Executive Summary

The facilities management industry stands at a critical inflection point. Based on Baachu’s research identifying 74 critical issues facing the UK FM sector, this white paper examines how industry’s foundational problems—from poor data quality to workforce devaluation—must be resolved before AI can deliver genuine value. With only 8% of top UK FM firms possessing structured data, AI risks becoming just another passing trend rather than a transformative solution.

 

Introduction: The State of FM

For over a decade, I have led Baachu’s facilities management market research, delivering data-driven insights on market trends, pricing, and operational performance. Our “Why the FM Market is Screwed” series exposed the financial and structural weaknesses of FM, particularly after COVID-19 revealed the industry’s vulnerability.

The FM market faces four fundamental problems that no amount of technology can solve: a data problem, a people problem, a credibility problem, and an identity problem. Yet rather than addressing these core issues, the industry is now jumping headlong into artificial intelligence.

My recent presentation at Workplace Futures brought these concerns into sharp focus. The overwhelming response from attendees confirmed what I’ve long suspected: these aren’t just my concerns—they’re widely recognised problems that the industry has been reluctant to address openly.

 

BI Before AI: The Data Problem

The foundation of any successful AI implementation is quality data—yet only 8% of the Top 80 UK FM firms have structured, centralised data at all levels of their operations. This isn’t merely a technological gap; it’s a fundamental barrier to AI effectiveness.

Despite the industry’s focus on data, FM consistently fails to collect, manage, and utilise even basic operational and corporate information. The harsh truth is simple: No data, no intelligence.  AI models are only as good as the data they use—and FM’s data is woefully inadequate. Without fixing its data issues, FM’s AI efforts will remain superficial, offering promises it cannot deliver.

 

Hard Truths: The Credibility Problem

From our research identifying 74 industry challenges, here are four critical issues that undermine FM’s credibility. 

Public sector insourcing is at its peak, while incumbency is at its lowest levels. Government organisations are increasingly bringing services in-house, fundamentally challenging traditional FM business models.

£1.5 billion of FM spend is misclassified every year, creating significant challenges for market analysis and operational planning.

 

Frontline FM workers feel more connected to the client than their own employer—highlighting a severe failure in workforce engagement and employer identity

The commercial value of UK FM contracts has collapsed—falling from 1.0 in 2015 to 0.3 today—making UK companies cheaper to acquire due to inherent risks. 

These aren’t isolated issues—they are systemic failures that make meaningful innovation impossible. FM’s credibility is eroding because it consistently fails to meet fundamental expectations.

 

A Crisis of Identity: The Industry That Missed Its Moment

During COVID-19, FM had a once-in-a-generation chance to prove its value and cement frontline workers as essential—alongside healthcare and critical infrastructure. Instead, we stayed in the shadows, hiding behind consultants while our workforce kept the country running.

FM had the perfect opportunity to step up—and we failed. We weren’t seen as essential because we never fought for it. We let others define our worth, and they decided we weren’t critical. If FM wants recognition, it needs to stop pretending and start acting like it matters.

 

FM Lost More Frontline Heroes Than Any Sector After Healthcare—And We Did Nothing.

During the pandemic, 600-1,200 FM frontline workers died keeping essential facilities running—more than any sector except healthcare. We lost cleaners, security staff, engineers, porters—people who risked everything to keep hospitals, public buildings, and workplaces operational.

What did we do? Nothing. No national honour, no industry-wide recognition, no permanent tribute. We moved on as if their sacrifice never happened.

Should I keep waiting, or should I act?

I have taken the first step—launching the Fallen FM Heroes Register. After the Workplace Futures conference, I began listing hospitals across the UK and will be reaching out to identify those we lost.

I had hoped to do this in collaboration with the industry, but I have little faith that FM companies will share this information. So, I’ve decided to do it myself.

FM can either continue ignoring its own or finally take responsibility—not with words, but with action. Do we accept this failure, or do we step up and fix it?

If you’re ready to step up, drop me a line.

 

The Trend-Chasing Syndrome

The FM industry exhibits a dangerous pattern of jumping on every trending topic without seeing initiatives through to meaningful implementation:

In 2020, pandemic safety measures were implemented, then quickly forgotten. In 2021, hybrid work models were tried but lost momentum. The 2022/23 period saw Net Zero and sustainability initiatives generate big promises but minimal transformation. Now in 2024/25, AI and Data Analytics risk becoming another ephemeral distraction.

This isn’t adaptation—it’s reaction without direction. Going with the flow isn’t progress—it’s lack of direction. Without a clear identity, FM will always be chasing, never leading.

 

The People Problem: An Industry That Disdains Its Own Operations

Site visits, once critical to understanding service delivery, are now LinkedIn PR exercises—a quick photo, a handshake, and back to the boardroom.

Marketing talks endlessly about customer experience but rarely speaks to the people who deliver or receive FM services. Procurement negotiates multi-million-pound contracts without understanding the realities of site-level execution. Finance enforces cost cuts without seeing the operational chaos they create. MDs and CEOs sign off on strategic decisions without ever stepping on-site to witness their impact.

This isn’t misalignment—it’s wilful detachment. FM strategy once emerged from frontline realities. Now it’s dictated by executives operating in a vacuum, disconnected from the people and services that keep facilities running.

The result? FM has lost its identity. We broke it ourselves by turning away from the very operations we claim to manage. To fix it, leaders must get their hands dirty again.

 

The Asset Register Paradox: FM’s Fundamental Failure

Every FM provider claims sophisticated Computer-Aided Facility Management (CAFM) systems, yet virtually no client possesses a reliable asset register. This becomes painfully evident during every tender process, where asset data consistently proves wrong, incomplete, or outdated.

 

If FM is so ‘great’ at engineering, why can’t the incumbent keep an accurate register? Why does every new FM provider have to verify assets post-contract? And why do the numbers never match?

The industry faces another complication with SFG20. What began as BESA simply providing a maintenance standard has morphed—they now claim to offer SFG20 software for building asset registers. Yet despite this, asset registers remain unreliable, forcing FM providers to conduct costly reconciliations when taking over contracts.

This reality raises a critical question: If FM can’t even manage basic asset data—the foundation of its engineering services—how can it realistically implement AI and predictive maintenance? The industry isn’t ready for artificial intelligence because it hasn’t mastered asset intelligence.

 

FM’s Net Zero Silence on AI

The facilities management industry positions itself as a leader in sustainability and Net Zero initiatives. Yet, it remains conspicuously silent about AI’s significant environmental impact. Consider these contradictions:

• Gen AI adoption is below 1% industry-wide, yet AI data centres already emit more CO₂ than Russia
• FM firms call themselves Net Zero experts but ignore AI’s growing carbon footprint
• No FM firm includes AI’s energy consumption in sustainability reporting

This selective approach to environmental impact extends beyond AI. Sustainability reporting has become an industry built on inconsistencies and greenwashing, with no common reporting standards and widespread manipulation of metrics.

FM claims leadership in sustainability, AI, and digital transformation—but never connects these dots in meaningful ways. If the industry can’t even measure impact properly, what exactly is it claiming to achieve?

 

The Leadership Vacuum: Who’s Really Running FM?

Industry bodies appear increasingly outdated and unfit to lead FM’s future. Meanwhile, private equity firms have quietly taken control of significant portions of the UK FM market, with PE firms and private investors indirectly controlling 20% of the sector. These investors typically operate on 3-5 year investment cycles, prioritising acquisitions for revenue gap filling and maximum profit upon exit.

This financial reality shapes industry behaviour in profound ways. FM isn’t failing by accident—it’s failing by design, driven by financial models that prioritise short-term returns over long-term sustainability.

 

A Call to Action: Fixing FM’s Foundations

At Baachu, we’ve built AI implementation frameworks, delivered 18+ AI consultancy projects, and developed deep expertise in FM, AI, and large language models. We know AI can work—but only if FM stops hiding behind technology and starts fixing its foundational issues.

For AI to deliver genuine value in facilities management, organisations must:

1. Visit operational sites: Every FM leader based in head office must reconnect with operations and understand the environments they’re trying to transform. Take one day every 2 months to visit an operational site. Talk to your people who work there. Understand their challenges and use those insights to make better decisions. And please, no selfies 
2. Honour frontline workers: Establish proper recognition for the workforce, including a memorial for those lost during COVID-19. We must document fallen frontline heroes then let’s use World FM Day (14th May) to share stories of frontline heroes, ensuring every FM worker and the industry feels seen and valued.
3. Implement proper BI before AI: fix the fundamentals first. Establish reliable asset registers, implement proper business intelligence, and address contract performance before attempting AI implementation

Conclusion: Beyond the AI Hype

As I reflected after the Workplace Futures conference on 25th February: ” Until the industry solves its real issues, artificial intelligence will remain another expensive trend with minimal results.

 This isn’t about being anti-AI—it’s about using AI the right way, at the right time, for the right reasons.”

Next year, I want to stand before the industry and present our progress—along with the next set of findings from our ongoing research (we still have 65+ issues to address

The choice facing the industry is stark but simple: continue chasing trends while ignoring foundational issues, or honestly confront these challenges and build a sustainable future.

 

AI won’t fix FM. FM needs to fix itself first. 

 

Baskar Sundaram CEO, Baachu