SHEN CEO Sergey Shulga: about FM services, outsourcing advantages, market development and automation perspectives
Managing Director of SHEN company on the development of facility management in Ukraine, further market prospects, automation of real estate management, and also about the advantages that the transfer of non-core tasks to outsourcing is promising to the business. Despite the popularity of such services abroad, the facility management market in Ukraine is at the stage of formation. International giants are focusing on software and cloud technologies for real estate management. One of the national operators SHEN group also sees this as a perspective for the development of the Ukrainian market. In an interview with RAU, SHEN managing director Sergey Shulga told about the services the company provides for retail and other businesses, the advantages of transferring real estate to the FM company, how facility management develops in Ukraine, the prospects for automating the market, and , what trends will prevail in the market in the coming years.
– Sergey, tell us about SHEN and the role of Facility Management development in Ukraine?
SHEN is a Facility company that deals with systematic and coordinated management of facilities, infrastructure facilities and production equipment for their long-term life, minimizing risks and costs throughout the life cycle. Simply put – this is a whole range of services for servicing real estate. The main services that are included in the FM complex are cleaning, security, maintenance of real estate, catering, delivery of goods, landscaping, capital construction, refrigeration, air conditioning, ventilation and electrical works. Thanks to system products, even traditional services such as cleaning are transformed into high-tech processes. Our market has not grown to fully automated robots cleaners, packers, security guards, etc. but already now we are working to ensure that the client can get all the necessary information and analytics on objects online, and we, in turn, could immediately react to the changing situation in the trading room, and also analyze and plan the necessary work.
The facility management service is very popular around the world. According to the IFMA (International Facility Management Association), in 2016, the world market of facility management was $ 1.12 trillion. The annual growth of the industry is about 7-10%. Separately, I would like to note that the international FM is aimed at automating all possible processes. There are several reasons for such market development, tough competition in the developed countries market, high prices for energy resources, labor force, forcing companies to cut costs as much as possible without losing the quality of goods and services, and where traditional methods have already been tested, it is automation: The Internet of things, as a basis for “smart” buildings, as well as software for optimizing the maintenance and operation of the building are at the moment the main trends.
– How popular is the facility management service in Ukraine?
– So far, it is not as demanded as, for example, in Europe or the American market. In the Ukrainian market there are not so many companies that provide facility services. There are several foreign players who work by resorting to the services of contracting companies. At the same time, SHEN is one of the few national companies established in Ukraine developing the facility management market and providing services on its own, managing processes based on the IT platform.
– Why do you think that FM will develop actively?
– The development of the facility in Ukraine will occur together with increased competition. The owners will begin to understand that it is more profitable to outsource non-core services, while receiving not only quality services, but also the integration of all business processes into a single system, thanks to system products. One of our tasks is to convey to business owners in Ukraine that this is the only true way.
Time is money
– What are the main advantages of transferring non-core services to outsourcing?
– These advantages are many. The main one is TIME, which is released and can be used for the development of the main business. Now, many directors of companies in Ukraine spend about 30% of their time on organizing cleaning, repairing or repairing industrial or commercial premises, checking the prices, terms and quality of repairs performed by contractors, etc. Facility management allows you to free this time so that the top manager can deal with his main task – increasing sales and profitability of the business. In addition, facility management enables businesses to avoid additional risks. The content of the property is our profile. We know how to do this, we have specialists who are able to do this in a high-quality manner, and we constantly monitor advanced trends. At the same time, the maintenance costs are planned and stable, and all the risks that have arisen due to poor maintenance of the systems are compensated by the FM-company.
– Is the complex maintenance of real estate more expensive than self-management of real estate?
– Everything depends on the specific case, but often, the order of the facility management service does not entail an increase in the cost of maintaining the real estate, but on the contrary – it helps to cut costs. Often the client considers only direct costs and does not take into account the costs of accounting, lawyers, risks, depreciation of buildings, etc. As a result, facility management services yield significant savings. And at the same time we take risks associated with technical failures and provide quality control of the services we perform.
– Which facility management services are already the most popular in Ukraine and who most often becomes the customer of such services?
– Among the main services that customers use facility in our country – cleaning, security, maintenance of real estate. SHEN provides all these services. We are studying the possibility of adding catering as well, since we see the need for a market in it. As for customers, the main pool of our customers is retail. We also deal with trading, warehousing, office and industrial real estate.
– At what pace is the company growing SHEN and on which aspects of development is concentrated?
– The company has been growing every year for 11 years from the time it was founded, both in revenue and in the number of employees. However, we are not currently trying to increase the number of employees, we focus on achieving greater business efficiency. We are also moving in the direction of diversification. If earlier our main customer was Fozzy Group corporation, its share in business reached 80%, but now it takes less than 50%. Another key direction of development is innovation and automation of processes. We see that with increasing competition in the market, more and more companies are coming to understand the need to automate not only financial, administrative and warehouse business processes, but also issues directly related to servicing the real estate where there is room for significant optimization of work and saving resources.
– How long do you work and what basic services do you provide for Fozzy?
We have been working with Fozzy Group for seven years and the main package is cleaning and maintenance of real estate, starting with the replacement of lamps, and repairing air conditioners, ventilation systems or equipment. There are no specialists in Fora’s network of shops that are engaged in technical maintenance. And this is right, because retail should sell. The contractor company does not just control the quality of the works provided, we give the opportunity to do it remotely online, using a specialized system. We are very grateful to Fozzy Group for many years of cooperation, the opportunity to understand the market and “fill the bumps” 🙂
-In the interview often mention that your services are based and managed on the basis of automated systems. Tell us in brief about this
The question is not even in the system, but in the product and business model. We have moved to a level where standard FM processes are organized on the basis of IT platforms. In our company, the majority of business processes, both internal and external, the progress of the work, the resources used, the documentation, the quality, cost and customer satisfaction are organized and controlled by the system. Also, thanks to the system, we provide transparency and the client on-line can see how his property and equipment are serviced.
Before, people decided everything. Now people in conjunction with IT systems make the business effective.
What are the competitive advantages of SHEN?
We work only with those clients with whom we can grow up together. When we consider a possible contract, first of all we look at the prospects, both for us and for the client, in terms of efficiency and the value that the client expects and which our company provides. If we understand that the client value is only a price reduction, we most likely will not consider this contract. It is important for us that the client who cooperates with our company understands the values of facilitation management.
– In your opinion, what constrains the development of facility management in Ukraine?
– Now many companies do not trust outsourcing because of poor quality of services. Unfortunately, this is due to the fact that most companies want to close these services for a minimum budget. But when a retailer orders a service for a minimum budget, then the quality of this service will be appropriate. After all, the performer will also attract specialists for a minimum wage, buy cheap materials, etc. The client understands that a cheap service can not be of high quality. Companies that agree to work for a minimum budget, promising high quality and as a result provide a poor-quality product, simply destroy the trust in outsourcing in principle. Similar mistakes were made by our company. We made conclusions, focused on the market, on the product and are now developing with these goals in mind more meaningfully.
– Is there a problem with the personnel in facility management? How difficult is it to find qualified personnel?
The problem with cadres does exist. But we understand that the turnover of personnel is influenced not only by external factors, such as open borders, fast growth rates of prices and salaries, but above all, management and the company’s management model. In Ukraine there are no professionals in the field of facilitation management. Seeing this problem and trying to form and develop the market of management facilitation in Ukraine, we organized the Facility Academy in the company, which is currently training specialists for Shen company, and in the future will provide training for management facilitation specialists for the Ukrainian market.
If we ask how SHEN develops the market of management facilitation in Ukraine, then we can safely answer that, firstly, we find and introduce innovative IT systems in Ukraine, which makes it possible to automate all processes related to facilitation management. And secondly, we are striving with the help of the Facility Management Academy, to make the fasiliti market more professional.