New Dimensions

Five D

The answer is an unequivocal ‘yes’ to staying in the fast lane, as the company more than doubled its revenues year-on-year in the financial year ended July 2014, for the second year running. Some of the growth has come from organisations that were already employing outsourcing and who came back to market seeking a better deal – and Five D was able to impress them into using their services. That is a matter of having the best day-to-day solutions to a particular client’s needs. Some other companies have come into this market as newcomers, something Steve tends to associate with tough economic conditions – businesses seek greater efficiencies and a better way to do things when the pips begin to squeak. “People are looking for more cost-effective ways of getting things done and outsourcing is one of those ways,” explains Steve.

Having that spread of incoming business flowing from both sectors – experienced outsourcing buyers and newcomers – is important, he believes. “It is important to win in both of those forums because they each have somewhat different characteristics.”

Australia’s largest privately owned integrated property and facilities management outsourcing company, Five D “manages services to more than 5,500 client locations and has a track record of delivering integrated solutions that have unlocked significant value for our clients”. During the last ten years the company has established itself as a key player in the corporate real estate market, employing more than 200 highly qualified staff, utilising proven processes, and maintaining a significant financial investment in SAP management information systems. Five D currently manages some $950 million in rentals on behalf of its clients.

As it has grown, Five D has taken care to implement its own systems so it can do so optimally for its clients. The company is now triple certified, adding QA and H&S accreditation to the original ISO 14001. “What that has done for our business is to force upon it, right the way through, a much stricter regime of process and procedure which is great for business – and it is something we need now,” Steve shares. “We have flown through the 200-staff mark and now we have staff dispersed all over the place.”

Steve concedes that outsourcing and property maintenance is maybe not a particularly sexy business; it is not a sector where each year the company can offer a new model, a new colour or an upgrade. So how does Five D plan to keep up its stratospheric growth? He says there is no specific new dimension to add to the five existing five dimensions on which the company’s name is founded; but Five D is big on investment in IT and further development of its interactive client portals with dashboard reporting. “In our market, IT is really the underpinning requirement.” Even two years ago it was a very large barrier to entry to new players in this market and this is now getting bigger because the IT itself is getting more sophisticated. “To start with a blank sheet of paper, if you want to invest in this market you’ll need many, many millions of dollars because there is no out-of-the-box system that does it for you – everything has to be built and customised. So those already in the market have a very significant advantage over anyone wanting to enter. From our perspective, we have ten years of investment in IT and our business is growing through people not only doing good work, but doing it from a really solid foundation of great IT systems. That is very hard to replicate.”

While industry in general is showing signs of reversing the trend toward outsourcing core functions, including part or all of the production process in the manufacturing sector, Steve says there is no sign that anyone wants to take back more of the role of building management. Whilst there were signs prior to 2012 that some government departments were performing more functions within internal property groups, with the benefit of hindsight that now appears to have been an aberration and we are certainly not seeing any such trend now,” he says.

However, it is evident that some of the very largest corporations are reviewing “disaggregation.” What Five D does is corporate real estate in its broadest sense, and for companies with many thousands of properties, the time has come to ask whether a standardised one-size-fits-all approach to their management is the right one. Thus certain services within their portfolio may lend themselves to being brought in-house or contracted out to a different specialist provider. “However, for organisations any smaller than these super-sized portfolios, integrated outsourcing has continued to grow.” It is more, Steve suspects, a question that needs to be asked, rather than a limitation of outsourcing, to see if things can be done better; in any case Five D can tailor its services to fit, rather than just doing the same thing for every client.

Budget cuts – such as those swinging their way through both corporate Australia and the public sector at the moment – are helpful in prompting more organisations to consider outsourcing, but Steve says they hardly play into Five D’s hands as his team has to find ever more cost-effective means of getting the job done as the funds available wither. “By and large, outsourcing is already accepted as the most effective means of managing a portfolio of properties anyway. What budget cuts do is create the very clear picture that savings must be made.” In terms of energy, for example, savings are needed not only ‘because of the environment’ (a very worthy and important cause in its own right) but ‘because we have to save money’. “It puts more pressure on the relationship but I think it is good pressure. It is something the market can respond to better than an in-house situation, reinforcing the outsourcing mantra. In many ways it hardly matters why, but people have to go find better ways of doing things.”

An expert such as Five D can help in this sphere too – property and facilities management is not just about cleaning windows and fixing door handles. The company can analyse the portfolio of the client and come up with ways of synchronising activities, or taking advantage of lease renewal periods, to come up with better outcomes. Going forward, it is even possible that Five D could become engaged in property projects at a far earlier stage – sitting down with an architect or construction company to take a look at a design and bring its own experience of real-life building occupancy to play on the efficiencies that could be made by changing aspects. Whilst this already occurs in the market via the Public Private Partnership (PPP) model, Steve doubts it would be feasible for Five D – certainly at this stage – to put together the necessary team to carry out such consulting exercises, but he does see an increasing demand for it, particularly when it comes to a complete refurbishment of an existing building.

Five D is already managing quite a substantial property portfolio in Papua New Guinea and is contemplating the pros and cons of other overseas markets. But Steve believes there is still plenty of scope for growth within Australia. There are many businesses throughout the country that need to make savings in their overheads at all levels, that should consider outsourcing, and that would benefit from the attention of this management company, which does not concern itself with the actual nuts and bolts – it uses the best of local suppliers to carry out the trades – but has the sophisticated systems to keep close enough tabs on a client’s properties to keep things in the black – as well as in the pink.

Making Sense of Management

Management is the art, or science, of getting things done through people. Sounds fairly straightforward – except for the fact that people are not robots waiting to do our bidding. People have their own minds, motivations, and goals. So how do managers keep operations – and the people behind them – running as planned?

December 16, 2018, 6:44 AM AEDT