I have always been a strong advocate for the role processes and internal controls play in overcoming the efficiency maze. When organizations embrace internal controls alongside process standardization, compliance and technology, they unlock innumerable opportunities for cost optimization. This approach provides a way forward to extract hidden costs and eliminate waste.
In their efforts to upend margins, companies must adopt robust compliance frameworks and standardized processes, whether related to risk management or operational standards, while placing a strong emphasis on workflow automation, as there is sufficient room through efficiencies purge. Unfortunately, in this saga, many view these implementations solely through the lens of control and compliance, which is significantly costing the companies. It is crucial for the industry to broaden the role of governance frameworks, as their impact on improving efficiencies is monumental.
I consistently emphasize to my teams the holistic benefits of these elements in achieving cost optimization, urging them not to fear it merely as a risk or audit exercise.
Facilities Management (FM) industry must rise above to leverage its role beyond quality, internal controls, or compliance, especially in the backdrop of the ongoing onslaught on gross margins in the current market landscape. This paradigm of compliance has become a dominant factor. From payroll management to workforce productivity and workflow dynamics, whether in work orders or other streams like inventory management, logistics, and overhead control, effective processes play a pivotal role in driving cost efficiencies.
Over the years, our contract management reviews have revealed how ineffective controls and deviations from established processes have led to losses and pilferage. Therefore, it should not just be audits that highlight these missed opportunities; FM professionals should proactively utilize these avenues to safeguard effective FM regimes.
Facilities Management companies must foster a culture that epitomizes internal controls and compliance, with a strong emphasis on technology and workflow automation. With each passing day, in the wake of the deluge of FM margins, these elements are becoming essential enablers of cost efficiencies critical for managing the bottom line slide. Notwithstanding their other benefits in terms of operational resilience and service excellence, strengthening retention and brand reputation. Below are key enablers discussed in detail.
Internal Controls: Enhancing Accountability, Standardization, and Performance Transparency
Internal controls are essential for safeguarding resources and driving accountability within an organization. In the context of cost leak prevention, strong internal controls help eliminate wastage, billing errors, inventory shrinkage, and procurement fraud, which are common sources of hidden costs in FM.
Internal controls pushes standardization to follow best practices, where it helps enforce standardized processes across sites and contracts, thereby reducing duplication and inefficiencies. They also help bring performance transparency through apparent oversight, allowing for real-time financial and operational KPI tracking and enabling proactive cost management.
Moreover, internal controls promote standardization by enforcing best practices across various sites and contracts. This standardization reduces duplication and inefficiencies. They also enhance performance transparency by providing visible oversight, allowing for real-time tracking of financial and operational key performance indicators (KPIs). This capability enables proactive cost management.
People should know that without effective internal controls, FM companies risk pilferage, compliance breaches, and inconsistent service quality, which often result in client penalties and eroded profitability.
Compliance: Not Just Risk Mitigation and Cost, but a Cost Optimization Opportunity
Compliance ensures risk mitigation and operational discipline. It helps avoid penalties, which are an inherent risk for businesses. Additionally, this ensures compliance with all regulatory and statutory requirements (e.g., safety, environmental, and labour laws) as any violation can result in fines and costly litigation.
A compliance track record helps with contract retention, as well as in client engagement and trust. Companies that demonstrate compliance help build client confidence and retention. Besides, people should know that client retention is also a cost optimization enabler, vis-à-vis new business acquisition.
The compliance role in efficiency is often lost between the lines. In FM operations, there is more fear-mongering and defensive posturing than a proactive approach to business resilience.
Efficiency boost through compliance is not a misnomer, whether in workforce management or other work project streams, eliminating ring-fenced wastages. It is not just for contract performance alone, but a way to optimize financial performance, be it for the company or the client, in terms of savings. Compliance-centric frameworks align with good practices that forbid complacency. Adhering to them fosters discipline and reliability and reduces crisis-related expenditures. Therefore, compliance isn’t a cost centre; it’s a cost saver by reducing disruptions and liabilities.
Technology & Workflow Automation: Lean and Efficient
Ideally, it is the engine of lean and efficient operations. Regarding manpower optimization, automating repetitive tasks (e.g., work order routing, asset tagging, attendance management) reduces workforce dependency and human error. In most of our deep-dive diagnostic reviews, we observed that many hidden costs are left untouched in workforce deployment dynamics, ranging from attendance to time sheets to overtime, due to manual interfaces and in other work streams as well.
Also with Real-Time Monitoring: IoT and CAFM/BMS systems enable predictive maintenance, reducing costly reactive repairs and equipment downtimes, besides cutting unnecessary schedules
Field-level control awareness and fraud risk management in day-to-day FM operations are two other key aspects that can further deepen the impact of internal control frameworks. They often act as silent leak points—missed or under-addressed in routine oversight—yet they have significant influence on margins, contractual integrity, and overall cost governance. A sharper focus on control ownership at the field level, supported by adequate training and accountability, is equally critical in the present scenario.
Resource efficiency, from consumables to spare parts – herein, automation is yet another facet that streamlines the use of consumables, utility consumption, and building asset lifecycles through data-driven decisions.
FM professionals must recognize that every automated workflow across all work streams translates to fewer delays, lower manual effort, and faster turnaround — all of which reduce the cost per task/unit and open avenues for additional work streams to provide revenue optimization opportunities.
The strategic imperative of this opinion piece is that FM companies should embrace internal controls, compliance, and automation as strategic enablers to help in cost optimization. They must understand that this helps achieve leaner operations, enhances service consistency, and scales the business, ultimately leading to better financial results.
I want to conclude that it is high time for people in the Facilities Management industry to realize that, considering the industry’s manpower-heavy nature, its inherent error-prone centricity, and its margin-squeezed models, its vulnerability requires a risk-averse culture and technology renaissance. Additionally, my aforementioned paradigm is not only about safeguarding financial interests, but it is also a strategic approach that serves as a perfect mitigation step to avoid business disruption and client dissatisfaction.