Facilities management (FM), combined with aspects of resale (based on proper wholesale products) and outsourcing, will be the single largest growth market for private telecommunication service providers over the next few years.
The outsourcing/FM market – 1996-2001
1996 $750 million
1997 $1.3 billion
2001 (est) $3.3 billion
(Source: Paul Budde Communication – Telecommunications Strategies Report/www.budde.com.au)
The key, however, is to move away from the technical aspects and concentrate on customer services and applications. FM will have to be based on what must be the ultimate personalised service.
The most successful companies operating in this market have created arms’-length operations from their original companies (for example EDS from General Electric, IBM Global Services Australia and Computer Sciences Corp). Some of the most important elements of the service are independent advice and independent service provision. The company also needs to be freed from bureaucratic structures, since FM and outsourcing often need creative, flexible solutions.
According to a 1995 Yankee Group survey, the single largest problem confronting information technology managers in Australia was network management. The current changes in the communication infrastructure of Australia (data networks and telecommunications networks) is very complex and there is an ongoing shortage of skills. This makes the Australian and New Zealand markets very different from the European and US markets. Changes here are less relevant or have in part already taken place. Companies are generally larger and therefore better equipped to handle the complexity of the changes.
The difference in market situations provides excellent business opportunities for telecommunication service providers in this part of the world.
Corporate down-sizing has brought about the installation of more cost-effective distributed computing in place of centralised data centres and increasing reliance on networking for day-to-day business operations. Despite use of redundant systems on a limited basis, network failures continue to threaten costly disruption of essential services. As networks grow increasingly complex, information services managers will intensify their reliance on outside specialists to provide the needed expertise to offer integrated network management solutions. Buffeted by recession, managers have grown increasingly wary of costly investment in new technologies.
The tangible pay-back that corporations will increasingly demand from network management is a competitive edge via faster customer re-sponse, shorter product development and manufacturing cycles, improved service and support, and overall cost reduction.
Facilities management growth sectors in the USA
According to Frost & Sullivan, the major US growth markets are government, commercial services and medical end-users. They account for 69% of market consumption. Medical users will pace growth, with a 22% compound annual rate, followed by smaller legal, transport, wholesale/retail and utility end-user segments.
The total concept of facilities management based on total customisation will differentiate the winners from the mediocre players in this market.
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