordwanted but the ideawas that hopefully the

volumescouldcompensateforthat.Theproblemwasthatnooneknewwhattheexact volumeswouldbe at this early stage. This first agreedprice level is oftenveryhardtorenegotiateandhasalsobeensointhiscase;thepriceshavemoreor

less just been adjusted to the market index and the circumstances have beenfurther complicated by Crawford’swish to out‐compete other service providerswithin thesamebusinessarea.Thecooperationwith theseFMfirmsworksvery

well and the processes are well incorporated, but these early contracts are aheadacheforCrawfordanditmightcometoapointwheretherelationshipmust

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be risked to improve the terms in the contracts. (Eriksson and Lindholm,

Crawford;ArgursandLauseger,Pricegain)

Later contracts written with other FMcompanies have been based on moreaccuratedataandprognosisandarethereforeonamoresuitablepricelevelfrom

Crawford’s point of view. “But the price is not the main issue for thesecompanies” says ChristopheWinling, Global Key AccountManager at Crawford,“thenwewouldn’tworkwithfacilitymanagers;whatismuchmoreimportantfor

them is the response time and the reporting process”. Other Key AccountManagersmadesimilarstatementsandJosvanderLinden,RegionalKeyAccountManager, also stressed the FMcompanies’ high professionalism in the

procurementprocessandhighawarenessofvalueformoney.

4.3.2AnewwayofworkingThe FMfirms have one thing in common; they are more demanding than the

average usual Crawford customer. In the end, FMcompanies have fullresponsibility for the delivered service to their clients, including the servicedeliveredbytheirserviceproviders.Notrarely,penalty finesare included inthe

contracts to ensure that the service reaches the agreed level (Argurs andLauseger,Pricegain).TheclientsoftenexpecttheFMcompanytohavefullcontroland detailed information about all planned and ongoing FM activities, and

sometimes about things that normally would be beyond the scope of FM. ErikWennerholm,businessdeveloperatSodexo,gaveanexamplewhereacustomerhadaskedhimhowmanyemployees the companyhadatdifferent sites. These

expectationsaboutwhatinformationafacilitymanagercanandshouldbeabletoprovidefortheclientreflectthedemandingrelationshipFMfirmshavewiththeir

serviceproviders.

Patrick Lindholm, IKAM Crawford, gave the same view when he said that “theFMcompaniesarehardertoworkwithonalllevels,evenourservicetechnicians

find it more demanding”. All activities must be done and reported in anestablishedandstandardisedprocess.

“Sometimes it is frustrating to arrive at a sitewitha brokendoorwherecustomerscannotgetinoroutandIhavetositinthecarandcallinaworkcodetogetmypermittoworkbeforeIcanhelpthem”

CrawfordServiceTechnician

Thisnewwayofreporting,withmanythingstomeasuresuchasexactstartandfinish times, is a newway ofworking for Crawford and being able tomeet the

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requiredstandardwillprobablybeacriticalsuccessfactorforthefutureinorder

toworkwithFMcompanies.InCrawfordthereisstillnocompletelystandardisedprocess for it and often local solutions aremadewhen a flaw in the reportingsystemisdiscovered(Winling,Crawford).

4.3.3FMinthebusinessmodelSo,weredotheseFMcompaniesfitintoCrawford’scurrentbusinessmodel?Theanswerisnoteasybutfromourpointofview,veryimportant.Inthissectionwe

discusssomeofthedifferentviewsthereareamongtheCrawfordemployeesthatwereinterviewedinthestudy.Inchapter7wesuggestanewbusinessmodeltohow Crawford could approach FMcompanies to become even more successful

andprofitablewhenworkingwiththem.

Averycommonview inCrawford is thatpeoplesee theFMfirmsascustomers.Thefirstthingtoansweris;whatisacustomer?Therearemanydifferentrolesof

acustomer;theinitiator,thebuyer,thepayer,theuserandsoon,butultimatelyit is someonewhopays forgoodsor services (PrincetonUniversity,2009a). TheFMcompanies buy services fromCrawford, so they could absolutely be treated

like customers and today they are. The FMcompanies that Crawfordworkwithareon the customer list tobe compared toother customers in termsofordersandrevenue,theyareservicedbytheKeyAccountManagerstoensurethattheir

needsaresatisfied,theyhavetherighttospeakupifsomethingisnotwhattheyexpectedandtheyhavetherightsofacustomertoturntowhateversuppliertheywant.Soinmanysensestheyactandaretreatedlikecustomers,buttheydonot

fulfil all the roles of a customer; they do not pay, they do not use and do notalwaysinitiatethepurchase.Theybuytoresell.

Thetraditionalroleofawholesaler issomeonewhobuys largevolumestokeepthepricedownanddistributestheproductstotheendcustomers.This isalsoareasoningwesometimeshaveheard in the interviews,but if theFMcompanies

onlywerechannels to themarket,howcouldtheysometimesbesodemandingandimportant?Well,FMcompaniescannotbeequallydemandingtowardsalloftheirsuppliers, itdependstowhatextenttheproductorservicedeliveredcould

be considered a commodity. The importance of FMfirms for a company likeCrawford lies in the potential to grow with their success. Not seeingFMcompaniesascustomersdoesnotmeanthattheyarelessimportant,justthat

theyneedtobeseenfromadifferentview.

Like inmanyother companiesCrawford likes to call theorganisationsand firmsthatareimportantfortheirsuccesspartners.ThisqualifiesFMcompaniestothe

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partnertitle,andthepartnerviewisansweredbytheFMfirmsastheyliketocall

theirserviceproviderspartnersaswell.Therearedifferent levelsofpartnershipand no exact definition of the word, but common formulations often speak ofagreementstoshareresponsibilityforachievingaspecificgoaloragreementsto

pooltalentandmoneyandshareprofitsorlosses.Asomewhatsofterdefinitionisthat partners are the members of a business venture created by contract(Princeton University, 2009b). In the Business Model Canvas the partner block

represents outside organisations that are vital for the creation of the valueproposition.

Even if not said in exact words, the interviewees sometimes speak of the

contractswiththeFMfirmsasakeyresource.Alotofeffortisputintothetenderwork and into signing frame contracts that include more and more Europeancountries.ThesecontractsareveryvaluableifFMisthenewwayforCrawfordto

achievegrowth.Atthesametimekeyresourcesshouldbesomethingacompanypossessesthatgiveacompetitiveadvantage,thiscouldbethecasewiththeFMcontractsbutthereisnoexclusivenessincludedintheagreement,sotheFMfirms

arestillfreetochooseotherserviceproviderswhenitbettersuitstheirneeds.

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5FMintheBusinessContext

ThischaptermapsouttheFacilitiesManagementbusiness.Itstartswithgivinga short historical background before it clarifies the current situation on theFMmarket in the Nordics. It continues with describing the general businessmodeloftheaverageFMcompany.Intheendofthechapter,theauthorsaddressseveraltrendsinFMaswellasimportantactorsontheSwedishmarket.

FacilitiesManagementisgoingthroughaformofidentitycrisis.Thedisciplinehasmanydefinitionsandtherearemanydifferentviewsontheexactscopeofwhatis

really included in FM. Jahn Wahlbäck (2009), CEO for real estate consultantcompany Fasticon, takes it as far as to describe this topic as the single mostimportant issue to be clarified in order for the Swedish FM market to keep

developing (Addici, 2009a). As we have stated before, the European definitionpointsoutthatFMisaboutintegratingprocesseswhicharemeanttosupportandimprove the effectiveness of core activities. However, the history of the FM

industryandassociationsrelatedtoFMismakingitdifficultforthenewdefinitiontogetaccepted.ThereliesabigchallengeinconvincingthemajoritythatFMisadisciplinethatgoesbeyondthetasksofajanitor(AtkinandBrooks.2009a).

Figure11.DifferenttypesofFMservice.

Since there is no commonandaccepteddefinitionof FM there are also severalways of separating FM services. As seen in figure 11, one way is to divide FM

betweenInfrastructuralFM,TechnicalFMandBusinessrelatedFM.InfrastructuralFMservicesareingeneralsoftserviceslikecleaningandreception,whilsttypicaltasks within Technical FM are maintenance and reparations. The third area,

BusinessrelatedFM,relatestomanagementservicesand it isclearthatthere is

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an ongoing shift where many FM players are moving from just concerning

operationalandnon‐coreactivitiestoincludestrategicandcore‐relatedissuesaswell(Centigo,2009;FernieandWaheed,2009).Strategicactivitiesarebecomingmore commonwithin FM and they are related to long‐termdecisions and core

relatedactivities.Today,FMcoversthings likerealestatemanagement,facilitiesplanning, financial management, change management, human resourcemanagement, engineering service maintenance, utilities supplies, health and

safety and contract management (Atkin and Brooks 2009a). Despite this, mostactivitiesperformedbyFMcompaniestodayarestilloperationalandtheyincludeday‐to‐daywork such as canteen serviceor different kindof simple reparations

(Chotipanich,2004).

TheFMbusinessisaninterestingandchangingmarkingthatisgrowingeachyear(IFMA‐FMmarket,2009).Eventhoughtheindustryisstillinitsinfancy,itseems

clear that understanding organisational needs is the key to future efficiency inFM.(Nazali,NoorandPitt,2009).FMisnowadaysoftenmanagedasanintegratedactivity with other functions of an enterprise, but there are still many

organisationswhich have not realised the potential that lies within FM: “Manycompanies have yet to embrace the strong strategic power that FM carries”

(Amaratunga,Badry,HaighandPathirage,2008;Nazali,NoorandPitt2009).

SeeAppendixBforabriefexplanationofthelargestFMcompaniesinSweden.

5.1In­houseorOutsourcedFM

Allcompanieshavecoreandnon‐coreactivitiesbutitisnotalwayseasytodecidewhat category an activity belongs to, not even for the company itself. Coreactivities are business functions that are critical, and closely related, to a firm's

strategy. Such activities cannot per definition be outsourced, but non‐coreactivities could, if it is advantageous. FM is typically non‐core activities, which

meansthattheycouldbedonein‐houseorbecompletelyorpartlyoutsourced.Inotherwords, FM in itself doesnotmean that theactivity is outsourced.On thecontrary, most companies have an internal FM organisation even if it is not

expressed. Someglobal companieshave verybig internal FMorganisations thatcouldbenefit fromthesamekindofknowledgebuildingandeconomiesofscaleas the FM companies, but formost companies FM is just support to themore

importantcoreactivitiesthatoccupymostofthefocus.IntheFMcompaniesthefocusliesondevelopingthesupportactivitiesbecausethis isthecoreactivity.AstudyconductedbyLiverpool JohnMooresUniversitywasmadeonpeoplewho

47

worked with FM, either in an FMcompany or in an internal organisation. The

results showed that 92% thinks FMfirms are more innovative than internalFMorganisations(GoyalandPitt,2007).

WhenCrawfordhasadirectcontactwithacustomeritismostlikelythatitisthe

internalFMoroutsourcingfunctioninthecompanythathandlesthematter,buttheobjectiveof thisstudy is toresearchandunderstandtheFMcompaniesandthereforethefocusisonthem.

5.2FMHistory

TheconceptofFMemergedintheUSasaresponsetothebusinessenvironment

and the recession, and spread to Europe in the 1980’s (Coor Annual Review,2008).Organisations needed to cut downon overhead costs and operatemoreefficiently to keep upwith the continuously growing competition (Amaratunga,

Badry,HaighandPathirage,2008;Nazali,NoorandPitt,2009).Thefirstplayersonthemarketforoutsourcedservicesweresuppliersofoneorfewrelatedservices.These providerswere called single/bundled service suppliers and they normally

worked with basic support activities such as cleaning, catering etc. Over time,FMcompanies developed their offer as a response to customerswho desired asupplier who could offer a broader range of services. FM has developed even

further and today prominent FMcompanies cover a broad type of services. Todistinguish themselves fromearlier FMpredecessors these companies generallycall their offer something more elegant, like Integrated‐FM or service

management. This is because they do not want to be misinterpreted norassociatedwiththeoldwayofseeingFM.FMisstillquitenewforEuropeandthemarket is in an early development phase (Amaratunga, Badry, Haigh and

Pathirage,2008;PittandSarshar,2009).

5.3FMBusinessContextOverview

MostFMfirmshavedevelopedfrombeingsmallerandmorenichecompaniestointegrate more and more into their service offer. For example, ISSdevelopedfromasmallguardcompanyandSodexoarosefrombeingpresent in

the food industry (ISS wepage, 2009; Sodexo webpage, 2009). Even thoughFMcompanies have several qualities, the core competence is normally close totheareafromwhichthecompanyoncedeveloped.Asarule,servicesrelatedto

thesecompetencesarenormallydonein‐house.Inaddition,FMpersonnelcouldalsotakecareofservicejobsinmanyareas,whentheyarenottoocomplicated.

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Amongothers,NicklasSmithfromDalkiastatesthattheperfectFMtechnicianis

someonewhohasbroadknowledgeinmanyareas.However,becauseofthehugespan of services offered, there is no FM enterprise that could hold all thecompetencethatisneededtotakecareofeverything.Ingeneral,youcansaythat

FMcompaniesstrivetokeepactivitiesin‐housewhentheygeneratebigvolumesandwhentheyaresomewhatsimple.Therefore,FMcompaniesputoutsomeoftheirservicestoserviceprovidersthatarespecialistsinonearea.Crawfordisone

suchserviceprovider,whichmainlysupplyFMfirmswiththeserviceofindustrialdoors.Asyoucanseeinfigure12,CrawfordisjustoneofmanyserviceprovidersthatresponddirectlytotheFMcompany.Thedashedlinerepresentsthefactthat

Crawford, aswell as other service providers, perform the actual service not onFMcompanies but on their clients. In otherwords, FM professionalswork as amiddlemanbetweentheirclientsandtheirserviceproviders.

Figure12.FMcompanies’businesscontext.

5.4FMintheNordics

OutsourcingisbecomingmorecommonintheNordicsandtheregionisperceivedasoneofEurope’smostattractiveFMmarkets.TheNordicFMmarket is inhighgrowth as more companies are realising the benefits of allowing specialists to

manageanddevelopsupportfunctions:“Theregionhasastablemacroeconomicenvironmentand relativelyhighandconsistentgrowth,whileNordic companiesare becoming increasingly sophisticated buyers” (Coor Annual Review, 2008).

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SwedenhasthemostdevelopedFMmarketintheNordics(Capgemini,2006)and

isprobablynumberthreeinEuropeafterHollandandEngland,mostlikelyduetoanearlydevelopmentofthebusinessinSweden(Addici,2009b).However,thereis still lack of a natural career track and high level education of FM in Sweden,

whichtheyhaveinseveralothercountriessuchasHollandandEngland.

As canbe seen in figure13 thepotential FMmarket in Sweden is estimated toabout200‐250BillionSEK.However,only25%oftheaddressedmarketisactually

out‐sourced, whereas 75% is still in‐house activities. About one fourth of theoutsourced market is covered by FMcompanies and the rest is outsourced toseveral service providers. The growth potential for the outsourced market is

estimated to 10‐20% per year the upcoming years in Sweden and, at the sametime,theFMmarketisforeseentogrowevenfaster.Hence,theopportunitiesforFMcompanies in the Nordic regions are huge. This has also led to more

opportunities andnewactorshavealso arisenat the same timeasmany singleserviceprovidersstarttoincludemoreintheiroffer,andtherebyenteringtheFMmarket.(Capgemini,2006)

Figure13.BreakdowninpercentageofpotentialNordicFMmarket.

The degree of price transparency differs between FMcompanies but for theFMindustry as awhole it is high. This gives advantage to actorswith high cost

efficiency, and economies of scale becomes a large competitive advantage. TheprofitabilityfortheFMindustryismiddletolowwhichvariesdependingonhow

1)75%

2)19%

3)6%

PotenPalNordicFMmarket

1)In‐houseFM

2)Severalserviceproviders

3)OutsourcedFM

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wellacompanycantakeadvantageofeconomiesofscale.Thisalsoindicatesthat

FMcompanies probably have a greater opportunity to create more profitablebusinessthanmorenicheserviceprovidersdo(Centigo,2008).

In basically all service businesses it is important to have a personal approach,

whichbecomesachallengeforglobalorganisationslikeFMcompanies.Theyneedto work in a “glocal” way in order to do good business. In other words,FMcompanies need to think global and work local to meet challenges and

demands in different industries and regions, including the Nordic region(Plevén,Crawford).

5.5FMcompanies’GeneralBusinessModel

In figure 14 below, the typical business model for a facilities managementcompanyismappedoutintheBusinessModelCanvas.

Figure14.FMcompaniesGeneralBusinessModelintheBusinessModelCanvas.

5.5.1TargetcustomersThetargetcustomerdiffersalot,notonlybetweenbutalsowithinFMcompanies.

Due to the fact thatmostorganisationsneeda similar setofbasic services, the

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FMoffer often stretches over a wide set of customer segments. It should,

however, bementioned thatmost companies operatemore in some segmentsthan other. FMcompanies differ here depending on related core activities,alreadyexistingcustomer segmentsor traditionalandhistoricaldevelopmentof

thefirm.Some,butnotall,FMfirmsalsohavedifferentapproachestodifferentcustomer segments, depending on specific needs related to that segment(Pindstofte,JohnssonControls).

FM firms strive to work with customers over big geographical areas.Whateversizeofarea,whetherit isonacountrylevelormoreglobally,theyalltrytofindstrategic customers where it is possible to sign regional frame contracts.

(vanderLinden,Crawford;Wennerholm,Sodexo)

5.5.2CustomerrelationshipFMprofessionalsendeavourlong‐termandstrongrelationshipswiththeirclients

(Winling,Crawford).Onereason isobviously tostrengthen thebond inorder tomake them loyal which, in turn, results in more business. Moreover, FMfirmshavealsorealisedthatstrongrelationshipisthebestwayforthemtoperformat

top level and bring more value to the client. The better an FMcompanyunderstands a client and its unique needs, the better accomplishments will bereachedintheend(Chotipanich,2004).

ThesamereasoninghasalsoledFMcompaniestorealisethattheyneedtoworkonalong‐termbasiswiththeirserviceproviders.Intheextension,FMcompaniesare responsible for what service providers deliver and therefore it becomes

valuable to have a reliable supplier who can deliver quality services. FMfirmshave realised that if serviceproviders understand thebusiness of the FM client

theycouldcontributetoincreasedperceivedvalueofcustomersandhence,inthelongrun,bringmorebusinesstoFM(Wennerholm,Sodexo).

5.5.3ChannelsFMreachesoutandcommunicatesto itscustomers inmanydifferentways. It is

morecommontoexpandtheoffertoanexistingclientthantofindatotallynewone. The FM offer is comprehensive and therefore there are always moreactivities thatcouldbebundled in to theservicepackage. It is relativelyeasy to

gain business with existing customers where relationships are good and wherelong‐termtrustcanbebuilt(Wennerholm,Sodexo).

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Onecommonwaytoreachouttonewcustomersistosellinbyexpressingwhatis

reallycoreinthecompany.Dalkia,which’scoreliesclosetoenergy,triestoreachtheircustomersbyofferingenergysolutions(Smith,Dalkia).

Softerfactorssuchaspersonalnetworksarenottobeunderestimatedasawayto

findmorebusiness,incontrastitisactuallyquitecommon(Hernström,Eurest).

TradeassociationssuchasIFMAandEuroFMareanotherwayofmeetingpeoplewithin the FM business and it could be another channel to find new business

(Hernström,Eurest).

5.5.4OfferFM operates in the service business and in order to survive it is important to

constantly bring value to customers. Brian Atkin and Adrian Brooks (2009)introduce,intheirbookTotalFacilitiesManagement,theconceptof‘bestvalue’.Valueformoneyexpressessatisfactionwiththecostofagoodorserviceofgiven

quality,which inapracticalwayoftenmeansreducingcosts. Inadditionto this,the concept of best value implies a need to strive continually for somethingsuperioratthelowestpracticablecost.Toachievebestvalue,performanceshould

bemeasuredagainstbothcostandqualityandthisisoftenwhereFMcompaniesaresuperior.

One of the core competences of FM professionals is to coordinate the service

providersinaneffectiveway.Oneoftheperceivedvaluesoftheclientliesinjusthaving toworry about one number to call and one bill to pay instead ofmanydifferent.Many companies appreciate this because they could put all focus on

theircoreactivitiesandsimplyletgooftherest(Wennerholm,Sodexo).

Mostofthetime,FMcompaniescanlowerthecostsfortheirclientsorraisethe

valueforthesamemoney.(Addici,2009c).Aswehavestated,thecoreactivityforFM professionals is to take over non‐core activities and give support to coreactivities of other organisations. This competence has given FM companies the

abilitytomaketheirclients’businessmoreefficientlyandhencealsolowertheircosts(GoyalandPitt,2007).

Another benefit from outsourcing FM activities is the reduction of conflicts

betweeninternalandexternalserviceactivitiessinceeverythingishandledunderoneroof(CEN,2007).

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Solutions with FM firms also allow organisations to have more transparent

knowledge and information to service levels and priceswithin the organisation(CEN,2007).

Another important factor when companies choose FM is the international

presencetheyoftenhave.

5.5.5KeyactivitiesTherearemanyactivitieswithinanFMcompanyandbeingabletoorganisethem

in an efficient way is a key to success. Good planning with obtained synergyeffects lead to cost reduction and make processes more efficient. Utilisingeconomies of scale and finding these synergy effects by harmonising delivery

between sites require high performing IT processes, and the management oftheseITprocesseshasalsobecomeoneofthekeyactivitiestoFMfirms.(Larsén,Centigo)

Theadministrationprocessisanotherkeyactivity.Itisessentialtocoordinateandcontrol in an efficient way; service providers have to be organised,communicationneedstoflowwell,trackrecordshavetobeupdatedetc.Inorder

to do that, reporting andmonitoring systems need to be in place and functionwell.(Pindstofte,JohnssonControls)

Procurement is also important. To keep costs down and to deliver the best

service, FM companies need to make sure that they cooperate with the bestserviceproviderand theycontinually re‐evaluate thecontracts. It is common toscanthemarkettocomparewithotherprovidersandeventhoughtheaimisto

keeptheexistingprovider,itisstillawayforFMfirmstorenegotiatethecontractandputpressureontheprovidertostaycompetitive.(Wennerholm,Sodexo)

5.5.6KeyresourcesFMcompaniesoperateintheservicebusiness,whichisintangibleandsomethingthatishardtograsp.Therefore,theknow‐howofhowtodelivertherightservicesolutionisakeyresource.Itisnoteasytotakeoverandsupportabigpartofan

organisationandtheknowledgenecessarytobringallthepiecestogethershouldnotbeunderestimated.

AccordingtoRönnholm(ISS)themostimportantassetsaretheservicepersonnel

andmotivatedleaders.HebelievesthattheFMbusinessisaboutsoftvalueslikerelations, service attitude and experience where it is the people who make a

differencetowhetherornotaclientissatisfiedintheend.

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AnothervaluableresourceforanFMcompanyisitsserviceproviders.Itisofhigh

importancetohavetherightsupplierwhichdeliversthequalitynecessarytoliveuptothestandardsoftheclient.Afterall,FMfirmsaretheonesresponsibleforeverythingthatserviceprovidersdo.

5.5.7PartnernetworkIn general, all suppliers are included in thepartnernetworkof anFMcompany.ManyFMfirmshaveshiftedfocusfromhavingabuyer‐supplierrelationwiththeir

service providers to view them as strategic partners. That way, the serviceprovidersbecomemorecommittedandbothqualityandvaluetothefinalclientincrease.

“Wearetryingtocreatepartnerswhocanmakeuslookgoodintheeyesofourendcustomers”

OlaHernström,Eurest

According toAtkinandBrooks (2009), relationshipsbetweenFMcompaniesandtheir providers should be encouraging continual improvement. They also statethat sourcing services based on partnership have become a popular, and even

establishedbasisforrelationshipswithsuppliers.

Sometimes coopetition occur between FMcompanies, which is when normallycompeting companies cooperate. This normally occurs when FMcompanies

complementeachotherandtogethertheycouldbringhighervaluetotheclient.Forexample,SodexosometimesdoesthefoodserviceforanFMcontractthatissignedtoJohnssonControls(Pindstofte,JohnssonControls).

5.6TrendswithintheFMmarket

OriginallyFMwasseenasanisolatedactivityandwasconsideredasanoverhead

cost.With time ithasbecomemore importantand todayFM isoftenseenasafunction that is vital to an organisation’s overall success (Amaratunga, Badry,HaighandPathirage,2008).

There are many opinions regarding current and future trends within theFMbusiness. We have addressed the ones that we find most relevant to theindustrialservicesectorandinparticularCrawford.

5.6.1LinkingFMtoclientstrategyIt is a critical success factor for FMcompanies to link the roleof facilities to anorganisation’s core business. Luckily enough there is a trend showing that

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companymanagementisalsopayingmoreandmoreattentiontowhatFMhasto

offer and therebybringing FM into theboardroomoforganisations (Capgemini,2006). There needs to be a match between FM dimensions and the businessstrategyofanenterprise.Onecould thinkof itasa line that separates thecore

activities fromthenon‐core.Coreactivitiesaredone in‐housewhereasthenon‐core activities could be outsourced if profitable. This line is slowly shifting andactivitiesthatoncewereconsideredcoreoftenfallontheothersideoftheline,

hence becoming non‐core activities for the company. This shift creates anopportunitywhereFMcompaniescantakeovermoreactivitiesandatthesametime get closer to the core‐related issues of the client organisation (Pindstofte,

Johnsson Controls). There is also a trend that FMcompanies have a structurewheretheyworkdifferentlytowardsdifferentsegmentsinordertogainexpertisein the specific area and understand the needs of the customer even better

(Pindstofte,JohnssonControls;Wennerholm,Sodexo).

ThefactisthatFMcompaniesarenowstrategicplayersformanyenterprisesandvitalfortheirclients’success,henceFMneedstosupportthecoreofthebusiness

as well as taking care of the non‐core activities (Nazali, Noor and Pitt 2009).FMcompaniesneedtofocusonlong‐termcorporatebusinessstrategyinsteadof

only short‐term focus on tactical or operational levels (IFMA, FM forecast).Chotipanich and Nutt (2008) claim that FM support should focus on“operationalstrategy”ratherthanoperationandstrategy independently,andby

doingsoprovidealinkagebetweenthetwo(Pindstofte,JohnssonControls).

With all these demands from the market it is easy to conclude that theFMbusiness, just as many other industries, is becoming more knowledgeable.

FMcompaniesareworkingwithmoremanagementand strategicquestionsandthereisadesiretobringwell‐educatedpeopleintotheirorganisations.Thisisduetothe increasinglycomplexenvironmentaroundFM,whichputshigherdemand

on the work force, and it becomes more important to have the right peopleonboard(IFMA,FMforecast;Bröchner,2007).

5.6.2ChangemanagementandflexibilityThistrendreferstothefactthatallmodernenterprisesaremovingfasterandarebecoming more flexible. FMcompanies needs to understand this environmentand act with it to fully succeed. According to ErikWennerholm (Sodexo) being

flexiblemeans everything to an FMcompany. The constantly changing businessclimate within companies has led to a trend where change management hasbecome of high importance to FM firms. FM plays a vital role in helping

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organisationsinmanagingchangebyenablingthemtomovefromwheretheyare

todaytowheretheyhavetobetomorrowtomeettheirbusinessobjectives(Atkinand Brooks, 2009c). Each organisation will have different needs and sinceFMcompaniesoperateonseveralmarketstheyneedtodevelopasetofskillthat

covers many areas. Identifying the influences for change in the businessenvironment and developing facilities to accommodate it are central to the FMfunction(Nazali,NoorandPitt,2009).

5.6.3SustainabilityTheworldisbecomingmoreawareofenvironmentalissuesandmanyenterprisesemphasize on sustainability and energy related questions. New legislation

continuestoappearregardinghealth,safetyandenvironment,andFMfirmshavetomaster the changes to not be in breach of the legislation (Atkin andBrooks,2009d). There are double incentives for businesses to put a lot of emphasis on

sustainability.Apart fromnormal cost saving reasons,which is thenormal case,they also gain a lot of publicity and public recognition. Therefore, sellingsustainable solutions could simplify the marketing process towards end

consumers (IFMA, FM forecast). Bengt Håkansson, who is VP for Coor ServiceManagementSweden,agreesandhebelievesthatsustainabilitywillbeoneofthebiggestsalesargumentsforFMfirmsinthenearfuture(Addici,2009c).According

to Bertil Oresten, CEO at FM konsulterna, sustainability is probably the biggesttrend and it is a theme high up on the agenda within FM companies(Oresten,FMkonsulterna).

5.6.4TechnologydevelopmentA significant challenge to FMprofessionals is tomanage the several systems inoperation and utilise these systems to their fullest potential. The rise of these

technologiesandInformationandCommunicationTechnology(ICT)intobuildings,especiallywith smart sensorsandcontrols, indicates that FMstrategiesneed tobetiedtotheICTstrategyandthebusinessstrategyofotherorganisations(Atkin

and Brooks, 2009e). Facility management professionals will be expected tomanagefacilitiesbasedontechnologicalmodelsandsystemslikeBIM8andIWMS9(IFMA, FM forecast). FM companies seem to already put a lot of focus on

technologysystemstogivesupporttotheirprocesses.Forexample,Coorstatesinthe annual report from2008 that the companywill invest in system support to

improve itsmonitoring systems. Tim Pindstofte (Johnsson Controls) claims that

8BuildingInformationModeling9IntegratedWorkplaceManagementSystems

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JohnssonControlsareconstantlyimprovingtheITsystemstobeabletomonitor

andcoordinateprocessesmoreefficiently.

5.6.5GlobalisationTheworldisconstantlybecomingmoreglobalised.Thereisagrowingdemandfor

FMcompanies to work acrossmany geographical areas, where decisions aboutoutsourcing are becoming more centralised (IFMA, FM forecast; Capgemini,2006). Pindstofte (Johnsson Controls) means that more decisions are being

centralised and it is becoming more common that clients want to sign framecontracts where FMfirms are expected to give support to the client in allcountries where they are present. In turn, there is also a demand where

FMcompaniesarelookingforserviceproviders,whichcancoverandoperateonbiggeographicalareas.

At the same time as globalisation leads to greater opportunities for

FMcompanies, it also means that some challenges arise. FMfirms have tounderstand and act upon many differences between countries including issueswithlaw,culture,environmentallegislation,languages,educationsetc.(IFMA,FM

forecast)

5.6.6FMcompaniesexpandstheofferTheFMprofession isabout improvingandmakingprocessesmoreefficient.The

marketputsbigfocusoncostefficiencyanditisvitaltokeeptheFMbudgetdown(Capgemini,2006;ErikWennerholm,Sodexo).Forexample,itisbecomingnormalto use key figures as a way to measure how well the FMcompanies have

performed. Working to improve the processes and lower customers’ costsbecomesaparadoxforFMcompanies.Constantlymoreefficientprocessesmeanless work, fewer personnel and decreased revenue in the long run. In other

words,FMcompaniesareslowlycuttingtheirownlegsandthisissomethingthatBertilOresten (FMkonsulterna) identifiesasoneof thebiggest future issues forFMcompanies.Tosolvethisissue,FMfirmsareconstantlytryingtoincludemore

services into their offer. Looking back in time, as we have described, singlebundled services developed into Facilities Management with coordination ofmanyservices.This,inturn,hasdevelopedevenfurtherandtodayFMcompanies

include many activities that were not included before, for example issues ofstrategicconcern.ThisdevelopmentiscontinuingasFMcompaniesworkcloserto

thecoreoftheirclients,andopportunitiestodeveloptheofferevenmorehavearisen. By includingmore services into the offer, costs can be lowered on oneactivitybutthetotalrevenueisstillincreasing.

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5.6.7Morein­houseactivitiesAnothertrendisthatFMcompaniesstrivetohavemoreactivitiesdonewithownpersonnel instead of delegating to service providers. By doing so, FMfirms can

lower the prices or raise themargins to the client as onemark‐up is taken off.Having more activities in‐house gives better control over the services that areofferedtoclients(Pindstofte,JohnssonControls).Itisalsoseenasapossibilityto

learn and become more knowledgeable. Nicklas Smith (Dalkia) claims that,wheneverthereisadifficultproblemtosolve,thebestthingiswhenonepersonfromDalkiacouldattendtogetherwithonepersonfromtheserviceprovider.This

way,thecostcanbeloweredatthesametimeasmoreknowledgeisbroughtintothecompany.

However, it should be mentioned that FMcompanies realise that they need

serviceproviders thathavespecificcompetence.Forexample,ErikWennerholm(Sodexo)statesthatserviceprovidersplayanimportantroleinordertoofferhighvaluetocustomers.

5.6.8FromsuppliertopartnerFMcompaniestrytoentermorelong‐termrelationships,wheretheystrivetobeapartnerratherthantraditionalcontractor.Apartfromgettingmoreloyalclients

theyalsogetmore insight into theclient’scompany,which in the long runhelpthemunderstandthecoreoftheorganisationandthereforebringmorevaluetothecustomer.Toachievethis,FMfirmstrytosignlong‐termcontractswiththeir

clients. A long‐term contractwith fixed price could, however, alsomean higherrisksduetofluctuationsintheeconomywhichcanaffect,forexample,salaryandrawmaterial.(AtkinandBrooks,2009f;Pindestoft,JohnssonControls).

By extension, FMalso tries tomake the relationshipswith their suppliers to bemoreof a partnership, to bettermeet thequality and standard requiredof thecustomer. Another related trend is the wish of FM firms to have few service

providers that are comprehensive instead of many small. That way the serviceofferedisthesameinallcountriesanditmakesiteasierforFMtoquality‐assurefewer suppliers. It is also easier to strengthen the bondswhen there are fewer

service providers, and to see them as a partner rather than a supplier(Wennerholm,Sodexo).

However, thesestrongrelationscouldalsobeadisadvantage forFMfirmssincetheir clients are also becoming verywell‐informed about the FM activities. Theclientstartstoresearchandbenchmarkbythemselvesandtheystarttodemand

moreandlookforotheralternativesastheknowledgegapbetweentheFMfirm

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and the customer is decreasing.On the other hand, ErikWennerholm (Sodexo)

believes that it is basically impossible for customers to take everythingback in‐housebecauseoflackofknowledge.

5.6.9EmergencypreparednessThere is a growing demand for FMcompanies to handle the emergencypreparedness.ItisafairlynaturalstepforFMfirmsastheytakecareofbuildingsand therefore have to deal with new demands that are put on the buildings.

Emergency preparedness includes a wide spectrum of issues that can affect abusiness and its employees suchas safety‐ and security relatedquestions.A lothastodowithnewroutinesforthepersonnelbutitcanalsoincludethingssuch

astheimprovementofexitsthroughbetterdoorsolutions.TomeetthischallengeFMfirms need to learn how to analyse vulnerabilities and develop protectionstrategies(IFMA,FMforecast).

5.6.10InnovationInnovationisnotonlyessentialforcorporatesuccessbutalsocommonlyviewedas extremely important for business survival. The FM industry is dominated by

serviceinnovation,andinnovationisbecomingakeytostayaheadofcompetitors(Nazali,NoorandPitt2009).

Customers expect FMcompanies to be innovative and proactive to constantly

delivernewwaysto improveactivities.This isbeingrecognisedbyFMfirmsandseveral of them have innovation processes implemented in the organisation(Pindstofte,JohnssonControls).AresearchmadebySoniaGoyalandMichaelPitt

attheSchoolofBuiltEnvironmentinUKshowsthat79%ofcompaniesinvolvedinFM believe that there is much scope for innovation in facilities management(2007). One of the worlds biggest FM organisations, the BIFM10, also reflects a

growing recognition of innovation in the FM sector (Journal of FacilitiesManagement,2006).

10BritishInstituteofFacilitiesManagement

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6Crawford’spositionintheFMbusiness

In this chapter theauthors recommend theposition in theFMbusiness that isbest suited to Crawford’s competences and organisation, in other words, thepositionwherethecompanyismostlikelytobesuccessfulandprofitable.First,twoalternativepositions to theoneheld today inCrawfordarepresentedandafterthatthecurrentandchosenpositionforCrawfordispresented.

6.1AlternativePositions

Aswetookonthechallengetowritethismasterthesis,ourknowledgeabouttheFMbusinessandCrawfordwasverylimited.OurobjectivewastoresearchtheFMbusiness andevaluatehow it could influenceonCrawford’sbusiness andbased

onthefindingsgivestrategyrecommendationstothemanagementteam.Onanearly stage many different possible future positions for Crawford in the FMbusinesswerediscussed.Duringtheresearchprocess itbecamemoreandmore

clear to us how the whole FM business was fitted together and many of theinitiallydiscussedpositionsnolongerseemedlikefeasiblealternatives.Belowwepresent themain characteristic positions thatwere discussed.We alsowant to

clarifythattherecouldbemanyoptionalpositionsinbetweentheoneswehavepresentedbelowbutourreasoningpointoutthemaindirectionwhereCrawfordhasthebestchancestobesuccessful.

6.1.1BecomeanFMcompanyOneofthefirstoptionswecametothinkaboutwastheopportunityforCrawfordtobecomeanFMcompanyandtakeupthecompetitionwiththeexistingplayers.

Wesawtheopportunitytostartbroadeningtheofferwithmoreservicesanduseservice providers for tasks that could not be done with own personnel. Thegrowingmarketandthe increasedoutsourcingdemandfromcustomersmade it

looklikethiswouldbeafeasibleoption,butlaterresearchmadeusletgooftheidea.

The main reason for not becoming an FMcompany is the classical theory of

focusingoncorebusiness.Crawfordhasalotofcompetenceintheindustrialdoorbusinessbutstillverylimitedexperienceofbeingaserviceorientedcompanyandeven less experience of organising andmanaging other service companies on a

global level. TheFMoffer ismorecomplex than it looks likeat first sight.More

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andmore technology, advisory and efficiency activities are incorporated in the

offerandthebusiness is inconstantprogress.Butstill it isa lowmarginservicebusiness,oftenwithasmuchas90%ofthecostsinpersonnel(WarchalowskiandTorehall,Ernst&Young).

Eventhoughsmall,specialisedFMcompaniesstillemergeonthemarketthebigfirmshaveasubstantiallead.Thesizeoftheorganisationtogetherwiththewidthof the service portfolio gives a considerable competitive advantage and low

marginbusiness demands volume tobeprofitable. In these typesof businessesthereisoftenjustroomforafewmajorplayers.

“Slowlybutsurely,therewillbeaconsolidationinthe(FM)business,theconstructionbusinessisagoodexamplewherewetenortwentyyears ago had more than ten companies but today only three ormaybefourstrongplayers“

PeterLarsén,managementconsultantCentigo

The FMcompanies often have their roots in services like canteen, cleaning,securityorfrontdesk,whichmeansthattheyhavestationedpersonneloratleastdaily visits to all their sites. These services are often an easy way in for the

FMfirmssotheylatercanbroadentheirofferanddomoreandmoreactivitiesonthe sites. Crawford has a very large customer base, which speaks to theiradvantage,butoftenthesitesarevisitedonlyafewtimesperyear,whichmeans

thatCrawfordwouldnotbeabletocompetewiththeexistingplayerswiththeircurrentorganisation.

6.1.2StandalonestrategyAnotheralternativewouldbe to refuse toworkwith theFMfirmsand thatwaystill have the direct contact with the customers. Without a middleman therelationships could be stronger,more controllable and highermargins could be

obtained. Today this is thepreferredwayofworking andCrawford is seenas astrong and reliable company with an offer that often exceeds the customers’

expectations. Among door service companies Crawford is ahead of thecompetition,whichcouldgivethecompanyastablestandaloneposition.

Not to forget is that oneof the FMcompanies’ strong sides is to organise local

serviceproviderstogiveacomprehensiveserviceoffer totheircustomers.Eventhoughthisisnotapreferredwayofworking,itwoulddefinitelybeagreatthreattoCrawfordiflocalserviceproviderswereusedinstead.

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Besides the fact that Crawford alreadyhasmanyestablished good relationships

withFMfirmstherearesomegoodreasonswhytheyshouldnotbeignored.Oneis the fact that the FMcompanies aremoredemanding andexpectsmore fromtheirsuppliers.Thiskeepstheserviceprovidersontheedgeandstimulatesnew

ways of thinking. This forced development could benefit even the othercustomersthatstillhavetheirservicedealsdirectwithCrawford.

As stated earlier, the FM outsourcing business is one of the fastest growing

marketsinWesternEurope.Thepotential ishugeforcompaniesthatmanagetobenefitfromthebusinessopportunitiesdevelopedinandaroundoutsourcedFM(Winling, Crawford). FM firms already haveways intomany companies through

simplersingleservicesandtheycontinuouslytrytobroadentheirservices.

“Wehavebeeninthesingleservicebusinessaverylongtimesowealready have customers all over Sweden, maybe we just deliver afruit basket but the relationship is there. This is our growthplatformand,asIseeit,ourmostvaluablechannel.”

ChritianGyzander,BusinessdeveloperISS

The chance to convince customers to keep the door service outside the FM

packageoffer isnotvery likely inthe longrun.Maybeforsomecompanieswithveryhighnumbersorhighcriticalityof industrialdoors, suchas logistic centres,butfortheaveragecustomertheindustrialdoorsarenotmorecrucialthanother

partsofthebuilding.

6.2ContinueasServiceProvider

AbovewehavediscussedthetwoothermainpositionsthatCrawfordcouldstrivetowardsintheFMbusiness.OuranalysistellsusthatthoseareneitherpreferablenorlikelytobeprofitablepositionsforacompanylikeCrawford.Atthispointwe

donotgofurtherintopossible“greyzone”positionssuchasabroadenedserviceoffer towards FMcompaniesor goexclusivelywithone FMcompany, but settleforthefactthatCrawfordshouldbeintheserviceproviderpositionandhasgreat

opportunitiestobeverysuccessfulwithinit.

As we described earlier, Crawford already works as a service provider towards

FMcompanies today. There are definitely both pros and cons in this way ofworkingbutifmanagedrighttheadvantagesbyfaroverweighthedrawbacks.Aswe have stated above the potential to grow together with FMcompanies is

significantandthegrowthcouldmeananeasywayformarketingandgainingnew

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customers. FMcompanies could also be a door opener to new geographical

marketsandcustomersegmentswhereCrawforddoesnotseeanaturalentrancetoday.

TherearedefinitelychangestobemadeanddifficultiestoconsiderifCrawfordis

tobereallysuccessfulasaserviceprovider.TheFMbusinessisinconstantchangeandtheserviceprovidersmustcatchupwiththeadoptions.CrawfordhasalreadycomealongwayintheprocesstosatisfythespecialneedsofFMcompaniesbut

therearestillmanythingsthatcouldbefurtherdeveloped.

Figure 15 summarises our recommendation regarding Crawford’s strategicposition as service provider. In the next chapter we address the key things a

service provider in general and Crawford in particular must consider in orderbecomethepreferredprovider.

Figure15.TherecommendedpositionforCrawford.

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7CrawfordasPreferredServiceProvider

Inthischapter,theauthorsgiverecommendationstohowtheybelieveCrawfordshould act to be the preferred service provider, which is summarised inCrawford’sFMBusinessModel.TheauthorsidentifywhatFacilitiesManagementcompanies see as the key factors for a service provider to perform well. Allfactors are evaluated, and discussions are held regarding Crawford’s currentprogresswithineachofthesefactors.

WhatkeyfactorsdoFacilitiesManagementcompanieslookforwhenitcomestochoosingaserviceproviderandhowshouldaserviceproviderlikeCrawfordthinkandacttobecomethepreferredsuppliertowardsFMfirms?

"IfyouwanttobesuccessfulwithFMyouneedtothinklikeFM”

PeterLarsén,Centigo

FMcompaniesingeneralaregoodatprocurement.Eventhoughtheyaresatisfiedwith a provider they periodically tend to look over the contract and do some

benchmarks to compare price and quality with other providers (Lauseger andArgurs,Pricegain).Therefore,inordertokeepworkingwithFM,itbecomesvitalfor a company like Crawford to stay competitive to be the preferred service

provider.

FMcompanies,aswellasallcustomers,desire thehighestquality to the lowestprice. Low cost has always been an important sales argument for FM firms but

Wennerholm(Sodexo)statesthatthegoldendays,whenFMcompaniescouldcut20% of their clients’ costs, are over. This could be explained by an increasedknowledge within the clients’ purchasing department and also because more

competitors have arisen on the market. Still, according to several of ourinterviewees,especiallybecauseof therecent financialcrisis,price isoneof themost important factors when it comes to choosing FM company and hence

important when FM companies choose their service providers (Ernst & Young,2009a).Othersclaimthatfactorssuchasservicequalityandcompetentpersonnelaremore important thanprice (LausegerandArgurs,Pricegain).Towhatextent

qualityorpriceisthemostimportantfactordiffersalotbetweenFMcompanies,butthehighratioremainsverydesirable.

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Basedonour research,wehave identified key factors that FM firms look for in

their service providers. Quality and price are not brought up as two such keyfactors because they are desired by everyone and not by FM companies inparticular.Wewilllistanddiscussaroundwhatwebelievearethemostimportant

factors to look over and improve for a service provider with the aim ofstrengtheningthepositionwithFMcompanies.Ineachsectionwewillargumentwhy FM companies believe the specific factor is important, we will address

implementation challenges andwewill discuss Crawford’s current position andpossible recommendations for the future. To give you an overview, we firstsummarisethekeyfactorsinwhatwecalltheCrawford’sFMBusinessModel.

7.1Crawford’sFMBusinessModel

The issueswe discuss below arewhatwe believe to be themost important to

consider when it comes to approaching FM companies, as opposed to othertraditional customers. Figure 16 shows our recommended business modeltowardsFMcompaniesmappedoutintheBusinessModelCanvas.

Figure16.Crawford’srecommendedbusinessmodeltowardsFMcompanies.

Thepointwith themodel is to give a goodoverviewof our findings and at thesametimeillustratewhereintheorganisationthespecificfactorsareconnected.

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Themoreof the factors thatare inplace, themore likely it is foracompany to

become the preferred service provider. Partner Network, Key Activity and KeyResourcesallaffecttheOffertowardsFMfirmsand,ifimplemented,allidentifiedfactorswill raise the total value of the offer towards FM. The right part of the

modeldescribes,asweallknowbynow,thecustomerside.Forreasonswewillexplainbelow,webelievethatFMcompaniesshouldbeseenaschannelsandnotascustomers.ToCrawford,sinceallbusinessismadedirectlywithFMcompanies,

therelationshipbuildinginthismodelshouldnotonlybetowardstheFMclientsbut also towards the FMcompanies as channels, illustratedby the arrow in thefigure. However, even though the building of relationship is not only with

FMclients,itisstillimportanttomakeanefforttounderstandtheirbusinesses.

Obviously there are many issues taken into consideration in this model and itwouldbeimpossibleforanorganisationtoincorporateallthechangesatonce.In

Crawford’scase,someofthefactorsaremoreinplacethanothers.Aswell,therearedifferencesofhowdifficultandcostbearingthefactorsaretoimplement.Byextension, there is a need to prioritise between the factors. As we have

mentioned,wehave listedthefactorsthatfromanFMperspective iswhattheydesirefromserviceproviders. It isoutsideourscopeandbeyondourknowledge

to judgewhich factors that could be financedwithin Crawford andwe humblyresignfromrecommendationsregardingthismatter.

It does not matter how theoretically good the ideas are if nothing will be

implementedintheend.Anoverallchallenge,forallchangestotakeplace,istohave an organisation that is flexible and willing to change. Crawford is a bigorganisationwithalotoftradition,andquitenaturallyithasnotbeenknownfor

itsflexibility(Leichtnam,Crawford).Ontheotherhand,beingonthisbigshiftingjourney,thecompanyisgoingthroughalineoforganisationalchanges.ThiscouldbesomethingthatfacilitatesalotforCrawford,shouldtheydecidetoimplement

anyofourfindings.

7.1.1UnderstandingtheclientsofFMcompaniesIn chapter 5 we identified that it is a critical success

factorforFMcompaniestounderstandthecorebusinessof their clients. We have seen that this has led to agrowing desire for FM firms to get service providers to

work in the same direction. All of our intervieweesbelieve that the ultimate goal of a provider, whether it being a service or aproduct provider, is to please the end user of the FM company. In addition to

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manyotherrequirements,FMfirmsoftendemandofaserviceproviderthesame

thingasaclientdemandofanFMfirm;hence it isofhigh interest foraserviceprovidertoreallyknowthebusinessoftheendclient.Itmightsoundobviousbutit is importanttobear inmind,asthecontactwiththeendclientgetscutoffto

someextentwithFMasamiddleman.

It isalsoimportanttorealisethatunderstandingtheendcustomerisnotalwaystheeasiesttask.Companieswithinaspecificsegmenthavedifferentneeds,they

periodicallychangewhattheydesireandneedsnormallydifferindifferentlevelsof the organisation (Sarshar and Pitt, 2009). All big FM companies strive tounderstand the business of their customer but to what extent differs a bit

betweenthem.ChristianGyzander (ISS)estimatesthatabout80%oftheserviceoffer is the same to all customers and the remaining 20%differs depending onspecific requirements, leaving theserviceofferquitesimilar toall segmentsand

customers. Some FM players, like Johnsson Controls and Coor, have customercentric organisations that look at each client and form different value offerstowards different customers depending on their specific needs (Pindstofte,

Johnsson Controls). Still, the main part is the same which make economies ofscalesoimportantintheFMbusiness.

Crawfordmakesefforts inunderstandingtheircustomersandtomentionone,asegmentation project aiming to comprehend different types of customers hasbeen conducted in Sweden. Today, whenever Crawford loses contact with a

customerduetoanFMfirmbeingamiddleman,CrawfordusesknowledgeaboutsimilarcustomerswherecontactisgoodandappliesthatsameknowledgetotheclientoftheFMcompany.Thatway,becauseofabroadcustomerbase,Crawford

still knows a lot about their clients even though sometimes there is no strongrelationship.

“Crawfordknowstheendcustomers,itistheFMplayersthatwedonotknow”.

TimWebster,VPSales&MarketingCrawford

The challenge will be to keep the same level of knowledge even though thedependence of FM companies becomes bigger and when, in turn, direct

relationshipswithendcustomersweakenanddecreaseinnumber.

WebelievethatFMshouldbeseenasachannelthatenablesCrawfordtoreachendcustomers.Theessenceofhowtheworkisdoneispracticallythesame,but

themindset is important tohave. Even though all business and all contacts are

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madedirectlywithFMfirms,itisimportantnottoforgetwheretheactualservice

isperformed.Ifserviceprovidershavethatmindsettheyneverlosefocusontheendclient,which isessential tokeepdeliveringtopclassservice.Agoodwayofbeing updated of the FM clients’ businesses is to apply knowledge from similar

traditionalcustomers.Insum,FMcompaniesshouldbeseenasaveryimportantchannelandpossiblyevenaspartners,whichwewilldiscusslater.

7.1.2BuildstrongrelationshipswithFMcompaniesInadditiontoknowingthebusinessofFMclients,softvaluesare becoming increasingly important for FM companies.Gyzander (ISS) claims that the personal relationship they

have with service providers is one of the most relevantfactorswhenitcomestochoosingwithwhomtocooperate.Oresten(FM‐konsulterna)saysthatFMwillbean industrythat ismorefocused

onrelationsandexperience.Peopleandtheservicedeliveryaretwoofthemostimportant key attributes in general regarding added value according to Sarsharand Pitt (2009)who also think that FM should emphasizemore on relationship

marketing.ByimprovingrelationsaserviceproviderlikeCrawfordcancontributetothisaddedvalueandhencepleaseboththeFMclientandtheFMfirm.

Thechallengewithimprovingcustomerrelationshipsliesinbuildingtrust,whichis

achieved by keeping promises and clearly communicating the work performed(Atkin and Brooks; 2009f; Sarshar and Pitt, 2009). In addition, of course, it isimportant to have the right people with a service focused mindset where the

clientshouldstandinthecentre(AtkinandBrooks.2009g).

Crawfordhasastrategyofbuildinglong‐termrelationshipsandthecompanyhas

put a lot of effort in strengthening bonds with customers to understand thembetter.Forexample,aKAM11organisationhasbeensetuptoworkdirectlywithimportantendcustomers.Today,theKAMorganisationisworkingwithtraditional

customersaswellaswithFMcompanies.Wesuggestthattheapproachshouldbedifferent towards these two types of players. Aswe now know, FM companiesshouldbeseenaschannelsand is thereforenotendcustomers.However, since

FM firms are such important players, there still needs to be a group of peopleworking to build andmaintain relationshipswith them and their clients, the socalledFMAM12.

11KeyAccountManager12FacilitiesManagementAccountManager

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“Weneedpeoplewhounderstandus.One example couldbe in thetenderprocesswheretimesaregettingshorteranddata isgettingscarcer.Ateamthatcouldhandleatenderwithinmoreorless24hwouldbevaluabletous.”

JensRasmussen,BusinessDevelopmentManager,Coor

It couldmost certainly be the samepersonworking as KAMandas FMAM.Wejustmakethis reasoningtopointout that there isabigdifferenceworkingwithtraditionalcustomersandFMfirms.Webelievethatgainingthisperspective for

KAM people working within Crawford could mean a clear and definite linebetween how to deal with traditional customers and how to deal with FMcompanies. The separate roles also aim to clarify that these two players are

interested indifferentvaluepropositions fromCrawford. TheKAM’s traditionalstrategicofferwithe.g.pre‐packedservicelevelagreementsisnotinterestingforFMfirms,butthisshouldneitherbeaproblemnorconfusingeventhoughthereis

anotherstrategicoffertoFMcompaniesfromtheFMAMs.Thenextstepistosortouthow, then,do theseplayersdifferexactly?ANFMcompany isamiddlemanand therefore has different incentives than other customers do. In general,

FMcompanies have a more open approach to partnership and they demand adifferent typeof service. Furthermore, this entire chapter is set out todescribehowFMcompaniesdesireotherthingsthantraditionalcustomers;hence,alotof

aspectscouldbetakenintoconsiderationwhenapproachingFMfirmsasopposedtoothercustomers.

InadditiontothestrengtheningofrelationshipswithFMfirms,thereshouldalsobeaplanofhowtobuildrelationswiththeFMclients.Sincedirectcontactisverylimited, this is a challenging task. Asmentioned, improving relationships lies in

building trust and we believe that this could be achieved by, e.g., focusing onclearlycommunicatingtheworkperformed.

7.1.3ReportingandmeasuringmethodOne of the most important developments within FMconcernsstrategiesofhowtodemonstratethedeliveredvalue to customers. The challenge is to show how FM

firms could be linked to the business strategy and it ismost easily obtained by measuring methods. ThemeasuredvaluecanbehowqualityofFMservicesleads

to higher productivity, profitability and growth of the core business(Ernst&Young,2009b). In a surveymadebyErnst&Youngwithpersons in the

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FMbusiness,asmuchas89%saythattheymarkedlywillimprovemeasuringand

communication(Ernst&Young,2009a).InorderforFMfirmstobeabletodelivermeasuresofhighquality itbecomes important tohaveawell‐defined reportingprocess. Reporting concerns logging everything done for customers and being

abletogatherthedatainaninformativeway.HavingefficientIT‐systems,suchasmonitoringsystems,isonewayofmeetingthedemandsofreporting.

FMclientsalsodemandmoreefficientwaystofollowupservicesandnowadays

KPI13arecommonlyusedasameasuringmethod(Oresten,FMkonsulterna).KPIcould include everything from response times to price in relation to customersatisfaction, the latter being the most important according to Gyzander (ISS).

Whenever required levels of KPI are notmet by FM companies, it is also quitecommon to have penalty fines as part of the contract (Argurs and Lauseger,Pricegain). The reporting process is the most tangible way to demonstrate the

valueoftheservicesandbeinggoodatitcouldbethedifferenceofwinningthenext big contract over competitors. Not only is the amount of reportingincreasing, it isalsoofhigherqualitythanbefore,nowaimingtogivesupportto

thecoreactivitiesoftheclient’sfirm(Hernström,Eurest).

WiththesehighdemandsonFMfirms, it iseasytoconcludethattheyrequirea

high levelof reporting fromtheirserviceproviders.Tomeettheexpectationsoftheclients,FMfirmsneedtocooperatewithprovidersthatcanreachuptohighlevelsof reporting.Winling (IKAM,Crawford)states that reporting is thebiggest

issuewhenitcomestorequirementsfromFMfirms.Hecontinueswithdescribinghow a big elevator company lost their contract with an FM company due toreportingflaws.

“…beforeyouhadtowaituntil theendofthemonthtoprintoutaperformance report, now you can claim intelligent informationwhen you need it, this creates increased pressure on the serviceproviders”

HelenaOhlsson,boardmemberIFMAandEuroFM

Of course, a lot of work needs to be done to implement an efficient andstandardised reportingprocess.Thechallenge is tobe flexibleandopen tonew

ways of working and to communicate changes thoroughly in the organisation,from the top to thebottom. IT‐systems could create synergy effects and it alsofacilitatesthesupporttohavestandardisedreportingprocesses.

13KeyPerformanceIndex

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NicklasSmith(Dalkia)saysthatreportingisoneofthethingsthathebelievesall

providers could improve substantially. Crawford is not fully adapted to thereporting standards that FM requires, and it is one area where there isimprovement potential (Argurs and Lauseger, Pricegain). Today Crawfordworks

withalotofdifferentlocaladhocsolutionstotheproblems(Winling,Crawford).TimWebster(Crawford)meansthatmostdatarequiredforthereportingprocessis accessible today in a database, but Crawford has never had a demand of

providing it before. One challenge is to become good at data mining andtransformthedataintouseful informationinreports.Apositiveresultofagoodreporting process, apart from the necessity to fulfil the demands of FM

companies, is that it could be used to show FM clients and other traditionalcustomerssomeofthevaluebroughtbyCrawford.

7.1.4ResponsetimesandserviceprocessAsstatedaboveFMcompanieshavehighdemandswhenit comes to reporting, and one of the factors that aremeasured is the response time, whichmeans how fast

service personnel can be on the spot. The requirementof response times is included in the contract with FMcompaniesandtobethepreferredserviceprovider,thesetimesshouldmeetthe

requirementsandpreferablybeheld.For thesamemotive, theserviceproviderneedstomakesurethatthedemandsarereasonable.KurtWaltersson(Bravida)statesthatFMclientssometimeshaveunreasonablerequirementswhenitcomes

toresponsetimesthatareimpossibletokeep.Itisimportanttopayattentiontohowtheterm“responsetime”isdefinedinaparticularcontract.Thereisagreat

differencebetweenmeasuringfromwhensomeonestartsworkingonaproblemasopposedtowhentheproblem is solved.Becauseof lackofknowledgeaboutthe contracts, service providers normally do not notice until something goes

wrongandtheclient,accordingtothecontract,isentitledtocompensation.

“(talking about FM)...the big issues are, again, reporting andresponsetimes.”

ChristopherWinling,Crawford

Achallengeforserviceprovidersistohaveawell‐structuredserviceorganisationthatcanliveuptothesetrequirements.Itisalsoessentialtoknowthecontentofdifferent contracts so that the process can be optimised. More standardised

response times in the contractswould ease the optimisation of thework forceandtheserviceprocess.Crawfordhasawell‐developedserviceorganisationwith

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goodresponse times.However, the requirementof the response timesdiffersa

lot between contracts and the knowledge about thesedifferences is quite poorwithinCrawford.Therearemany timeswhenCrawfordactuallyover‐delivers tothe set requirements (Argurs and Lauseger, Pricegain). More standardised

contractscouldbeonewayof facilitating for thepersonnel therequirementsofresponsetimes.Itcouldeasethewaytooptimisingtheprocessandevenleadtobetter planned service routes. Better knowledge of the response times in the

contracts could as a minimum be used to show both FM companies andtraditional customers that Crawford in fact often is better than the setrequirements.

7.1.5GlobalorganisationWe have limited our master thesis to include theSwedish FM business, although international

comparisons lie within our scope. Even though theglobalisationtrendstretchesfaroutsidethebordersofSweden, it most certainly concerns the Swedish FM

businessandisthereforeessentialforthisproject.

This trend was set off by big global FM clients that desired global FMorganisationstotakecareoftheirnon‐coreactivities.OneexampleisShell,which

hasoutsourcedeverythingexcept its coreactivities to JohnsonControlsallovertheworld.

“Bigcompanieswanttobuyfromotherbigcompanies.”

BertilOresten,FMconsultants

ThebiggestFMcompaniesworkfromaveryglobalperspective,whilstothersarepresentonly intheNordics.JohnsonControls, forexample,strivestosignglobalcontractswithitsclientsaswellaswithitsproviders.JohnsonControlsalsoinvest

a lot in being present in the countrieswhere it does not exist today. The pointtheymakeisthatfewerprovidersmeanfewerandbiggercontracts,whichinturn,resultsinmorestandardisedandefficientprocesses.Decisionsarealsotakenona

centralised global level instead of decentralised decisions in each countryseparately (Pindstofte, Johnsson Controls). Ola Hernström (Eurest) means thatone of theminimum requirements of a service provider is that they arewidely

present.Whatever size of the FMfirm, there is a desire to sign contracts withserviceproviders thathave theability tocoverat least thegeographicalareaoftheFMfirm.

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Jens Rasmussen (Coor) contradicts the above to some extent by claiming that

servicealwaysneedtobeverylocallypresent,somethinghethinkswillaffecttheglobalisationtrendtogobackinthefuture.

Thewayweseeit,beingglobalisareallystrongresourceforCrawfordandabig

competitiveadvantagewhenitcomestobethepreferredserviceprovider.Onalong‐termbasis, itmightbe interestingtoexpandtheserviceorganisationtobeevenmoregloballypresenttokeepupwiththebiggestFMcompanies.Another

recommendationwouldbetosetupacentralisedgroup,insteadofdecentralisingeverythinganddealwithitlocally.Thisgroup,orperson,candealwiththeglobalrequirementsofFMcompaniesandcoordinateprocessesthatspansoverseveral

countries.

7.1.6GenericandstandardisedprocessesAnotherthingthatFMcompaniesdesireoftheirservice

providersaregenericprocesses, inotherwords, servicedelivery processes that are consistent and the sameonall geographical places. FM clients desire the same

qualityofservice inall theirbranchesandconsequentlyFM firms agree to a certain level of delivery that should be consistent in allcountries.Byextension,FMfirmsrequirethattheirserviceprovidersalsoshould

beabletodelivergenericserviceprocessesincitiesandcountriesthroughouttheorganisation(Winling,Crawford).

Itisabigchallengetocreatethesegenericprocessesbecauseofbigvariationsof

preconditionsindifferentcountries.Levelofcompetence,sizeofbranch,training,and available resources are just a few of the factors that could differ between

countriesandhencecomplicatethesetupofgenericprocesses.Anotherchallengeis to adapt the service organisation to local legislation and political differences(Ohlsson,IFMA).

“(talkingabouttheserviceprocessesinCrawford)…thedifferenceisgreat between countries and how far they have come in theirprocesses.”

JosvanderLinden,regionalKAMCrawford

Crawford’sserviceorganisationisstillinanearlystageanditisslowlytakingformthroughouttheorganisation.Forobviousreasons,theserviceorganisationandits

processes have not reached the same quality in all countries and are still notgeneric(Webster).

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Towin thebattleofbeing thepreferred serviceprovider, genericprocessesare

essential.Crawford is far aheadof competitorswhen it comes toglobal genericservice processes in their business segment. However, they still have a lot toimprove and it is important not to be comfortable but to keep developing and

improving. Van der Linden (Crawford)means that Crawford needs towork in amuchmoreuniformedwaythenitdoestoday.Earlieron,asuggestionwasmadeabout settingupacentralisedgrouporperson todealwithglobal requirement.

Thissamegroupcouldstartthechallengingtasktoalignserviceprocessesgloballywithinthecompany.

7.1.7InnovationprocessandbeingproactiveInnovationismostcertainlyabuzzwordthatismisusedonmany occasions. When we refer to innovation we meantheabilitytobeinthefrontedgeofabusinesssegmentby

coming up with new things that competitors do not do.Innovationmeansimplementingactionableandnewideasthatcreatesvalueanditcouldbeanythingfromaproducttoaserviceprocessto

abusinessmodel.

FM is a sector dominated primarily by service innovation and according toFMconsultant and expertMagnus Kuchler (Ernst&Young), innovation is one of

themost importantareastodealwithforFMcompanies.There isadesirefromFMclientswantingFMfirmstoimproveandinnovatethroughreengineeringandintroductionofnewtechnologies.Somepeopleclaimthatinnovationisbecoming

akeytothedifferentiationofplayersinthemarket(SarsharandPitt,2009).TimPindstofte (Johnson Controls) means that Johnson Controls has pressure from

clients of being innovative.He also states that JohnsonControls has a groupofpeopleinthecompanythatissolelyworkingwithinnovation.

In order to achieve these high set innovation standards, FM companies need

serviceprovidersthatcanworkwithinnovation.Accordingtoasurveyaddressedto people in the FMbusiness, 71% consider an innovative approachwhen theychoose a service provider (Goyal and Pitt, 2007). Several interviewees, like

OlaHernström(Eurest),statesthathiscompanyisencouragingserviceprovidersto come up with innovative ideas and proactive solutions. Bertil Oresten(FMkonsulterna)explainsthat,apartfromthemotiveofbeinginthefrontedge,

therearealsoincitementsofpossiblebonuseswhenbeinginnovatewhichcould,and should, bewritten into the contract. In otherwords, service providers cantakepartofthesavingsiftheyfindasolution.

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Crawfordisindeedaninnovativecompanyinmanyaspectswhenitcomestotheir

service organisation. To name a couple, Crawford has innovative tools that aredeveloped tomake energy savings and improvemonitoring. Being proactive insustainability and energy savings is very good as there is an increasing demand

from society concerning these questions. Not surprisingly, according toMarjanSarsharandMichaelPitt (2009),energysolutions thatcutcostsarewhatclientswant and remotemonitoring ismentioned as a potential technologywhich can

reduceoperationalcosts.

Of course there are things to improve, and according to Webster (Crawford)innovation is medium developed within Crawford. Although there are many

innovativepeopleinthecompany,thereisnoformalprocessofhowtoworkwithinnovation. It could be of interest to implement one such process, in order toactivelyworkonbeinginnovative.Innovationisunlikelytohappeninthelongrun

if it does not have a planned introduction and a company should never stopencouragingemployeestoinnovateandtoequipthemwiththeappropriatetoolsand environment to nurture creative ideas (Nazali, Noor and Pitt. 2009). One

suggestion to get an innovative process on track could be to cooperate with anearbyuniversitythatworkswithinnovation,suchasLTH14.

Beinginnovativeisoftenachievedbyworkingandthinkinginaproactivewaybutwhen itcomesto this,Crawfordstillhas things to learn.ThecompanyPricegainhas conducted interviews with FM companies, where the findings show that

several FM players would like Crawford to be more proactive. For example, inorder to prevent urgent breakdowns theywould like Crawford to keep track ofexactlywhichdoorsthatneedtobeservedandwhen.

7.1.8BroadenserviceactivitiesAswehaveexplainedearlier,FMcompaniesstrivetosignlong‐term contractswithboth customers andproviders.

Being able to work long‐term gives stability and beingable to work with fewer service providers is moreefficientandgives synergyeffects (Pindstofte, Johnsson

Controls).AccordingtoPatrickLindholm(Crawford),thereisanobvioustrendofFMfirms desiring fewer service providers that can take overmore things. As aconsequence,agoodwaytoraisetheperceivedvaluebyFMcompanieswouldbe

to include more in the service offer. For a service provider like Crawford, this

14LundsInstitutofTechnology

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could be done by broadening the technical range of services. We recommend

Crawfordtofocusonservicescloselyrelatedtoitspresentcorecompetence,liketheserviceofentrancedoorsortheserviceofescalatorsandelevators.ThefocusshouldbeonservicesthatareuniqueandhardtocopybecauseFMfirmsarenot

interestedtotakethesekindsofservicesin‐house.Withthesamereasoning,itisprobably wise to stay away from more simple services that easily could beperformedbyFMcompanies.

Aquestiontofurtherdevelopcouldbewhetherornottopartnerwithsomeone,to make acquisitions or to develop the competence in‐house. Although this isoutside what Crawford does today, some initiatives have already been made

withinthecompanyregardingthismatter.Forexample,anagreementhasbeensignedinSwedenwithanelevatorcompanytoworkforandwithCrawfordonalocallevel.ThesalescompanyinFinlandisapioneerwithinthisareainCrawford

astheyarecontinuouslytryingtoincludemoreintotheirserviceoffer.SometimesthishasendedupinasituationwhereCrawfordinturnhiresaspecialisedserviceprovidertodothejob(ErikssonandLindholm,Crawford).Wewouldrecommend

partnering with someone,much like the pilot case in Sweden. It would be thefastestwaytobroadentheserviceoffertowardsFMcompanies.Itwouldalsobe

theeasiestwaytogainknowledge,whichcouldbeinterestingforfutureplansofbroadeningtheownserviceoffer.WehavealsonoticedthatsomeofCrawford’sservice technicians have backgrounds in other service professions such as

escalatorsandelevatorsservice.

7.1.9SustainabilitystandardsAswehavestatedearlier,therelevanceofsustainable

solutions and environmental issues is increasing inmany industriesandhencealso in theFMmarket.AllcompaniesthatwanttobeproviderstoFMcompanies

willneedtoputsustainabilityhighontheagenda.

It isandwillbevital forproviders tohavecertificationsaddressingthese issues,suchasISO14001,whichisimplementedinmostofCrawford’sproductionplants.

GreenBuilding, P‐symbol and LEED are certificates aiming to approve qualityand/orenvironmentalissuesforbuildings.ItcouldbeinterestingforCrawfordtounderstand these certificates in order to be part of the solution towards

certification.Crawfordingeneralisworkingalotwithsustainability,whichcouldprove to be an important competitive advantage in order to be the preferredserviceprovider.

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7.1.10PartnershipwithFMcompaniesHelena Ohlsson, who is a board member of theinternational associations for professional facilities

managers,IFMAandEuroFM,statesthataunitedfronttowards end users is only achieved in a partnershipbetweenFMcompaniesandthesupplier.

However,itishardtosaywhetherornotpartnershipistherealityintoday’sFMindustryorifitjuststaysasadream.AllFMrepresentativeswehaveinterviewedtalkaboutlong‐termpartnershipassomethingtheywanttohave,withclientsas

wellaswithsuppliers.Forexample,Wennerholm(Sodexo)saysthatthestrongerthe bonds are with the providers, the better it is. Gyzander (ISS) takes it evenfurtherwhenhestatesthattheyseetheirprovidersastheirownpersonnel.Itis,

however,abitofaparadox;ononehandFMfirmswanttopartnerwithproviderstohelpthemunderstandandpleasetheneedsoftheclients,ontheotherhandthey normally do not want providers to be involved in the contact with their

clients. Pindstofte (Johnsson Controls) and Hernström (Eurest) both claim thattheir companies strive to move from customer‐supplier relationships topartnership.Incontradiction,theybothstatethattheyarenot“married”totheir

suppliers,whichmakesithardtointerprettowhatextenttheyactuallyseetheirservice providers as partners. We also know for sure that FM companies ingeneralaregoodatbenchmarkingandatlookingovertheircontractsperiodically

inordertofindthemostprofitabledeal.

“TheFMdreamis to strive forwin­winsituationsandhaveapurepartnershipwithsuppliers.”

MagnusKuchler,Ernst&Young

AttheIFMAconferenceinStockholm,KurtWaltersson(Bravida)talkedabouthisview of partnership today in the FM industry. Waltersson returned to the

FMbusiness after six years in other industries and he is of the opinion thatrelationships between FM companies and suppliers are getting worse and aremoving away from partnership. He believes that the development of the

FMindustry goes in the same direction as it did in the construction industry,wheremistrust and penalty fees, as a part of the profit strategy now are verycommon.

Whateverwaythereality is, itstandscleartotheauthorsthatserviceprovidersneed to see FM firms as partners. Partnering advocates quality improvement,interaction between the parties, long‐term benefits and disputes are less likely

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comparedtotraditionalcontracting(AtkinandBrooks,2009f).Byhavingthisview

andapproach,serviceprovidersincreasethechancesofbeingthemasteroftheirowndestinyby taking theopportunity to get closer to FMcompanies,which inturnincreasesthechancesofbeingthepreferredservice.

ThemainchallengeistobeseenandshowthateffortsaremadetoaddvaluetotheFMcompanyor theenduser. Inacustomer‐supplier relationshipallburdenandrisklieoneachfirmseparately.Inapartnership,ontheotherhand,risksand

benefitsshouldfallontwopartiesandnotjustone.ShowingFMcompaniesthatCrawford is willing to take own initiatives and risks could be one way ofstrengthening thebondswithFMcompanies (Rasmussen,Coor). Forexample,a

partnering arrangement could include something called gain‐sharing, which iswhencostsavings,derivingfromperformanceimprovement,aresharedbetweenthe parties (Atkin and Brooks. 2009f). However, it should not be forgotten that

servicesofferedbyCrawford,aswellasmanyotherserviceproviders,standforasmallpartofthetotalservicethatofferformanyFMfirms.BoththeFMfirmandtheserviceproviderneed tobe interested inpartnering inorder for it tooccur.

AccordingtoAtkinandBrooks(2009),thelevelofopennesstopartneringwithaserviceprovidermainlydependsontwofactors;thedegreeoftheirintegrationin

the own business and the economic significance of the service provider.Nevertheless, Crawfordbeing theparty to take the first initiativedoes certainlyincreasethechancesofpartneringandlong‐termbenefits.

7.2TwoBusinessModelsinSynergy

One of our main goals in this master thesis is to clarify how FM companiesoperate and, based on these findings, give recommendations to how Crawford

shouldapproachFMcompanies.OurfindingshaveshownusthatCrawfordneedsto think and act differently towards FM customers as opposed to traditional

customer, something thatwehavediscussed in this chapterand summarised intheFMBusinessModel.SincetherenowexisttwobusinessmodelsforCrawford–onetowardstraditionalcustomersandonetowardsFMcompanies–thereneed

to be coherence between the two. Even though it is not within our scope todiscuss the business model towards traditional customers within Crawford, wewouldliketogiveourthoughtsonhowthetwomodelscouldinteractandcoexist

withinthecompany,whichisillustratedinfigure17below.

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Figure17.ThefunctionofparallelbusinessmodelsinCrawford.

WebelievethattwocoexistingbusinessmodelswithinCrawfordisthebestwayto achieve satisfaction from FMclients as well as other customers. The two

modelscouldoverlapandtheydonotexcludeeachother.Still,thereneedstobea consciousness within Crawford to distinguish FMfirms from other customersand,asaresult,alsotodistinguishthestrategyapproachestothedifferenttypes

of players. If Crawford gains this mindset and manages to separate the twostrategies, we believe long‐term success with both types of players will be theoutcome.Weareawareofthefactthatwearegivingasimplifiedandtheoretic

pictureoftoday’sreality,butwealsofeelitisnecessarytodosoinordertoclarifyand simplify the big issues implied with the challenge of approachingFMcompaniescomparedtoregularcustomers.

TheactualexistingbusinessmodelinCrawfordtodayliesclosetothetraditionalcustomer business model but since Crawford is already working withFMcompanies,italsohaselementsoftheFMbusinessmodel.Distinguishingthe

FMbusinessmodelfromtheregularcustomerbusinessmodelwillhelpnotonlytohaveanewstrategytowardsFMfirms,buttohaveaclearerstrategytowardstraditionalcustomers.

In many occasions, we believe that new competences learnt in one businessmodelcouldalsomeanasignificantpositiveeffectintheother.Forexample,alotofimprovementswillbemadeifCrawforddecidestoimplementfactorsthatare

key activities or key resources in a business model well suited for FMfirms.

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Althoughnewcompetencesinoneactivityorresourcemightnotbeakeyfactor

for the traditional customer business model, there will most likely be positivethingsthatcanbelearntandapplied.Forexample,ifstandardsforsustainabilityareimplementedasawaytoapproachFMplayers,itiscertainlyapositivething

forothercustomersaswell.Theotherwayaround,theknowledgegainedinthecloserelationshipswiththetraditionalcustomerscouldbenefittheFMclientsaswell.

Figure18.BalancebetweenthecoexistingbusinessmodelsinCrawford.

Today,FMcompaniesstandforasmallpercentageofthetotalserviceturnoverin

Crawford, and itmight sound illogical to have an own businessmodel strategytowardsFM.Weareconsciousaboutthis,anditmighttakealongtimetochangethisimbalance,butwebelievethatthestronggrowthintheFMmarketwilllead

toanincreaseoftheir influenceuponCrawford,andtheFMbusinesswillslowlybecomeabiggerpartofthetotalserviceofferwithinCrawford.Therefore,itwillbeevenmorevitaltobepreparedandhaveawell‐definedstrategytowardsFM.

Balance between the two businessmodels facilitates synergy effects. Figure 18illustrateshowthetraditionalcustomersidetodayoutweighstheFMclientside.

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8FutureFMactionsConcerningCrawford

In this chapter, the authors describe and reason around possible scenarios,whichcanaffectCrawfordinthefuture.Thescenariosaremainlyidentifiedwithfocus on FM actions that could threat the Crawford in the service providerposition.

During the time period of our thesiswe have identified five possible scenarios,

which all, to some extent, could be a future threat to Crawford. Four of thesescenarios deal with direct actions taken by FMcompanies, which is the reasonwhyweputemphasisonthese.Thesescenariosare:FMcompaniesswitchservice

provider, FMcompanies take more activities in‐house, FMcompanies cut pricesandFMcompaniesenterCrawford’sstrongcustomers.Ineachparagraph,wewilldescribethescenariosonebyoneandevaluatetherisksthatcomewiththem.

The fifth scenariohas todowithanFMcompany loosing their contractwithanFMclient,whichalsocouldhaveaffectsonCrawford.Becauseitisnotwithinourscope to research factors thatmakeend customers choose to cooperateornot

withanFMcompany,wefeelthatwedonotpossessallknowledgenecessarytofairlyjudgethisscenarioandwewillonlybrieflyspeakaboutitinouranalysis.

Allourreasoninginthischapterisbasedonourearlierrecommendations;thatwe

believecooperatingwithFMcompaniesisthebestwaytofuturesuccess.

8.1FMcompaniesswitchserviceprovider

As we have said, FMfirms have a comprehensive purchasingfunctionwheretheybenchmarkandrevaluatetheircontracts.This means that Crawford and other service providers could

neverbetotallysafeandapotentialthreatcouldbethattheyareswitchedforanotherserviceprovider.

CrawfordisamarketleaderinEuropewhenitcomestotheirserviceorganisation

and the company already has established contracts with most of the biggestFMcompanies.Forexample,Crawfordhasabout80%ofthetotaldoorserviceofDalkia inSweden(ErikssonandLindholm,Crawford).AlthoughCrawfordoften is

the preferred service provider, as in this case, they are not the only one. EventhoughCrawfordsometimes feels like theonlybigplayer, thepointhere is that

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there are other existing competitors out there to watch out for and there is a

potential riskthatsomecompanywillappearasarealchallengerforCrawford’sservice organisation. If Crawford’s current competitors were to expand theirserviceorganisationtheycouldbeapotentialthreat.Otherpossiblecompetitors

arecompanies inclosely relatedbusinesses, likeelevators,whichcouldbroadentheirofferandlearnhowtoservicedoors.

ThebiggestriskforCrawford,asweseeit,isthattheywillbeoutrivaledbecause

of their relatively high price. Price is important for FMcompanies and it mightmake the difference when choosing between service providers. On the otherhand, price is just one ofmany criteria for FMcompanies and Crawford brings

valueinmanyotherways.

If Crawfordwas to be replaced for another service provider it could have a bigimpact, depending on to what degree they will be replaced. There is a chance

that, even if Crawford no longer will be the preferred service provider for thefuture,theycouldstillkeepsomeoftheoldcontractsandhencekeepquitealotof thebusiness. The impactdoesnotnecessarily need tobebig if Crawford for

somereasonlosesbusinesswithaspecificclientbutnotfromtheFMcompanyingeneral.ShouldtheyontheotherhandlosethecontracttotallywiththeFMfirm,

theywouldobviouslylosealotofbusiness.Forthisreasonitisalsoimportanttowork with several FMcompanies so that the risk could be spread out amongthem.

8.2FMcompaniestakemoreactivitiesin­house

OnepossiblefuturethreattoCrawfordcouldbeFMcompaniesthatwill take inmoreserviceundertheirownroof. In theory,

thiscouldmeanthatFMcompaniesthemselveswilldoall,orapartof,theservicethatCrawforddoestoday.

WhyhaveFMcompanies thatexist todaynotalreadymadeamove and tried to take over the service that is done by Crawford?One reasoncould be that the FMindustry is still not matured and there are still many

opportunitiestoexploit,henceleavingsomethingsat lowerpriority.Webelievethattakingactivities in‐housewillbeanaturalstepforFMfirmsaftertheyhavetriedtocutcoststothelowestpossiblelevel.FMfirmscouldreachalevelwhere

it is hard to lower costs by pushing suppliers to cut prices. One way to lowerpriceswouldthenbetoownmoreofthevaluechainandtherebycuttingoffanymiddlemen.AparallelcouldbedrawntotheSwedishfoodretailindustry;several

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of thebigcompanies in thebusinessdrewdown thepricesof their suppliers to

thepointwhere itwasno longerpossible tocutpriceseven further.What theydidwastoverticallyintegratetheformersupplierfunctionintotheowncompanybycreatingtheirownbrandsandthatwaypricescouldbeloweredduetothelack

ofmiddlemen(Larsén,Centigo).Whatwearesaying is that,at longhorizon,wesee a risk that FMcompaniesmight really consider taking over the service thatCrawfordisdoingtoday.

Several of our interviewees have actually addressed that their FMcompaniesalready strive to do all the service themselves whenever it is possible. SinceFMcompaniesnormallyhavepersonnelonthesitesoftheirclients,theidealisto

let these people do everything that they are competent of doing, which couldinclude the current service conducted by Crawford. Still, the majority of thepeople we interviewed said that Crawford probably does not need to worry

because of their specialised and niche business. The point they made is thatCrawford is in a business with a lot of technical skills that could not easily becopied.Webelievethatistrue,buttoacertainextent.Becauseofmanyreasons,

such as a unique set of spare parts and high competence of Crawford’s servicetechnicians,somepartsofCrawford’sserviceofferisindeedveryhardtocopy.All

urgent matters and other complicated breakdowns are examples of where webelieveCrawfordalwayswillbeneeded.Theotherpart,however,mightnotbequitesodifficulttocopy.Preventivemaintenancethatincludesoiling,replacinga

wireorchangingothercommonpartsarenotallthathardtolearn.Serviceslikethese are in the risk zone and they could most definitely be included in whatFMfirms do on their own. For example, FM companies could educate a small

teamofspecialised technicians thatcoulddooilingandothersimplepreventivemaintenance in a specific geographical area. Such an organisation could beprofitable for a big FM company in a limited geographical area with a high

concentrationofclientssuchasStockholm,GöteborgorMalmö.

Nonetheless,CrawfordstillstandsforasmallpartofthetotalserviceofferofanFM company. Thismight indicate that Crawford’s issue is low prioritisedwithin

FMcompaniesandthatthereismoremoneytobemadeinotherareas.Also,itisabarrierforFMfirmsthatyouneedtohavespecialeducationinordertoperformservicesmadebyCrawford.Still,afteraboutthreeweeksofeducation,aperson

has received the basic training to do all the service that Crawford does today.

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Since this preventive maintenance is a quite big part of the total service offer

(Servicetechnician,Crawford),weseethisissueasabigchallengetodealwithforCrawford. To judge more precisely what impact this would have, it would beinteresting for Crawford to further research the profit equivalence to this

preventivemaintenanceinrelationtothetotalserviceoffer.

8.3FMcompaniescutprices

As we know by now the FM industry is still in its expansionphase in Sweden. We have mentioned that purchasingdepartments are getting more knowledgeable of the FM

servicesthattheyarebuying.Webelievethatthisfacttogetherwith a more mature market with tightened competition will

keep pushing prices on FM services down. In turn, this will put pressure on

FMcompaniestofindnewwaysofcuttingcostsandoneofthesewayswillbetolookoverthecostsofserviceproviders.ThiscouldaffectCrawford intwoways;eitherbyhavingtocutcostsandremainonthesameservicelevelorbyhavingto

cut costs to theexpenseofa lower service. Even thoughbothwouldmean lessrevenue,thelaterdoesnotnecessarilyhavetomeanlessprofit.Itisalsowhatwebelieve to be amoreprobably scenario in the future. This is already the reality

todayinSweden,whereoneexampleisanFMcompanythatisstrivingtolowerCrawford’sservicecoststotheclientbutontheexpenseofalowerservicelevel.FMcompaniesdohavehighrequirementsbutonealsoneedtobearinmindthat

theydonotwanttoputCrawfordoranyotherserviceprovideroutofbusiness,since both parties are after all cooperating together to create value for theFMclient. Inotherwords,these lowerpricestoFMclientsdonothavetomean

lessprofit,itwouldjustmeanthatCrawfordwouldneedtodoserviceinanothertypeofway.

TheFMcompaniesthatCrawfordcooperateswithtodayalreadystandforsomeofthelargestrevenuestreamsandthesecompanieswillmostlikelygrowwithinthenextcoupleofyears.Becauseofthebigpotentialthereisincooperatingwith

FM companies, it could be easy to accept a lower price than to traditionalcustomers.AsFMcompaniescontinuetogrowandthedependenceofthemgetsbigger, itwill be even harder to turn down a contract even though the price is

lowered.

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8.4FMcompaniesenterCrawford’sstrongcustomers

We see a potential future risk that FMfirms will try to“squeezein” as a middleman between Crawford and their

traditional customers, and more specifically their strongcustomers.WebelieveFMcompaniesmightwanttocooperatewiththeirserviceproviderstobeabletoworkwithnewclients,

ortoexpandtheoffertoexistingclients.

Why,then,haveFMcompaniesnotalreadybeguntodoso?Well,theyhave,butstillonaverysmallscale.Forexample,oneoftheKAM’sinCrawfordSwedenhas

received a request from an FM company to present them and give them anopportunitytoenterCrawford’scustomer.Theyhaveseenanewopportunityofgaining business by entering Crawford’s traditional customers. Since the

FMcompany provides Crawford with new business, they believe it is fair if itworkstheotherwayaroundaswell.AninterestingpointhereisthatthisspecificFMcompanyisonethathasnotexpandedasmuchastherestoftheFMplayers

inSweden.Onepossibleriskisthatthesamedevelopmentwilloccurfortherestof the FM companies. As long as business flourish it might not be likely but ifbusinesswillslowdowninthefuturethiscouldbeonewayforFMfirmstofind

new clients and gain new business. Obviously, when this happens, Crawford isfacedwithadilemmawheretheyneedtoweightheriskofloosingprofitduetoamiddleman,asopposedtostrengtheningbondswiththeFMcompanywhichcan

generate more business in the future. However, depending on the contractCrawfordhaswithaspecificFMfirm,thelossinprofitmightnotbethatbigwithFMasamiddleman. Itwouldbe interesting forCrawfordto furtherresearchon

thisdifferencetoseewhatkindofmoneywearetalkingabout.

“IfFMdecidestoenterourcoresegmentstheycould,onceagain,beastrongcompetitor…ImustsaythatIcannotseeanybarriersthatcouldstopthemfromdoingit.”

ChristopherWinling,GlobalIKAMCrawford

AmongCrawford’stop30traditionalcustomers,themajorityofthemarealreadyusing services from FM companies. In other words, Crawford and theFMcompanyhavetheirowncontractsidebysidewiththesamecustomer.Once

again, the risk is that the FM firm would want to include Crawford in theircontractinthefutureandsincetheyalreadyarepresentwithmanyclients,itisasmallstepforthemtobringCrawfordinunderthetotalFMserviceoffer.Afterall,

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ourimpressionfrominterviewsisthatonepronouncedstrategyofFMcompanies

is to expand and grow with their existing customers. It should however bementionedthatjustbecausetheFMfirmwouldliketobroadenitsserviceoffer,itdoesnotmeanthattheFMclientwouldliketodoso.

Thebiggest issuewiththisthreat,asweseeit, isthatCrawfordwouldslipawayfrom the current strategy of building strong long‐term relationship withcustomers.ThiswouldnolongerbepossiblewithFMinthemiddle,astheywould

takeoverthebusinesscontactwiththecustomer.

Ouraimistogiveaneye‐openerandanawarenessofhowthesituationistoday,butdespiteallthiswebelievethatCrawfordhasagoodchanceofkeepingtheir

relationship with many of today’s strong customers. After all, it is the endcustomer that decides whether or not they would want a direct contact withCrawford or if they find it more convenient to make them a part of a total

FMservice offer. Therefore, the fact that Crawford has been building strongrelationshipswith customers could show to be a really importantmove for thefuture.Apartfromstrongbondsbeingimportanttokeepthecontract,thereare

twotypesofcompaniesthatwouldwantdirectcontactwithCrawford;theoneswhereCrawford’sproductsarefunctioncriticalorwherethevolumeisextensive.

Thisis,ofcourse,thetypeofcompaniestowhomCrawfordisdirectingtheeffortoftheKAMorganisationanditisimportanttokeepdoingsointhefuture.

ItishardtojudgetowhatextentCrawfordwouldbeaffected,shouldthisoccur.

One obvious effect is that Crawford would get much more dependent ofFMcompanies. Once again, it should be mentioned that FM firms are a muchsmallerpartthanCrawford’straditionalcustomersandweareawareofthefact

thatwearediscussingonalongtimehorizon.

8.5FMcompanylosesbusinesswithclient

Aswementioned in the introductionof the chapter there is onemorepossiblefuturescenariothatshouldbeaddressedandithastodowiththeconsequencesof when an FMcompany lose their business with one of their clients. If this

happens, Crawford could also lose their business because they go out togetherwiththeFMfirm.However,itdoesnothavetobetrue.IftheformerFMclientispleasedwith the services performed by Crawford it is quite common that they

want to keep a certain service provider, or, if a new FM company enters theycould tell them that they want to keep Crawford’s services. Also, if CrawfordalreadyhasaframecontractwiththenewFMcompanytheywouldstillstayasa

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service provider as long as the client does not have any objections. The big

challenge forCrawford is,despite the fact thatalmostall contact inCrawford ismadedirectlywiththeFMcompany,togettheFMclienttorecognisetheamountofvaluethatCrawfordbrings.

The impact of this scenario happening should not have to be very big forCrawford.SincetheydoserviceonseveraloftheFMfirm’sclients, losingoneofthemisprobablynotthatbadunless it isareallybigFMclient.Thenagain, just

because theFMcompany loses theirbusiness it doesnotnecessarilymean thatCrawfordalsowillgowiththem.

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9MinimisingRisksofFutureFMactions

ThefirstpartofthischaptershowsariskanalysisoftheidentifiedFMactionsinthelastchapter.Itisalsostatedwhichassumptionsthatweremadefortheriskanalysis to be valid. After this each scenario is discussed in turn and specificrecommendationsareprovided.

9.1ImpactandLikelihoodofFMactions

The four identified threats in chapter 8 would have different impacts onCrawford’sbusiness.Theyhavealsodifferentprobabilities toactuallyoccur.We

have ranked the four threats after these two factors in the Impact/Likelihoodmodel below. The ranking is based on our own analysis of the identified FMtrendsandtheinterviewmaterial.

Figure19.RiskanalysisintheImpact/Likelihoodmodel.

Unexpectedly,whatwefoundfromouranalysiswasalinearrelationshipbetweentheimpactandthelikelihoodofthescenarios.Itisimportanttohaveinmindthatthereisnoabsoluterelationbetweenthestepsinthescales,butjustaninternal

relative relation between the identified threats. In other words, a four on thex‐axisdoesnotmeanthat it is100%certain itwilloccur,but justthat it ismore

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likelytohappenthantheotherthree.Themodel isbasicallyshowingthatthese

threatsareallinterestingtolookfurtherintobecauseiftheprobabilitytooccurislow,theimpactishighandviceversa.

9.1.1TimehorizonThereisnotimeaspectincludedintheRiskAnalysismodelabovebutinsteadthisis discussed here. It is very hard to set an exact time forwhen scenarios couldbecomereality.Thereareexamplesofsituationswhenmostofthemalreadyhave

occurredbutnottothepointthatithadanymajorimpactonCrawford’sservicebusiness.AswehavestatedearlierCrawfordhasagreatopportunitytogrowwiththeFMcompanies.ThiswouldalsomeanthattheFMsideofthebusinesswould

becomemoreimportantandCrawfordwouldbecomemoredependentonit. Inturn thiswould increase the impact of the threats. So both the impact and thelikelihoodwill becomegreaterover time if nothing is done toprevent it. In the

nextpartbelowweaddress theassumptionswehavemade inour ranking.Thethreats we have addressed are of strategic character and are therefore quitedistantintime,buttheywill,asexplained,becomemoresignificant.Itisnotatall

unlikelyforCrawfordtosurvivetenorfifteenyearswithoutaddressingthembutit will definitely have consequences. Even though it is not possible to set thescenarios in an absolute order in time we could expect the FMcompanies to

follow“thelineofleastresistance”intheirgrowthstrategy.Thiswouldmeanthattheywould firstgrowthroughgainingnewclientsandbroadening theiroffer totheir existing clients, then pressure the prices from their service providers and

finally try to do more of their service providers’ activities with their ownpersonnel.

9.1.2AssumptionsForourreasoningoftherankingtobevalidtherearesomeassumptionsthathavetobeexplained.

We have ranked the situation where an FMcompany switches Crawford for

anotherserviceprovidertobeofhigh impactand lowprobability.The impact ishigh because then all the business in question is lost to one or severalcompetitors.ThechanceforCrawfordtowinbackthecontract isnottaken into

considerationbecauseweseeitasafailuretoloseitinthefirstplace.Thegoalswith our recommendations are for Crawford to be proactive, not reactive. The

probability is low provided that Crawford continues and expands the efforts tobecomethepreferredserviceprovider.

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ThenextscenarioisthattheFMcompaniesdomoreofCrawford’scurrentservice

work with their own personnel. If this would be true Crawford would lose the“cashcow”oftheservicebusiness,therecurrent,relativelyeasyserviceworkthatis quite easy to plan and optimise. This would have a fairly big impact on the

business but therewould still be repair and call business left for Crawford. Theprobability for this to happen is low, not because FMcompanies are notinterestedbutsinceitisrelativelyeasytoprevent.

FMcompaniesalwaystrytolowerpriceseventhoughtheyarewellawareoftheconceptofvalue formoney. It is very likely that this trendwill continueandbeevenmoreevidentwhentheFMoutsourcingbusinessgoes intoamoremature

phase.ThisscenariohaslowerimpactonCrawford’sbusinessthantheothertwopresentedabove.ThereisnowishfromFMcompaniestopressureCrawfordtoapointwheretheywouldbecomeunprofitablebutforsuretoapointwherethey

areforcedtoworkmoreefficient.

We have judged that the scenario of FMcompanies entering segments whereCrawfordhastheirstrategicallyselectedcustomerstobethemost likely,mainly

because it has alreadybegun. Eventually the FMcompanies’ offer could includeeventheserviceof industrialdoorsastheirobjective is tobroadentheirservice

activities with their clients. The impact on Crawford’s service business of thisscenarioisstillquitelow,iftheprocessesofworkingefficientlywithFMfirmsareinplace.

9.2Crawford’sResponsetoFutureFMactions

Below follow our recommendations concerning the scenarios described inchapter8.Specific recommendationsaregiven toeachscenario in the following

order;FMcompanies switch serviceprovider, FMcompanies takemoreactivitiesin‐house, FMcompanies cut prices and FMcompanies enter Crawford’s strong

customers. In the end of the chapter the recommendations are summarised infigure20.

9.2.1FMcompaniesswitchserviceproviderOuroverallrecommendationtonotbeswitchedbyanotherserviceprovideristo

fulfilthefactorsfromchapter7wherewediscusswhatCrawfordshoulddotobethe preferred service provider. The fact that Crawford has a global and

widespread organisation with high quality services, fast response times and aneffectiveprocess for the sparepart collectionare someof the things thatoften

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make Crawford the preferred service provider today. Crawford should keep

workingontheseabilitiesandtrytodeveloptheotherfactorstobethepreferredservice provider. Cost, current knowledge, complexity and to what degree thefactor isdevelopedinCrawfordareallexamplesofthingsthatneedtobetaken

into consideration to be able to prioritise which of the factors that are mostrelevant tostartworkingwith.Still, ifweweretoprioritise fromtheknowledgewe have gained during this journey we believe that a good reporting process,

proactive & innovation thinking, response times & new service processes andbuildingrelationshiparethetopfourfactorsCrawfordshouldfocusoninordertomakeFMcompaniesnottoswitchthemasaserviceprovider.

A good and standardised reporting process is of high priority among FMfirms.There are FMcompanies that have expressed their discontent with Crawford’sreporting process and we believe that this matter is quite urgent. A reporting

processisalsothemosttangiblewayofshowingthevalueoffered.

Whenitcomestobeingproactiveandinnovative,again,therearesomeFMfirmsthathavedesiredahigherabilityinCrawfordofbeingproactive.Webelievethat

being innovative and coming up with ideas is something that could be reallyappreciatedamongFMfirms.Itisalsoanimportantsteptomovetherelationship

with FMcompanies towards partnership and aswell away to get closer to theFMclientbyparticipatinginmorestrategicdiscussions.

Crawford’s response times are good, if not to say excellent. It is actually

sometimes too good and Crawford often performs over the required limit.WebelievethatamoreoptimisedandstandardisedserviceprocesscouldturnouttobeveryprofitableforCrawford.

We believe that building relationship is always important, and especially forCrawfordsincelong‐termrelationshipsisapronouncedstrategy.Whatwemeanhere is that the KAM organisation should realise how different players the

FMcompanies are and try to learnhow theywork andwhat theydesire and ingeneraltreatthemfromanFMAM15pointofview.

ThisyearCrawfordactuallylostbusinesswithoneFMclient,andwewouldliketo

highlight that it probably saysmore than the loss of business itself. It says thatCrawforddoesnotofferhigher value formoney than their competitors,or thattheyarenotabletocommunicateandshowthevalueoffered,whichagainshows

to be important. It is central that whenever Crawford does get switched for

15FMAccountManager,describedin7.1.2

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another service provider the situation should be analysed thoroughly so that

importantlessonscanbemade.

9.2.2FMcompaniestakemoreactivitiesin­houseIn order to prevent FMfirms from taking Crawford’s current services in‐house,

Crawford needs to be aware of the fact that there is a significant part of theirserviceofferthatactuallyisreproduciblebyFMcompanies.Gainingthatmindsetwill facilitate to formastrategyofhowtoapproachthesituationwhen itmight

occur.Theabovementionedisourmaincontributiononthisscenarioandduetolackofinformationwehavejudgedtogivenosinglerecommendation,butoptedtoproposethreedifferentsuggestionsofactions.

One suggestion is for Crawford to always sell the service offer as a completeservicepackage.Inotherwords,inorderforanFMcompanytoreceivethecriticalservice16 fromCrawford, they also need to buy the simple service17.We seeno

risk that an FMfirm will be able to reproduce everything that Crawford doestoday,with all technical knowledge thatwould imply. Therefore, FMcompaniesmightnotevenconsidertakenanything in‐houseas longastheyseeCrawford’s

serviceasacompleteservicepackage.

Amorelong‐termsuggestionwouldbetobroadentheCrawfordserviceoffertoincludeotherservices.InthebookTotalFacilitiesManagement,itcanberedthat

themaintenanceofelevatorsisanobviousexampleofwhenthereisnochoiceofchoosing between many providers because of the complexity and legislation(Atkin and Brooks. 2009g). Broadening the offer to include the service of

elevators,eventhoughitmightmeanpartneringinsteadoftakenthecompetencein‐house,couldimplythatFMcompaniesgetthewholespecialisedCrawfordoffer

includingallthedoorservice.

Another suggestion would be to actually embrace the situation instead ofpreventing it andeducate the techniciansof theFMcompaniesand teach them

how to do all simple services whilst breakdowns and similar would still be inCrawford’sdomain.MaybethatcouldbeprofitableforCrawfordifgoodcontractsarewritten. This businessmodelwould cannibalise on the service business and

naturally,alotofinvestigationandcalculatinghastobemadeinordertomakeafairjudgementofsuchastrategy.

16Callserviceincludingadvancedandurgentrepairs.17Preventivemaintenance,oilingandreplacementofwornoutparts.

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9.2.3FMcompaniescutpricesOurrecommendationinordertopreventandavoidtheriskofprice‐cuttingisthatCrawford needs to: be able to communicate and show the extra value the

companybrings,haveamorestandardisedserviceoffertoFMcompaniesinordertooptimise the serviceprocess, know theprofitabilityofdifferent customers toeliminate the risk of unprofitable contracts, re‐negotiate unprofitable contracts

eventhoughtheriskmightbetolosethemandfinallycooperatewithseveralFMcompaniestominimiserisks.

Crawford’sbusinessmodelandprocessesarenotdesignedforlowpricesandthe

companyhasnotraditionorculturetocompeteonlywithprice.ThereisalwaysariskthatanFMcompanywilldemand lowerpricesand ifCrawfordcannotdo it,theymight change service provider. There is a recent examplewhere Crawford

lost the contract just because theywere slightlymore expensive on the hourlyratethanthecompetitor.EithertheFMcompanyonly lookedat thehourlyrateprice when deciding or Crawford failed to show the extra value they bring

comparedtotheircompetitor(Webster,Crawford).Insum,Crawfordneedstobeabletoshowvalueinotherwaysthanjustbyprice.Wedonothaveanymagicalrecipesofhowtodothatbuttherearesurelymanyways,thereportingprocess

beingthemosttangiblewaytodemonstratethevalueoftheservices.WebelievethatCrawford’sfirststepistoidentifywhattheirvalueofferreallyisandthenthenext step is to become experts in communicating it, either orally or through

measurablemetrics.

Even though Crawford will not compete with price, we recommend that the

serviceprocess towards FMcompanies shouldbe slightly different compared tothe process towards other customers. Of course this depends on the differentservicecontracts,but ingeneralFMfirmsdemandamorecustomisedserviceas

therearemanydifferentFMclientswithdependingdemands.FMcompaniesdonottodaytakethepre‐packaged“keycustomerserviceagreements”18,buttailortheirrequirementsdependingontheirclients’demands,somethingthatcouldbe

costlyforCrawford.ChangingthismeansthatCrawfordwouldneedtodoserviceinanothertypeofway,whichwebelievehastobemorestandardisedandbasedonvolume.Forexample,Crawfordcoulddevelopastandardisedserviceofferto

allFMcompanies,whichcouldfacilitateforCrawfordtomaketheserviceprocessmore efficient and raise the margin. This standardised offer could be whatFMcompaniesgetiftheywantalowprice;then,iftheywantanyadaptationsor

18ByCrawfordpredeterminedserviceagreementsbasedonequipmentutilisation.

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customisations, the pricewill be a different question. This standardised service

shouldnotbepresentedasapackagedealbutasaspecialofferwithlowprice.

If FMcompanieswould cut prices and Crawford agrees on doing so to save animportant relationship, the impact could be big. If not careful, the specific

FMcompany could turn unprofitable for Crawford when including all overheadcosts, like administration and reporting. To avoid wrong decisions, Crawfordneedstobefullyawareoftheircostandincomestructuretoneveradmitaprice

that infact istoo low, justbecausethevolumeisbig.Theyneedtoknowwhichcustomersareprofitableandhowmuch,inordertoneveracceptacontractthatcouldendupunprofitable.

Furthermore,whenagreedonaprice,itisveryhardtochangeitandthereforeitbecomesvitaltodorightfromthebeginning.Tonotbecometoodependentandto have a better negotiation position, Crawford should keep cooperating with

several FMcompanies to spread the risks. If Crawford is unsatisfied with acontract, an idea could be to put the contract at risk and re‐negotiate it nowbefore the involvement and dependence get to high. It is also important for

Crawfordtohavegoodnegotiatorsofthecontracts.

Finallywewant tomentionthatCrawfordshouldnothavetobe facedwith the

positionofbeingtotallydependentonanyothercompany.BecauseofCrawford’swidecustomerbase,nosinglecustomerstandsformorethanacouplepercentofthe total turnover. By extension, Crawford should never be put in a position

where they feel obliged to take a contract just because the customer is soimportant.Surely, tonotgiveawayeasilycouldmean losing thecontract,but itcouldalsomeanamoreprofitabledealintheend.

9.2.4FMcompaniesenterCrawford’sstrongcustomersThere are many possible alternatives of how to address the threat of thisscenario.Wewould give the recommendation to allow FMcompanies to enter

Crawford’s customers, and tobepreparedwithaplan soCrawfordgets a gooddeal out of it. Thewaywe see it, this is the best alternative in the long run. IfCrawford wants to strengthen bonds with FMcompanies and see them as

partners, as we think they should, being open toFMcompanies is one way ofdoingthat.

IstherenotariskthatFMcompanieswillonlytakeadvantageofCrawford?Well,

yesandno.Noonecandeny that it couldbea risk,although it isveryunlikely.Again,FMcompaniesdonotwanttoputtheirserviceprovidersoutofbusiness.

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Incontrary,theyareoftenseekinglong‐termsuppliers,andbybuildingtrustand

strengthen relationship, chances increase of creating some kind of partnership.Furthermore, even though the FMcompany would be a middleman, workingtogetherwouldstillmeanthatCrawfordcouldkeepthebusinesswiththeclient.

AmuchworsealternativewouldbeifCrawfordkindlydeclinestocooperate,firstof all because negative signals are sent to the FMcompany. Then, if theFMcompany somehowmanages to enter the client anyhow, it is no longer the

meritofCrawfordandhencetherelationshipcouldhavebeenweakenedinvainandnegotiationpowerfromCrawford’ssideismuchless.Anevenworseoutcomeis that another FMcompany manages to enter the client together with a new

serviceproviderandhenceleavingCrawfordwithoutanybusinessatall.

OnealsoneedstorememberthatintroducingtheFMcompanytotheclientdoesnot automatically mean that they will be accepted. If they do get accepted,

neither does it mean that they necessarily come in as a middleman betweenCrawford and the client. In the end it is the client that decideswhether or nottheywanttheFMcompanytoenter,andwhattheywouldliketohaveincludedin

the serviceoffer. If Crawfordhasa strongandestablished relationshipwith theclient,itisveryprobablethattheywouldliketocontinuejustthewayitis.

When Crawford talks with the FMfirm we believe that they should focus oncommunicating the win‐win situations that they would like to create with theFMcompany.TheideaistobepreparedandknowwhatCrawfordwantstheday

when it might occur. Crawford’s part of the win‐win situation could be a dealwheretheFMcompanyleavesCrawfordoutoftheirserviceoffer,or itcouldbethatCrawford ispromised tokeepsomedegreeof thecontactdirectlywith the

endclient.

There are also some other things to consider regarding this scenario. SomecustomersarenotequallyimportantforCrawfordand“leaving”thosecustomers

to an FMcompany might even be beneficial. As we have mentioned before,workingtowardsFMcompaniescouldmeanjustashighprofitastoatraditionalcustomer.Therefore,itcouldbewisetofindoutwhichcompaniesthatarereally

theprofitableonesforCrawfordandhenceapplythestrategyespeciallytowardsthem.Ifweseeitfromtheotherside,therearealsosomecustomersthatarenotequally attractive to FMcompanies, which also could be of interest to identify

more specifically. Quite logically, FMfirms are less interested in work placeswherethereislesspossibilitytoperformmanagementoffacilities.

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When presenting the FMcompany to the client, it could be wise to do so to

another person besides the one that has direct contact with Crawford. Forexample, quite often there is someone responsible for themanagement of thefacilities, and most probably it is not the same person as the one having the

contact with Crawford. That way, it is more likely that the two contracts fromCrawfordandtheFMcompanycouldworksidebysideintheorganisation.

Figure20.Recommendationforidentifiedscenarios.

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10ConcludingDiscussion

Inthischaptertheresultandqualityoftheworkisdiscussed.Theauthorsreflectonthecontributionofthemasterthesisandreconnecttothemainpurposeandresearchquestionsstated inthe introductiontoensurethatthequestionshavebeenanswered.ThechapterstartswithareflectionofthequalityofthestudyasdecisionsupportingmaterialbasedontheDecisionQualityChain.

10.1QualityreviewbasedontheDQC

Throughout theprocesswith thismaster thesisourgoalhasbeen to contributewith informationand recommendations for futurestrategydecisionsconcerningCrawford’s approach towards FMcompanies. We have therefore had the

DecisionQuality Chain (figure 21), closer presented in Chapter 3, in mind toensurethequalityofourwork.Below,reflectionsaremadeabouttowhatdegreeeachlinkinthechainiselaborated.

Figure21.DecisionQualityChain.

10.1.1AppropriateframeFMisnoteasilydefinedandtherearemanydifferentviewsofwhattheconceptincludes.Dependingonwhatpositionandknowledgecompaniesandpeoplehave

theconceptisuseddifferently.WehaveputalotofeffortingivingthereaderaprofoundbackgroundaboutFMcompaniesaswell asCrawford’s role in theFMcontext to share a common frame of the situation when we start analysing,

discussing and finally recommending our solution to the situation. Even though

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our base line is from Crawford’s point of view we have written one chapter

(FMCompaniesintheBusinessContext)fromtheperspectiveofFMcompaniestogivethereadersomeperspectiveonthesituation.

10.1.2Meaningful,reliableinformationWe started to interview people from Crawford to understand what knowledgeandmindset therewas in thecompanyconcerningFMcompanies.Knowing thiswe could obtain our own view of the company’s mindset and concentrate on

gainingknowledgeaboutareasthatwereunknown.WecontinuedourinterviewswithpeoplefromtheFMcompaniestogettheirviewsandwealsohadmeetingswithvariousconsultantstogainamoreobjectiveperspective.

10.1.3Clearvaluesandtrade­offsThe impact/likelihoodmodelpresented in chapter9 shows scenarios that couldaffect Crawford’s business the most. Surprisingly we found a linear relation

between the four identified scenarios. In this case trade‐offs between differentscenario‐relatedactionscouldbehardtomake.Furtherresearchonmoreexacteconomic impact of the different scenarios is necessary to be able to make

rational decisions. Finally, in a much wider perspective, the strategic decisionsconcerning Crawford’s approach towards FMcompanies must be weightedagainstotherstrategicdecisions.

10.1.4LogicallycorrectreasoningThe master thesis is built up with a logic structure in order to let the readergradually absorbmoreandmore information toease theunderstanding for the

analysisandconclusionsintheend.ThemodelswehaveusedhelptounderstandthecomplexconnectionsandlogicintheFMbusinesscontext.Modelsarealwayssimplifications of the reality but necessary to clarify logic structures. Without

personaloreconomicinterestinparticularareasofthecompanyourstudycouldbeconsideredasobjectiveasastudyofthiskindcouldbe.

10.1.5CreativedoablealternativesBased on our identified trends in the FMbusinesswe have presented differentpossiblescenariosthatcouldoccur.Themanagementcanchoosetoprepareforthefutureindifferentwaysdependingonwhatapproachandstrategytheythink

fitsbest toCrawford.Someactionswillbenefit theorganisationasawholeandsome actionswould bemore specific and concerning the strategy only towardsFMcompanies.

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10.1.6CommitmenttoactionThis iswhereour contributionendsandwe leave the final link to complete thechain to themanagement team in Crawford. A decision to clarify the strategic

directionofhowCrawfordshallapproachFMcompaniesisvitalforthesuccessinthearea.Beforemanagementmaketheirfinalconclusionsofanewstatementofdirection further research according to Appendix E (Identified areas for further

research) is recommended. When a decision is made commitment to action isrequired. Thepossible implementation is a critical phase for strategic decisions.The new directions must be communicated and established in the company’s

processes.

10.2ReconnectiontotheMainPurpose

Webelievethatwehavesucceededinansweringthemainpurposeofthismasterthesis, namely to determine how the development of Facilities Managementcompanieswill influenceupontheservicestrategywithinCrawfordSweden.The

structureofthechaptersisshowninfigure22below.

Figure22.Chapterstructure.

To answer the main purpose we have structured the work with research

questions,wherethefirstonewassetouttounderstandthebusinesscontextofCrawfordaswellastheFMcompanies.Chapter4issetouttoexplainCrawfordinthe business context, what their business model is and how they work with

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FMfirmstoday. Insum,onecouldsaythatCrawfordhasaclearservicestrategy

and business model when it comes to traditional customers. RegardingFMcompanies, however, it seems to be unclear of how they should beapproached.Opinionsdiffer,e.g.aretheycustomersorjustchannels,andthereis

nosinglestrategyofhowtodealwithFMcompanies.

Inchapter5weputFMinthebusinesscontext.WedescribethevaluecreatingprocessandbusinessmodelforatypicalFMcompanyinSweden,whichisbased

oneconomiesofscaleandtheability tocoordinateactivities.Wecontinuewithaddressing some of the most important trends within FM; the FM business ismovingclosertomanagementissuesandthesupportofcoreactivities,innovation

is increasingly important in theFMbusiness,beingglobalbecomes important toreach out to big customers etc. One of the first things we realised is thatFMcompaniesprobablywill influenceCrawfordalotinthefuturesincetheyare

continuouslygrowing,asmanyorganisationshavediscovered theadvantagesofoutsourcingnon‐coreactivities. Itwasalso interesting toseehowCrawfordhadsimilarities to the FM business model with focus on the end customer and on

stronglong‐termrelationships.Also,severalofthetrendsintheFMbusiness,likeglobalisation and technology development, were well suited to Crawford’s

capabilitiesandwerealisedthatCrawfordhadgoodfoundationstosuitwellwithFMcompanies.However,sometrendspointedintheotherdirection,liketheFMtrendoftakingmoreandmoreactivitiesin‐house.

ThenextresearchquestionwastopositionCrawfordintheFMbusinesscontext,whichwedoinchapter6.Fromthebeginning,thiswasreallythebigquestioninourscopebutthescopechangedaswesoonfoundtheanswertothepositioning.

We have recommended Crawford to work together with FMcompanies as aservice provider as it comes with big opportunities and it is, in fact, the onlyrealisticoptionwithamoregrowingFMindustry.

Havingdecidedthat thebestoption isworkingtogetherwithFMcompaniesthenext obvious question was: how to work in the best way? We answered thisquestioninchapter7byaddressingthekeyissueswhenitcomestobecomingthe

preferred service provider and successful together with FMcompanies. Notsurprisingly,a lotof thekeyabilitiesdesiredbyFMcompanies turnedout tobeclosely linked to the FM trends. FMcompanies simply desire of their service

providertohandlethesameissuesastheFMclientsdemandofthem.Basedonthesekeyissueswehavealsogivensomestrategicrecommendationsofconcretedoable actions that Crawford could implement. Twoof these recommendations

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were: going into partnership with a core‐related business in order to broaden

activities and making the service process towards FMcompanies morestandardised.Weactually recommenda complementing servicebusinessmodeltotheoneexistinginthecompanytoday,whichinahigherdegreeisdesignedto

worktowardsFMcompanies.WefeelthatthisisthebestwaytoplaceamindsetinCrawfordwhere traditional customers are separated fromFMcompanies.Aninterestingobservationhere is thatCrawford ison itswayonseveralof thekey

issues in the business model towards FM. However, there are still others thatcouldandshouldbefurtherdeveloped.Weoptednottoprioritisetheactionsdueto lack of information in the Crawford business but we would encourage

conductingaworkshopinCrawfordtodecidewhichactionstotake.

Finally,we took a stepback from the relationbetween FMfirms andCrawford,and we looked at future FM actions concerning Crawford, which could be a

potentialthreatinthefuture.Wefirstevaluatedanddiscussedthesescenariosinchapter8,whichleadtoourrecommendationsinchapter9onhowtobestactinorder to prevent the possible threat connected to each scenario. The scenarios

are;FMcompaniesswitchserviceprovider,FMcompaniestakemoreactivitiesin‐house, FMcompanies cut prices and FMcompanies enter Crawford’s strong

customers. Some of the recommendations are as follows: Crawford needs to:showvalue inotherwaysthanprice,knowtheknowledgeonmargindifferenceswithFMasamiddlemanandestablishastandardisedreportingprocess.

To finally state something about thedeliverable,we can say thatwearehappywiththeresultsandwebelievethatwehaveachievedthegoalofdeliveringwhatwaspromised.During theproject itwas important forus tonever let goof the

final aim, to give strategy recommendations to Crawford. Some of ourrecommendationshavebeenonamoretacticalandevenoperationallevel,whichwe have done on purpose to show the realism in our work and increase the

credibilityofthethesis.Overall,wearesatisfied,andwehopethatourworkwillcontributetotheacademyandforemosttoCrawford.

10.3Contribution

This thesispresentsacomprehensivewayof seeing theFM industry inSweden.AlthoughtheconceptofFacilitiesManagementhasbeenaroundforquitealong

time, surprisingly little has been written in the area, particularly in Sweden.Focusing on the outsourced FM and the big FMcompanies in Swedenwe haveobjectivelycompiledandpresentedinformationabouttheindustryandwehave

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answered theoverall questionsofhow the industry looks todayandwhere it is

goingtomorrow.

ThemaincontributionofthethesisisthewayitenlightenstherelationbetweenFMcompaniesandtheirserviceproviders.Althoughthethesisisdirectedtowards

Crawford,ourintentionisthateverycompanyinthepositionofaserviceprovidercouldbenefitfromthetheoriespresentedinthisthesis.Wehavetriedtocoverallimportantaspects related to thecooperationbetweenanFMfirmandaservice

providerwhereopportunities,difficultiesandrisksarediscussed.Ourobjectiveisalsoforthethesistocontributenotonlytoeveryoneinthepositionofaserviceprovider but also to FMcompanies, which can use the thesis with the aim of

better understanding the dilemmas and difficulties often faced by their serviceproviders.

10.3.1ContributiontoAcademyWesoonrealisedthattheBusinessModelCanvaswasapowerfultoolthatcouldbewellapplicableinourprojectandithasbeenthemainthemethroughoutthemaster thesis. The project was a lot about identifying, comparing and finding

synergies between the overall business in Crawford and in the generalFMcompany. For that reason, theories aboutbusinessmodels,which cover thewholespectrumofanorganisation,seemedlikeaperfectmatchforus.Thebest

model at integrating theory into practise was the Business Model Canvas byDr.AlexanderOsterwalder,whichwasthemainreasontowhywechosepreciselythat model. Through enlightening and using the Business Model Canvas we

believe that we have contributed to the practical use of business models andmorespecificallybusinessmodelinnovation.

Realisingthatourthesisintheendwouldleadtostrategicdecisiontakingbythemanagementwewanted to find amodel that could really assure thequality ofourcontribution.SearchingforrelevantmodelsweoptedfortheDecisionQuality

Chain,which isapowerful tool for takingstrategicdecisions. It isaverygenericmodelthattakesthemostimportantoverallaspectsintoconsideration,whichisexactly what we were looking for. Having the Decision Quality Chain in mind

helpedustokeepfocusonthemostimportantissuesandassuredthatwedidnotmissanybigareas.

Even though we have not used any theoretical framework aiming solely to

FacilitiesManagementwebelievethatwehavecontributedtotheresearchareaofFM,morespecificallytotherelationsbetweenFMcompaniesandtheirservice

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providers as explained above. There are theories about these relations but we

havenotfoundanyasextensiveastheonegiveninthismasterthesis.

Weconsiderourtheoreticalcontribution‐informoftheBusinessModelCanvas,theDecisionQualityChainandresearchintheareaofFM‐tobesound.

10.3.2ContributiontoCrawfordThis master thesis first and foremost sheds a light on the mystery of FM. Thethesis maps out and describes the FM industry as it is today and also in what

directionitisheadinginthefuture.Insteadofuncertaintyandopinionsinseveraldirections, Crawford can hopefully nowpull together in the samedirection andtowardsthesameobjectives.

Crawford could consider themselves very happy when it comes to a futuretogetherwith FMcompanies.We believe that the organisation, e.g. due to theposition of a market leader and the global presence, is well adapted to work

togetherwithFMcompanies.Aswell,theservicestrategyinCrawford,withhighfocusontheendcustomerandadesiretobuildlong‐termrelationship,isalignedwith how FMcompanies see these issues. In sum, Crawford has very good

foundationsofbeingsuccessfulinafuturetogetherwithFMfirms.

Having this said,Crawfordneeds tobehumblebefore thesituationanduse theadvantage they have. Surely, competitors will arise and challenge Crawford’s

currentposition.Havingtherightfoundations,then, isagoodstart,but it isnotsure that it isenough tokeep thepositionas thepreferredserviceprovider.Bygettingthismasterthesis,themanagementinCrawfordnowhastherighttoolto

maintain that competitive advantage. To start acting soon will be the key tofuture successwith FMcompanies and to keep the competitive advantage; this

master thesis contributes with concrete strategy recommendations that couldfacilitateforCrawfordtoproactinginsteadofreacting,somethingthathasbeenadesiredaimfromourtutor,Mr.TimWebster.

InAppendixEwehaveaddressedsomeareasforfurtherresearch,whichcouldbeinterestingforpeopleatCrawfordtolookdeeperinto.

10.4Criticism

Becauseoftimerestraints,wehavehadtomakelimitationsinourmasterthesis.It could be criticised for only taking the perspective of the outsourced FM

business and the big FMcompanies in Sweden when talking about the FM

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business ingeneral.WeacknowledgethisbutalsoclaimthattheFMbusiness in

SwedenisdrivenanddevelopedbythebigFMfirms.

WehavenotdonedeepresearchonneitherCrawford’straditionalcustomersnorthe FM clients.We have, however, done some research andwe have read and

gatheredsecondarydata,butwehavenottakentheperspectiveofendusers inthisthesis.Again,weacknowledgethisandagreethatitisaflaw,eventhoughwebelievethattheresultswouldnothavechangedmuch.

To strengthen the recommendations even further we would have liked toresearchmorewithin Crawford to understand the processes and costs/revenuestreamsbetter.However,itwasnotprioritisedinthetimeoftheproject.

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c)Ibid.FMnewsletter3.www.addici.com/addici/opencms/sv/nyheter/nyhetsbrev/Nyhetsbrev2009_3/A2.html(2010‐01‐13)

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CardoIntranet–HandsOnLine.AboutCrawford.2009‐09‐02.URL:http://handsonline.cardo.net/ABOUTCARDO/ABOUTCRAWFORD/Pages/Default.aspx(2010‐01‐08)

CardoIntranet–HandsOnLine.Strategyforgrowth.2009‐10‐07.URL:http://hands‐online.cardo.net/aboutcardo/strategyforgrowth/Pages/Default.aspx(2010‐01‐08)

CEN(EuropeanCommitteeforStandardization).2009.Searchword:EN15221‐1.URL:www.cen.eu/esearch/(2010‐01‐08)CoorAnnualReview.CoorServiceManagementGroupAB.2008.URL:www.coor.com/FileOrganizer/GENERAL/Documents/Om%20Coor/Finansiellt/Coor%20Annual%20Report%20english_2009.04.30.låst.pdf(2010‐01‐11)

Coorwebsite.2009.URL:www.coor.com(2010‐01‐13)

Crawfordwebsite.Aboutus–History.2009‐09‐02.URL:http://www.crawfordsolutions.com/aboutus/history/Pages/default.aspx(2010‐01‐08)

Dalkiawebsite.2009.URL:www.dalkia.com(2010‐01‐13)

DHL.DHLISverigeGodeftermiddag.URL:http://www.dhl.se/publish/se/sv/aboutdhl/local_about.high.html(2010‐01‐08)

Eurestwebsite.2009.URL:www.eurestuk.co.uk(2010‐01‐13)

IFMA(InternationalFacilityManagementAssociation).VadärFM?–FMmarknaden.URL:www.ifma‐sweden.org/VadärFM/Marknaden/tabid/55/Default.aspx(2010‐01‐11)

ISSwebsite.2009.URL:www.se.issworld.com(2010‐01‐11)

JohnssonControlswebsite.2009.URL:www.johnsoncontrols.com(2010‐01‐13)

Sodexowebsite.2009.URL:www.sodexho‐se.com(2010‐01‐11)

ConferencetalksErnst&Young,TalkbyKuchler,MagnusatIFMAconferenceinStochholm.2009a.

Ernst&Young,TalkbyAndersson,ALindaatIFMAconferenceinStochholm.2009b.

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Other(annualreport,internaldocuments)Capgemini.ConsultingReport,FMintheNordicCountries–marketandtrends.2006.

Cardellino,PaulaandFinch,Edward.JournalofFacilitiesManagement,Evidenceofsystematicapproachestoinnovationinfacilitiesmanagement.Volume4,Issue3.2006.

Centigo.ConsultingReport,FMbusinessanalysis.2009.

a)CardoAnnualReport,Door&LogisticsSolutions,p.20‐23.2008b)Ibid.p.20

a)Crawfordinternaldocument,Neworganisationrollout.2009b)Crawfordinternaldocument,SegmentationProjectStatus.2009c)Crawfordinternaldocument,Hand‐OnMagazine,Nr.3‐SuperService.2009

CrawfordProductCatalogue,2009.

Ernst&Young.InternaldocumentsabouttheFMbusiness.2008.

Fender,Mike.Hasdesignedjacketto“TheSmartOrganization”byMathesonandMatheson.1998.HarvardBusinessSchoolPress.

PrincetonUniversity.SearchWordNet–Customer.2009aURL:http://wordnetweb.princeton.edu/perl/webwn?s=customer(2010‐01‐08)

PrincetonUniversity.SearchWordNet–Partnership.2009bURL:

http://wordnetweb.princeton.edu/perl/webwn?s=partnership&o2=&o0=1&o7=&o5=&o1=1&o6=&o4=&o3=&h=00000

Waltersson,Kurt.Bravida.DiscussionatIFMAconferenceinStockholm.2009.

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115

AppendixB:ThebigFMplayersinSweden

WhentalkingaboutthebigFMcompaniesinSweden,therearequitefew.Someofthepeoplewehaveinterviewedwouldnotevenagreethatthecompanieswe

have identified below belong to the category of FacilitiesManagement. This isbecauseofthefactthatthesecompaniesdonothaveatotalserviceofferand/ordonot support the core activities of the FM client. The FM companies that are

most developed, when it comes to working strategically with their clients, areJohnsson Controls and Coor.We have interviewed people from six of the eightbiggestFMcompaniesinSweden.

Company SpecialisedFMOffer TurnoverEUR Emp. Countries

ISSFacilityServicesAB InfrastructuralFM 364.621.000 7.672 Allovertheworld

CoorServiceManagementGroupAB

InfrastructuralFMTechnicalFMBusinessrelatedFM

546.667.000 4.053 Nordic,BelgiumandCanada

JohnsonControlsIntegratedFacilityManagementNordicAB

InfrastructuralFMTechnicalFMBusinessrelatedFM

47.845.000 182 Allovertheworld

AddiciFacilityManagementAB

InfrastructuralFMBusinessrelatedFM

60.048.000 675 Nordic

DalkiaAB TechnicalFM 173.853.000(2007)

1254(2007)

Allovertheworld

SodexoFacilitiesServicesAB

InfrastructuralFM*Daughtercompany

ACChandlesTechnologicalFM

22.683.000 153 Allovertheworld

EurestServicesAB(partofCompassGroup)

InfrastructuralFM 81.748.000 1.068 UK&Ireland,RestofEuropeandtheUS

YITSwedenAB TechnologicalFM 557.229.000 4644 Europe

Figure23.Thenumbersofturnoverandemployeesarefrom2008ifnothingelseiswritten.

Source:www.ratsit.com,www.largestcompanies.comExchangerateEuro=10.5SEK

WehavesummariseddataaboutSweden’sbiggestFMcompaniesinordertogive

the reader an easy overview over the market. Please consider that not all

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companies have an own subsidiary for the FM department; in those cases we

havetakenthedatafromthemothercompany,e.g.DalkiaAB.

ISSFacilityServicesABISS,shortforIntegratedServiceSolutions,isaglobalgroupfromDenmarkwhich

originallyderivesfromtheguardingservice. Itsoonmadeabignamewithinthecleaning business, which has long been the big flagship for the firm. Since thebeginningin1901thecompanyhasexpandedalotandtodayitisonethetopfive

biggestprivateemployers in theworld all categories, and ISS Facility Services isoneofthebiggestplayersontheFMmarket.

ISSFacilityServicesoperateasanIntegratedFM,andduetothembeingpresent

throughout the world most of their customers are of multinational character.They differ from other FM companies mostly in one aspect; most of theiremployeesworkdirectlyunderthefirm.Inordertoachievecredibilitytheywant

to deliver close to all their services with their own personnel and onlyexceptionally will they work with external service providers. (ISS website;Gyzander,ISS)

CoorCoor, which was formed in 1998, is the market leader in Integrated FacilityManagementwithintheNordiccountries(CoorAnnualReview,2008).Ascanbe

seen in the figure below the firm operates over several segments and some oftheir customers include Volvo, SAS, ICA, Skanska, Sandvik, NokiaSiemensNetworks,SAABandUnilever.

Figure24.Coorsegments.CoorSource:CoorAnnualReport

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Coor claims its competitive advantage tobe the fact that they are specialists in

supportingthecorebusinessworkofverydemandingcustomers.Thecompanyisfocusing especially on developing its real estate‐ and production services.Investmentsaremadeto improveandupdatesystemssupport,whichfacilitates

and improves themonitoring.A lotofemphasize isalsoputon issues regardingenvironmentalandenergysegments.(Coorwebsite;Rasmussen,Coor)

JohnssonControlsJohnsson Controls is a US company that was founded in 1885, which has abackgroundfromtheautomotiveindustry.EventhoughthefacilitiesmanagementbusinesswithinJohnssonControlsisoneoftheworldsbiggest,itonlystandsfora

smallpartofthetotalrevenueofthefirm.

The company’s capabilities include facilities consulting, performancemanagement,technicalservicesandbusinesssupportservices.Theobjectiveisto

workclosetothecorebusinessoftheirclients,andaligningafacilitymanagementprogramtotheobjectivesofthecustomercompany.JohnssonControlsworksonaglobalbasisandtriesnottosigncontractsonregionallevels.(JohnssonControls

website;Pindstofte,JohnssonControls)

DalkiaDalkia isoneof themostexperiencedplayerson themarket,withabrand that

wascreatedbackin1853.ThecompanyexistsallovertheworldandisEurope’sleading provider of energy services. Its mission is to optimise the technical,financial and environmental performance of the energy facilities itmanages. In

general,thecompanyhasalotoftechnicalservicesandfewsoftservices.Dalkiagivesemphasizetobuildinglong‐termcustomerrelationshipsanditispointedoutthat the company try to deliver innovative solutions (Dalkia website; Smith,

Dalkia).

SodexoSodexo(earlierSodexho)derivesfromanothertypeofbusiness,namelythefood

industry.Nowadaysthesloganis:“Sodexo,theworldleaderinFoodandFacilitiesManagementservices”.ThecompanywasfoundedinFrance1966andnowadaysit ispresentallovertheworld.FMisnowabigpartofSodexoandaccordingto

themselves they offer solutions that combine cost‐efficiency, systemmethodologyandHRdevelopment.AccordingtoErikWennerholm(Sodexo),oneof the core competences is that the company strive to work closely with

customersandalsotobephysicallypresentatsitewiththeircustomers.Sodexo

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worksmostlywithsoft servicesbutalsohasadaughtercompany,ACC,which is

involvedwithtechnicalservices.(Sodexowebsite;Wennerholm,Sodexo)

EurestEurestServicesABwasregisteredin1985andthecompanymostlyconcentrates

ontherestaurantservice.Thereishoweveralsoapartnowadaysthatisdedicatedto Facilities Management. Although the FM part of Eurest offers businessconsulting services aswell as technical services, it is still softer services such as

receptionandrestaurantthatarethecorecompetenceofthecompany.(Eurestwebsite;Hernström,Eurest)

AddiciAddiciisagoodexampleofanewcompanythathasenteredtheFMmarketthelastcoupleofyears.Thefirmwasformedin2007andistodayoneofthebiggestplayers on the Swedish FM market. Addici is owned by Danske bank and it

operatesintheNordiccountrieswithabout2000employees.

Addici is present in workplace services, security and buildings. Most of thebusinessiswithoffices,industries,shoppingmallsandairports.(Addiciwebsite)

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AppendixC:Basicinterviewguide

Introduction1)TellushowyoufirstgotincontactwithFM?• WhatisyourelationtoFMtoday?2)Wheredoyouworktoday?• Whatisyourposition?• Howbigisthecompany/organisationwhereyouwork?Organisationstructure/relationshipwithFM3)HowdoesFMcompaniescreatevaluefortheircustomer?3)HowdoyouworkwithFM‐companies?• Whatisyourbusinessmodel?• Whatisyourcorecompetence?• Howmuchdoyoudoin‐houseandhowmuchdoyououtsourcetoyourservice

providers?• Areyouworkingwithlong‐orshort‐termcontractswithyourserviceproviders?• HowmuchcontactwiththeFMclientdoestheserviceproviderhave?• ArethereanyrestraintsforaserviceprovidertocontacttheFMclient?• Howmuchinfluence,onthemanagementlevel,doesaserviceproviderhave?Customersegments(retail,logisticsandmanufacturing)4)HowdoFMcompaniesdifferindifferenttypesofcustomersegments?• Whatarethecharactersofthecompaniesthatoperatewithinthesesegments?5)HowbroadaretheservicesthatFMcompaniesofferinthedifferentsegments?• Aretheyoftenspecialisedinonesegmentordotheyworkinseveral?6)ArethereanysegmentswheretheFMindustryisgrowingmorerapidly?Geographicmarket7)Toyourknowledge,inwhatcountriesistheFMindustrymostdeveloped?• WhatarethedifferencesonhowFMcompaniesapproachdifferentgeographical

markets?• DoFMcompaniesgenerallyworkwithlocalorglobalserviceproviders?• WherecanyourateSwedenintermsofhowdevelopedtheFMindustryis?• ArethereanydifferencesbetweenSwedenandtheothercountriesintheNordic

market?Customers8)WhatcharacterisethedemandforFMwithinthedifferentsegments?• Howcommonisoutsourcingofnon‐coreactivitiestoFMcompanies?• Isthechoiceofservicesprovidedsomethingtheclientsfindsimportant?• Whatkindofrelationdotheclientshavewiththeirservicecompanies?

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TrendswithintheFMindustry• HowhastheFMindustrychangedoverthelastyears?Historicaltrends?• Whatdothefuture‐planslooklike;whatisthefuturestrategy?Trends?• DoyouthinkCrawfordwouldsuitasaserviceprovidertoanFMcompany?

Ending• Doyouhaveanythingyouwouldlikeadd?• Doyouhaveanyquestionstous?• IsitOKthatweuseyournameinourthesisandthatwequoteyou?• Doyouknowaboutanymaterialthatwouldbeofinterestforus?• Doyouknowanypersonthatwouldbeofinterestforustolearnmoreaboutour

thesis?

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AppendixD:Terminology

FM seeFacilitiesManagement.

FacilitiesManagement Integration of processes within an organisation to

maintain and develop the agreed services whichsupportand improvetheeffectivenessof itsprimaryactivities.

FMcompany/FMfirm seeI‐FMcompany.

I‐FMcompany Integratedfacilitiesmanagementcompaniesoffersacomplete range of support activities and

effectiveness improvements to their clients. Someactivitiesareconductedbyserviceproviders.

FMclient In this master thesis, the customers Crawford have

throughFMcompanies.

Traditionalcustomer Crawford’s customers with other channels than FMcompanies.

Serviceprovider FMcompanies’servicesubcontractors.

Productprovider FMcompanies’productsuppliers.

BMC Business Model Canvas. Alexander Osterwalder’s

modelpresentedinchapter3.

DQC Decision Quality Chain. Matheson & Matheson’smodelpresentedinchapter3.

Innovation Thesuccessfulexploitationandcapitalizationofnewideas.

Coopetition Coopetition occurs when companies that normally

competeworktogetherforpartsoftheirbusiness.

IKAM InternationalKeyAccountManager.

Glocal Aglobalorganisationwithlocalanchorage.

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AppendixE:Identifiedareasforfurtherresearch

• CrawfordisalreadyworkingwithseveralFMcompanies.However,therearemorepotential FMcompanies to cooperatewithand it couldbe interesting

forCrawfordtoactivelycontactthese.

• What is the real difference in profit with FM companies and traditionalcustomers? Are all FM companies less profitable or is it just depending on

each contract? How much are the overhead costs of each company? Areoverhead costs a lot higher on FM companies? These are all questions thatwouldbeinterestingtoanswerinordertomakeafairjudgmentofwhereto

focusinthefuture.

• In chapter 8 and 9 we discuss the risk of loosing “simple” service such aspreventive maintenance if FMcompanies were to take some of Crawford’s

serviceactivity in‐house.Tochoosethecorrectstrategicactionandtoreallydetermine the impact of this scenario, it would be interesting to know theprofitequivalencebetweenthesimplepreventivemaintenanceinrelationto

thetotalserviceoffer.

• Aswe have stated,we have taken the perspective of service providers andFMcompanies.Inaddition,itwouldbeinterestingtoconductinterviewswith

Crawford’s traditional customers to find out their perspective of FMcompanies;e.g.howdotheyseeapotentialentryorexpansionofFMfirms?Aswell, itwouldbe interestingto interviewFMclientstofindouthowthey

perceiveFMcompaniesandtheirservices.

• One of our recommendations in chapter 7 is to keep updated onenvironmentalcertificationsandlegislations.Crawfordcouldfurtherresearch

thisquestiontoseeiftheyareuptodateonallareas.

• In chapter 7 we also recommend to broaden the service offer in order to

become more attractive to FM companies. A question to further developcouldbewhetherornottopartnerwithsomeone,tomakeacquisitionsortodevelopthecompetencein‐house.