Smarter business models in commercial cleaning
Competing in ‘A More for Less’ market
By Nils J.van der Zijl, VP Sales & Marketing, Softbank Robotics EMEA
The commercial cleaning industry is set to grow significantly over the next five years on the back of large-scale property development in many economies across the EMEA region. Increased building square footage in major cities throughout Europe will see demand for cleaning services soar and present a huge opportunity for cleaning contractors and facilities management companies to expand into new markets and drive revenue.
However, despite these positive projections, the general feeling amongst many FM suppliers and within the cleaning industry itself is subdued, characterised more by concern and uncertainty than excitement about the future. FM companies find themselves (and their profit margins) being continually squeezed by clients and under increasing pressure to improve (and demonstrate) performance. Client expectations are rising exponentially and a growing ‘zero tolerance’ attitude to poor performance is raising the stakes and heaping pressure onto business leaders within the sector.
As we all know, margins are already tight and bids in an ever more competitive landscape are increasingly won solely on price. Cleaning providers are expected to demonstrate service value, innovation, sustainability credentials and an awful lot else besides, but it’s still a market where clients want more for less and it’s largely a race to the bottom to secure new contracts.
Against this backdrop, FM suppliers are also contending with severe workforce challenges within the cleaning sector, with rising labour costs and one of the highest levels of staff turnover of any sector. This is creating a perfect storm for the FM industry, under increasing pressure to deliver a higher level of service, at a reduced cost, and with an expensive and fluid workforce.
Innovation beyond technology
In response to these challenges, FM leaders are looking to new technologies to deliver the efficiencies and improved performance that they so evidently need. Most contractors are putting innovation at the centre of their future strategies and pointing to new technologies, such as AI and IoT, as the answer to their problems. Indeed, McKinsey recently pointed to an ‘Internet of Things (IoT) evolution’, ‘the advent of robots’ and ‘augmented reality’ as three major trends that are having a profound impact on facilities management.
However, in an industry that has traditionally struggled to integrate new technologies into operations in a smooth and efficient way, it’s important to recognise that technology in itself, no matter how advanced and cutting edge, is not a silver bullet. Many within the sector will be all too aware of previous instances of major investments being made in expensive cleaning machinery that never came close to delivering on the promises, hampered by a lack of buy-in amongst cleaning teams and a lack of skills to get the best out of the technology.
Genuine innovation has to be about more than simply deploying new technology into operations. It is about new business models, new approaches to operations and new mindsets and behaviours. The reason that so many digital transformation programmes fail, both within this sector and across business as a whole, is that organisations do not create the right environments and cultures in which new technologies can be harnessed to their full potential. Too often, organisations invest in technology and think that is enough; experience tells us it isn’t.
The benefits of a cobotic business model
Over the coming years, cleaning contractors will increasingly deploy cobots within their operations. Cobots are collaborative robots which carry out repetitive or strenuous tasks which would otherwise be performed by a person, but they work alongside that individual or team, not in their place. So within cleaning, we’re already seeing cobots being deployed to undertake vacuuming, freeing up cleaning teams to focus on higher value tasks which can enhance service levels and make a real difference to end users.
The commercial benefits of cobots working harmoniously alongside cleaning teams are truly compelling, delivering greater efficiency and performance on specific tasks, improving margins, reducing energy consumption and directly addressing many of the staffing challenges mentioned above. Cobots empower cleaners to take on more varied and fulfilling work, whilst letting machines take care of repetitive and strenuous tasks where they can deliver a higher and more consistent level of performance.
However, cobotic-driven innovation is not just about machines and devices; it is also about advancing innovative business models and new thinking within the industry. Already we are seeing forward-thinking FM and cleaning contractors adopting new approaches to their planning and operational models. For instance, some have moved away from the established procurement model for technology within the sector, and are accessing machinery through leasing, or ‘as a service’ models. This is putting a stop to the huge up front capital expenditure that has been such a barrier to technology adoption within the FM industry, and instead allowing these businesses to deploy the very latest innovations easily and cost effectively.
So rather than having to commit to €50,000 of expenditure to purchase a single piece of cleaning machinery, with no real visibility into the value it will bring or its lifespan, contractors will instead pay a monthly cost of say €500 per month for a cutting edge cobot, with all servicing and upgrades included. This means greater control and transparency on costs and ultimate flexibility and scalability.
Beyond this, the introduction of cobotics into the sector will also require new skills and structures to be embedded within cleaning teams and at managerial level. Cleaners will need to be comfortable and happy to work alongside cobots, and managers will need to re-think how and where they assign different tasks, based on the relative strengths and competencies of both humans and machines.
Ultimately, it comes down to creating a culture where people in all areas and at all levels of the organisation are open to fresh ideas and new ways of working, and are able to adapt to change with a positive and informed mindset.
Time for a cobotic solution
Without doubt, new technologies such as automation and AI can address many of the serious challenges facing facilities management suppliers over the coming years, but technology adoption must be part of a wider innovation strategy and widespread appetite for change. Business leaders need to work with their partners to drive innovation into every part of their operations, across every department, process and customer engagement so that they can derive maximum benefits from new technology.
The race for innovation within FM and commercial cleaning is well and truly underway. The winners will be those organisations that successfully evolve their business models, behaviours and cultures to drive efficiency and productivity, and to empower their people to work harmoniously alongside new technology.
This is ultimately what the shift to cobotics brings; and it’s not something that will happen in the future. FM suppliers are already deploying cobots and optimising the way that they service buildings and the value they deliver to their clients.
The cobotic opportunity is now, and FM leaders need to act fast in order to reap the benefits and get ahead of the competition.