ODGERS INTERIM OPINION

31 October 2012

Duncan Hoggett – a member of the Odgers Interim Commercial Interim Division – discusses his market across the business and support service sectors

The Business and Support Services Practice at Odgers Interim works with a wide range of clients; from single service facilities management firms right the way through to full range BPO specialists. We also work closely with clients in the logistics and distribution sector so our experience and knowledge base is broad to say the least across these varied business to business industries. The kinds of assignments we handle range from functional leadership roles, bid support and programme and project management so it’s a mixed bag and each one is carefully considered to ensure our services and efforts are tailored to the specific client’s need.

Like many sectors, over recent years we have seen huge shifts in how traditional facilities management companies operate with many evolving from being single line service providers into multiple line or - what is termed by those in the business as - total facilities management businesses (TFM). Examples include security firms moving into cleaning and catering as well as organisations moving up the value chain by offering IT and broader consulting services. Serco’s recent acquisition of Vertex is a classic illustration of where and how the market is moving. It’s a fascinating trend and offers real scope for development and opportunity.

Another key industry is construction as many firms have also broken new ground with many large firms now offering clients in both the public and private sector full asset lifecycle management. This includes everything from building design and build right the way through to operating, maintaining and finally decommissioning if that’s what’s needed.

As an experienced interim provider, we tend to get involved where there is change, whether that is planned or forced. For clients in this space, margin pressure has increased significantly and as a result they are now looking at improving their operations. The days of them leaving new contracts to stand on their own are long gone and they are now seeking greater efficiencies through shared IT, HR and finance support. It’s also not just about growing revenue as there is a greater focus on the bottom line with switched on businesses asking fundamental questions such as “do we want to bid for this contract?” right at the start.

The logistics sector has also come under similar pressure but for different reasons. The growth of online shopping has been subsidised by third party logistic firms so there is now a realisation that not all business is good business. As a result, I think that over the next 12 to 18 months we will see a number of significant changes.

In terms of key growth areas, the public sector will continue to be a large part of the jigsaw for clients in the business and support services sectors, although many are now trying to increase their exposure and appeal to the private sector. Central and local government will continue to push service delivery off the public sector balance sheet as it is a quick way for politicians to realise savings. However, service levels will need to be maintained as reputational risk is high - just think G4S! On the flip side, firms will also have to evaluate which ones are worth fighting for.

My final prediction is that the market for interim managers in this sector will remain strong as we are seeing continued demand for change management expertise alongside increasing demand for people with public sector insight as well as knowledge of Justice, Defence, Health and Local Authorities.

All in all confidence is remaining pretty consistent and there are real opportunities for talented interims who want to make their mark within forward thinking and dynamic organisations across many fields.

If you would like to learn more about Duncan or his work, please do check out his profile.


Categories: Energy, Manufacturing & Infrastructure, Professional Services

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