Monitoring and evaluating the effectiveness of business operational strategies that enhance competitive advantage for facility management companies : a case study of ten (10) facility management companies in Gauteng, South Africa

Abstract

The South African facilities management (FM) industry has seen increased operational strategy complexity from single-site contractors providing basic janitorial services to highly integrated and bundled FM service providers. Despite these major changes, very little research has been conducted on the effectiveness of current operational strategies in meeting FM business goals, particularly in developing market competitiveness. The lack of research in this area motivated this study which aimed to evaluate the effectiveness of business operational strategies that enhance competitive advantage for FM companies. This included conducting a SWOT analysis of current business operational strategies utilised by FM companies, determining the nature and extent of FM operational strategies evaluation and determining the extent to which clients of FM companies are satisfied with the business operational strategies of the FM companies they employ. The study applied a qualitative methodology that was supported by a quantitative methodology. A sample of 10 Gauteng based FM companies was purposively selected from the SAFMA register of FM companies operating in Gauteng. In this sample, 6 of the companies were classified as large corporates and 4 as SMEs. From the sample of companies, a sample of 10 directors and 10 managers were conveniently selected. A further sample of 10 directors from companies that utilise the services of the FM companies (hereafter referred to as client companies) was also selected. Three different semi-structured interview schedules that were specifically designed for each group of sample elements were used to collect data from the respondents. The collected data was analysed using thematic content analysis and descriptive statistical methods. In the research framework, it was accepted that the operational strategies that are applied by FM companies are a function of the internal and external environments that they operate in. It also emerged that the FM industry relied on models that were designed for strategic management purposes in the evaluation of operational strategies because it did not have industry specific evaluation tools. From the SWOT analysis, SAFMA membership, a strong brand reputation, a high BBBEE rating, pricing advantages and intact operational policies, systems and processes were considered as major organisational strengths for the FM industry. From the primary research, the following challenges emerged with regards to the evaluation of operational strategies: disagreement on evaluation ratings between FM companies and clients, the use of outdated evaluation models and non-industry specific models reduced strategy evaluations to a mere formality as opposed to a developmental process and the manipulation of evaluation models by managers and supervisors to increase scores. The major reasons for engaging the services of FM companies were to reduce operational costs and share or transfer risks. Clients were not satisfied with the process of service level evaluation conducted by the FM companies. Clients of FM companies generally agreed that they were able to realise certain benefits from utilising the services of a FM company. However the benefits derived differed amongst clients and from one FM company to another. It was recommended that FM companies must maintain their registration with SAFMA as this enhances their reputation. FM companies must invest in branding, training of staff and in technology. FM companies must attempt to improve their BBBEE rating considering the importance of the government as a client to the FM industry. FM companies must regularly evaluate their operational strategies as this is necessary for identifying weaknesses and implementing measures that capacitate employees to adapt to the changing market conditions.