| Author – Pulkit Arora, Deputy General Manager – Procurement, Embassy Services
Integrated Facilities Management (IFM) companies are stepping up to offer Procurement as a Service (PaaS) as a strategic solution. Not only does this approach streamline operations, but it also plays a pivotal role in fostering sustainable practices within supply chains.
IFM companies have long been at the forefront of providing comprehensive facility management solutions, ranging from property maintenance to security and beyond. However, with the evolution of corporate responsibility, their role has expanded to include procurement services. Procurement as a Service encompasses a range of functions aimed at optimizing the sourcing process, negotiating favourable contracts, and ensuring compliance with ESG standards.
Contribution to ESG through Sustainable Sourcing
At the core of Procurement as a Service lies the commitment to sustainable sourcing practices. IFM companies recognize that every purchasing decision has broader implications, not just for their clients but for the planet. By leveraging our expertise and network, we can identify suppliers that prioritize environmental stewardship, ethical labour practices, and community engagement.
Sustainable sourcing goes beyond merely selecting eco-friendly products; it encompasses a holistic approach to supply chain management. This includes assessing suppliers’ carbon footprint, evaluating their social impact, and promoting diversity and inclusion within the vendor base. By integrating these criteria into the procurement process, IFM companies can help clients reduce their environmental footprint, mitigate risks, and enhance brand reputation.
Pulkit Arora, Deputy General Manager – Procurement, Embassy Services
Property Management (PM): Leading the Way in ESG-Centric Procurement
Property Management stands out as a prime example of an IFM company that prioritizes ESG-centric procurement. Through our comprehensive suite of procurement services, we empower clients to drive sustainable change across their organizations. Here are some of our key offerings:
AMC Management: PM companies specializes in managing Annual Maintenance Contracts (AMCs) for its clients, ensuring that equipment and facilities are maintained efficiently throughout their lifecycle. This involves routine inspections, preventive maintenance, and timely repairs, which help to avoid unexpected breakdowns and costly emergency fixes. By coordinating with vendors who adhere to Environmental, Social, and Governance (ESG) principles, PM managers not only ensure high-quality service but also align maintenance activities with sustainable practices. This approach minimizes waste, optimizes resource utilization, and prolongs the lifespan of assets, ultimately contributing to cost savings and environmental stewardship.
Tender Management: From drafting RFIs (Requests for Information) to evaluating proposals, PM companies oversee the entire tendering process on behalf of its clients. By incorporating ESG criteria into tender specifications, they encourage suppliers to innovate in areas such as renewable energy, waste reduction, and circular economy practices. Similarly, we also frame such RFPs (Request for Proposal) for ourselves to showcase case studies and our capabilities to potential as well as existing clients.
Negotiations: A PM company’s negotiators leverage their industry knowledge and market insights to secure favourable terms for our clients while upholding ESG standards. Whether it’s price negotiations or contractual agreements, they prioritize partnerships with suppliers who share a commitment to sustainability. This approach ensures that our clients receive the best value while promoting environmentally responsible and socially conscious business practices.
SLA/KPI Management: Service Level Agreements (SLAs) and Key Performance Indicators (KPIs) form the backbone of effective supplier relationships. As Property Managers, we monitor these metrics closely, holding vendors accountable for their performance in areas such as environmental compliance, ethical labour practices, and diversity initiatives. Moreover, the inclusion of a defect liability period further strengthens our vendor relationships and ensures the quality of services rendered. This period allows for the rectification of any defects or deficiencies identified post-delivery, providing both parties with the assurance of a satisfactory outcome.
Bulk Purchasing: By negotiating large-volume contracts with suppliers, they can secure significant discounts without compromising on quality. These companies have established relationships with trusted vendors, ensuring that all bulk purchases meet stringent quality standards. For instance, a property management company might procure bulk quantities of cleaning supplies, maintenance materials, or office equipment at reduced prices. The savings from these bulk purchases are then passed on to their clients, ensuring cost-effective operations. Additionally, the rigorous vetting processes for suppliers ensure that only high-quality products are sourced, maintaining the overall standard of service.
Consolidation: By consolidating purchasing activities across multiple categories such as vendor selection, reviewing proposals based on SLAs, negotiation, agreement, payment terms and disposal of orders, we help clients achieve economies of scale while reducing their carbon footprint. Through strategic sourcing and supplier rationalization, they streamline operations and drive cost efficiencies without compromising on sustainability goals.
Local Sourcing: We recognize the importance of supporting local economies and reducing supply chain vulnerabilities. By prioritizing local suppliers wherever feasible, we minimize transportation emissions, stimulate regional growth, and foster closer relationships between clients and their communities.
ESG-Centricity: Above all, at any Property Management company, with an experience of working across various verticals of real estate we embed ESG principles into every facet of our procurement services. This commitment begins with rigorous supplier assessments, where we thoroughly evaluate potential partners not only on their ability to meet our operational needs but also on their adherence to environmental sustainability, social responsibility, and governance standards. By conducting due diligence through an ESG lens, we ensure that our suppliers align with our values and contribute positively to our sustainability goals.
By embedding ESG principles into procurement practices, we not only mitigate environmental risks but also drive positive social and economic outcomes. Sustainability is not just a checkbox but a fundamental pillar of responsible business conduct. Therefore, we are dedicated to fostering a culture where ESG considerations are integral to every decision we make, ultimately contributing to a more sustainable and resilient real estate industry.
