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Marcopolis presents the Saudi Arabia Report focused on the investments, doing business, economy and other topics featuring interviews with key executives. The sectors under review in this issue are industry, real-estate, ICT, investments, banking sector, telecom sector and many more.
InterviewsOctober 28, 2021
Discussing Property and Facility Management in Saudi Arabia with Mohamad Ali El Khayat of TOFM
Mohamad Ali El Khayat, General Manager of TOFM (Takamul AlOula Facility Management)
- Written by Sandra Francisco
- Published: October 28, 2021
Interview with Mohamad Ali El Khayat, General Manager of TOFM (Takamul AlOula Facility Management)
What is your assessment of the facility management sector and how has Vision 2030 affected your industry? Have you had to implement new strategies to adapt to what the sector and your clients need?
The facility management sector is worth 200 billion riyals. It is often seen as a hidden sector because people do not usually think about the people doing maintenance on or cleaning the facility. I have been in the industry for the last 12 years in Saudi Arabia. Facility management in Saudi Arabia used to be a labor type of business, when you could only bring people on to projects such as cleaners, technicians, and give them to the client and the client would have to manage them. Now, we have shifted to a completely performance type of services, when the client is only demanding service quality, service standard, and then all service providers have to compete to provide the best value for money to the customer. There has been a full evolution of the industry itself. Definitely, Vision 2030 has brought a lot of changes to many industries. Most industries were forced to bring in new ideas and new concepts in order to cope with the changes that are happening in Saudi Arabia. In the past when we used to participate in tenders for facility management, the tenders used to be booklets of 10 or 15 pages of each small requirement and you could participate putting in your prices per headcount and giving it to the client, the client would approve you, and then you would get the bid. Now, what we are seeing is that for every bid that we are being invited to participate, we are receiving a box of requirements from the client where he has detailed every single aspect of his requirement, his expectations, the service level agreement, the KPIs. This might seem to someone that is not in Saudi Arabia to be something that is obvious or common; however, in the West, for example, in the US or in Europe, facility management is a more mature industry. But now, in Saudi Arabia, the change is happening in that sense that now the customers are becoming more aware. We are facing what we call the informed customer type, the person that knows what he wants, and you need to provide him with a proper response that meets his expectation in your proposal and assumptions that you put in. There is a change in the demand of technology. All customers ask you for technology in every aspect of their businesses. In facility management as well, you can see this even though the technological advancement in this sector evolves slowly. The way cleaning is done today is very similar to the way it was done 40 years ago. A bit of equipment has been introduced, but we are still adopting the same methods. Now, there is more eagerness and the customers want to implement and they want to benefit from the Internet of Things. When we talk about Internet of Things, Saudi Arabia is now becoming a pioneer in implementing technology in every single aspect. In the construction projects, all the projects that we are seeing are becoming state of the art projects adopting smart systems, smart buildings, etc. We have seen buildings where the faucets actually communicate with the facility management service provider requesting to be repaired. The ACs communicate and they give messages that they need to be maintained or they need to be inspected. Gates auto-identify visitors and they open using face recognition technology. This is something that has happened very quickly in the last five years in a way that even facility management service providers are not capable of satisfying the eagerness and the willingness of customers that want to see more technology. No matter what technology we bring in, they want more. They want something that is out of this world. The projects that are being announced now in Saudi Arabia from NEOM, Qiddiya, to the Red Sea PIF Project are beyond normal types of buildings. These are buildings that are smart and buildings that are utilizing construction material that is renewable and energy efficient. This all is going to force facility management providers to evolve and to cope with new technologies. It is a very positive thing that we are relatively new in the market. This is something that we see as very helpful for us because adapting to these new changes is very easy for us. We are very dynamic in dealing with our business. Saudi Arabia is changing and with it, every single company and industry is going to change. The challenges are becoming more towards building up new ideas and new concepts.
What are your competitive advantages? What makes you different from other companies in the sector?
We are one of the very few companies in Saudi Arabia that will deliver both property and facility management services. We try to provide property management services that increase the revenue of the landlord. On the other side, we provide facility management services that are always optimizing expenses.
Our most important competitive advantages are our passion and the fact that we stick to our principles and to our vision. We wanted to become a facility management service provider that is actually going to change the facility management industry in Saudi Arabia, and we are working towards this target. We differentiate ourselves from our competitors. Unfortunately, the Saudi Arabia market for facility management in the last 40 years has been an industry where someone was trying always to take advantage of the other between the customer and the client and the service provider. There was no transparency in delivering the services. We are working towards implementing our contracts in a proper, professional, ethical, and transparent way. Very few companies in Saudi Arabia have done what we are doing in that we are actually entering into contract agreements where we share cost savings with our customers. We have entered into contracts when the contract value was X amount and whatever saving was brought into the facility management efficiency by introducing our technology, trained staff, optimization methods that we use, we succeeded in making savings to our customers that were shared with the customer. It is very uncommon to find service providers that share their own results with their customers openly, transparently identifying areas of savings, and reflecting these areas of savings into savings in the billings to the customers. Being also a new company, we are always trying to adopt the latest technologies. We have recently worked on implementing the Internet of Things in delivering services. For example, in one of our projects, we are installing sensors in the toilets that automatically send a message when the toilet is used and needs to be cleaned. After a number of times, it sends a message and it gives us a signal that we need to send the cleaner to clean the toilet. This has helped us to reduce the number of cleaners that are deployed in the toilets and this saving was reflected in the customer's billing and invoicing. There are so many technologies that are still not explored. We are working with our engineers on exploring all these technologies. Our competitive advantage is that we deliver what we commit to. We do not venture into contracts that are not bringing benefit or not bringing value to the customer just to make us make profit from the customer. We always attempt to venture into projects that bring value for both parties. We are always trying to be fair with our customers because we understand that the market is challenging, businesses are struggling to optimize their costs. We do not want to be a part of the problem. We want to be always part of the solution. Our successes become their successes.
You provide many different services such as energy audits, energy management, asset management, property management, carbon footprint management, energy reduction programs, etc. Could you give more details on these products and services and how you are customizing them to each customer?
We are one of the very few companies in Saudi Arabia that will deliver both property and facility management services. Property management is what brings money to the landlord or to the owner of a facility. We try to provide property management services that increase the revenue and increase the money that is the income of the landlord or the owner of the facility. On the other side, we provide facility management services that are always optimizing expenses. So, in a way, we are giving a solution to our customers that brings the best revenue and maintaining a balance between give and take between the tenants, the occupants of a facility by providing efficient property management services and by taking care of the facilities themselves, making sure that they live there beyond their lifecycle expectancy. Energy efficiency is something recently that we are introducing and it is something that we do as part of our value add services. Energy efficiency does not have to be something that is very technological. In Saudi Arabia, we are still in the initial stages of implementing proper energy efficiencies and taking care of our environment. Part of our bundled services that we provide to the customers is that energy audit to identify areas where there are gaps when customers are actually wasting energy in their buildings. A very simple example is instead of setting the temperature at 23 degrees Celsius making it 18 degrees Celsius. There is a big saving of energy that will happen. For many customers, specifically in Saudi Arabia, when energy used to be very cheap, they were not aware of this. A simple awareness campaign that you could run in your building will always help you to increase your efficiency. For one of our customers, we did an implementation of basic concepts in terms of changing the operation and we succeeded in bringing him more than 40% savings on his energy bill at the end of the year by just adopting a few techniques. We have also entered into the engineering part where we study the systems, we introduce new systems, we recommend to the customers that they need to replace systems that are operational when the cost of ownership is more than the cost of replacement. We always do the kind of asset management and provide reports to our customers, showing them their assets and how much they are costing them, then the total cost of ownership compared to the cost of purchase of your asset and the replacement of the asset. These are concepts that many facility management companies talk about, they want to implement, but in order to implement them, you need to always think that your customer is your partner, your customer is someone that is struggling with his business, he wants to bring efficiency to his business, and he wants to reduce his costs. We never take advantage of the uninformed customers, of which there are still many everywhere. You could always go to an uninformed customer and convince him of a concept that he does not need and make him pay a lot of money that does not return back to him in an efficient or effective way. Facility management is a service business. We are not selling products. We are selling virtual things. We are selling a service. It is very easy to fall into the trap that you could manipulate your customers or your customers could even take advantage of you. Being a new company, our staff are young people, dynamic people, and we are very careful with the selection of our people. We tend to select people that have a high level of professionalism and ethical work in order to make sure that we always maintain the interest of the customer first and then the interest of the company second.
What is a success story that you are very proud of?
We had a very interesting success story with one of our customers who was building a mall in an area in Saudi Arabia. It was his first project. He did not succeed in selecting the consultant and he did not consult with a facility and property management company during construction. During the construction and the last stages of handover, he was facing many problems related to the operation of the facility itself and how it could be operated. There were issues that were related to the design. Some architects, engineers, some construction companies like to make these nice facilities that nobody can maintain later or they could not bring the best revenue to the owner. If you are building a mall, your ultimate goal is to generate enough from that mall compared to your investment. He was lucky that we got connected personally with him and I understood his problem. We provided him with a bundle of solutions that are related to the service that we provide. We started with first engaging our engineers on his facility in order to coordinate with the consultants and the project management company and the contractor in order to start with the handover. During that handover, we discovered several issues that he had in his facility that were not going to be discovered unless the mall was actually operated, and then it would have been late to fix them. Then, we discovered that the mall itself was not actually bringing revenue that it is supposed to bring due to the dimensions of the shops that were built, the sizes, and the way they were distributed. So, we worked with his construction company to change the layout to enhance it in order to make it more feasible for leasing in the future. We helped him in obtaining the right permits. We also helped in selecting technologies that would help him in the optimization or the operation of the facility. For example, he was relying on mechanical meters to measure the energy consumption. He was relying on old technology to measure the water consumption. So, we advised him and we helped him select the right system that would help him manage the energy bills and also invoice the bills to the customers. We even helped him with the design of the landscaping in order to not spend a lot on the landscaping itself, but maintain a very nice and aesthetic appearance. Our value becomes much bigger when we get engaged with customers during the construction phase and during the design phase. When facility management enters during the operational phase or when the building is already constructed and is operational, there is little that you can do. You can always enhance. You can always make sure that you optimize your operations. One of our customers owns a mixed use property. He wanted to self operate his property. He was collecting rents from tenants himself and he was maintaining the facility with his team. For him, the revenue that was coming from rent collection was not even enough to cover the expenses of the facility itself in terms of cleaning and maintenance. He asked for our help and we engaged him with a proper property and facility management plan where we succeeded to increase his revenue by 20% during the time when in Saudi Arabia it was the most challenging time in the market to increase revenues of rents. Recently, the whole world is suffering in the real estate market. We helped him increase the revenues and we provided him with a very cost efficient facility management operation that helped him to make good net revenues on his total income from rents. Facility management companies could be providing a very nice cleaning service but if this very nice cleaning service is costing the customer a lot of money, it does not make sense. You could also be spending a lot of money and not having the right service. There is always a way that the right facility management company should provide the best value for money. One of our customers had a facility that is 40 years old and he wanted to make his building a smart building. He was willing to invest and to spend money on that. We helped him understand first of all that some investments do not pay back. If you spend on something that is very fancy, but it does not bring you money, you should not do that if you are operating in a business concept. I always sit with our customers and I always understand their problems, their concerns, and what they want to achieve. We always help them achieve the best thing that could provide for them in a sustainable way. Some of the solutions that you could think of are not sustainable. Recently, for example, some customers are actually introducing robots in their facilities, but that was not a sustainable solution. It is something that you introduce and after six months, eight months, you do not maintain it and the robot is not actually providing the service that it requires. We do not like to just bring the technology because we want to bring the technology. We need to always bring the right technology that turns into a benefit to everyone.
What is your short to medium term vision for Takamul AlOula Facility Management? What are you hoping to achieve?
My vision for TOFM is also a personal vision as well for where I want to see the facility management market in Saudi Arabia. I was very lucky that I was one of the first people that started working in the facility management industry in Saudi Arabia. I was very lucky that I actually participated in implementing facility management strategies in very prestigious projects in Saudi Arabia. My vision for the company is that I want the company to be a contributor in most of the iconic projects in Saudi Arabia, that we are asked by name to participate in these projects. My vision is that one day we are actually wanted as a company. The competition in Saudi Arabia is very fierce and I want my company to be playing at a different level, out of this competition in a level where customers trust us, where they know that their facilities are in good hands. This is something that I can see happening in three to five years. If we are committed to what we are delivering today, we need to maintain our commitment and our resilience and we need to maintain our standards. We are facing a lot of challenges that are related to many areas. I want my company to be a pioneer in delivering facility management services with local talents. One of the most important challenges that the facility management industry is facing is that it is an industry that hires much fewer locals and much less local content than it should. This is due to the types of jobs that are in the industry. We are hoping that one day, the facilities of Saudi Arabia are going to be maintained, secured, and cleaned by Saudi Arabian nationals. We want to elevate the awareness, not only with the customers. We are looking towards university graduates and technical institute graduates. We always try to increase their awareness and make them understand the importance of being part of this industry. It is an industry that is related to sustainability and a sustainable country cannot be sustainable unless it is maintained by its own people. That is one of the main visions that we have in our firm and one of the most important things that we try to achieve.
For more information, please visit: https://tofm.com.sa.
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