Reclaim the middle ground

You might think I would have applauded such observations, having endeavoured for years to eliminate large numbers of useless, 'make-work' jobs, but I found them depressing. This facilities manager had clearly not realised the immense value his department could add simply by being effective. He might as well have imagined a utopia where work was unnecessary – after all, when would there ever be a supplier who didn't need management? And why would a facilities manager seek 'disintermediation'?

Disintermediation may sound like jargon, but it is just a way of describing what happens when your customer deals directly with your supplier, eliminating the need for you. For years, industries such as financial services have feared this cutting out of the middlepeople. Direct telephone insurance eliminates brokers; direct access to capital markets eliminates the need for investment bank placement; direct access to foreign exchange markets eliminates a corporate bank role, and so on.

Disintermediation is affecting many businesses, not just facilities management, and there are lessons that facilities managers can learn from other industries on how to cope and win. 'Re-intermediation' is how middlepeople can compete and re-establish themselves.

Facilities management is a difficult service area to define. Does it include information technology or fleet service? Sometimes, sometimes not. Does it include major works or refurbishment? Sometimes, sometimes not. Are facilities managers responsible for security or health and safety? Sometimes, sometimes not.

Nevertheless, under any definition, facilities management functions have a vast range of suppliers. These suppliers of goods and services seek all manner of ways to reach customers directly and bypass corporate entities designed to control their activities.

Reprographics suppliers attempt to sell design services; stationery suppliers seek special budgets beyond the facilities management budget. It is natural for such companies to try and extend their business within your organisation. Sometimes it is in the facilities manager's interests to ignore this, sometimes it is better for them to deal with it.

However, with the radical changes that internet technology is making to customer relationships, it is time for a fundamental rethink on how to re-intermediate and how re-intermediation adds value.

A few years ago, commentators believed the internet would kill middlepeople. But middlepeople have resurged with even more power, albeit in different roles

Before we look at facilities management in detail, let's see how another industry, professional computer sales, has dealt with disintermediation and re-intermediation.

One of our clients sold off-the-shelf computers to large organisations – so-called professional buyers. But the rapid rise of the internet, particularly in computer services, meant that key suppliers such as laptop providers started selling directly to the professional buyers, bypassing our client.

Sales initially went very well for the large suppliers and things looked bleak for our client. Our client was being disintermediated. This picture takes on an even bleaker look when you realise that all this occurred a few years ago at an early stage of commercial internet take-up. Our client was hit early – and hard.

Our client's response was to change its business model. It built a hortal, which is a horizontal portal that makes it easy for professional buyers to compare products from key suppliers. After a short period of time, our client had successfully re-intermediated itself by proving the importance of its role as a mediator.

Using detailed information from actual traffic, it was able to show suppliers how much market knowledge they were missing. Were suppliers working on improving disc drive seek time? Yes, but meanwhile customers were comparing suppliers on 'mean time before failure' and rarely contrasted disc drive seek times.

Our client was able to demonstrate that a direct sale to a professional buyer left the supplier with just a sale, not crucial information for the future. Using their independence and their resurgent power over suppliers, they were able to become the trusted third party for their customers, winning back an increased market share online.

A few years ago, commentators believed that the internet would kill middlepeople. But, if anything, middlepeople have resurged with even more power, albeit in somewhat different roles.

Measure satisfaction often, regularly and randomly, rather than relying on complaints or e-mail

In financial services, people go to independent sites to find the best deal. For example, bestmortgage.com or charcolonline.co.uk help people find a mortgage – long-established financial institutions have to take the business at competitive margins. Middlepeople have found ways to add value by providing information and authority – both to their customers and their suppliers.

Being a middleperson is often seen as a non-role, or even a role that subtracts value, yet middlepeople have existed since the start of business. Middlepeople are crucial. Without them, the right buyers don't meet the right suppliers in the right way to get the right products and services. Facilities managers play a crucial mediating role in organisations. The facilities management department needs to recognise its own value, learn from comparisons, build on it, measure it and take pride from it.

Facilities managers need to re-intermediate, find ways to add value, prove they've added value, and seek more. Here are some concrete examples of ways in which facilities managers can deliver more value to their clients: