While other industries digitise at speed, many mid-tier FM firms are still held back by outdated systems, paper processes and reactive maintenance models that quietly drain millions every year.

The UK Hard FM market is set to grow from £18.67bn to £19.80bn by 2027 (Baachu Rain). Steady growth, but meaningless if margins stay thin and compliance pressures rise. The truth is unavoidable: the sector is losing money not because of market conditions, but because of legacy thinking.

And modern software could unlock extraordinary value almost overnight.

The hidden cost of “good enough”

Reactive maintenance remains one of the biggest financial black holes in FM, costing several times more than preventative work. But without the digital infrastructure to support asset tracking, automated scheduling and predictive analytics, preventative maintenance simply doesn’t scale.

Add in manual scheduling, unnecessary engineer travel, scattered data and systems that don’t talk to each other, and the result is significant revenue leak. Many FM firms could save millions by replacing fragmented workflows with modern integrated systems.

Compliance pressures are rising, and manual processes are no longer viable

Building safety, energy efficiency and workplace regulations have tightened exponentially. Firms must produce flawless audit trails, inspection logs and asset histories, yet many still manage compliance on spreadsheets or paper.

A single missing document can cost a contract. Grant Thornton’s market analysis shows investors increasingly favour FM companies with strong technical capability. Digital maturity is no longer a nice-to-have, it’s a requirement for survival.

The big players are modernising fast

Major FM providers are already using IoT-enabled asset tracking, AI-driven scheduling, digital twins and advanced CAFM systems. They are transforming how contracts are priced, delivered and monitored. Mid-tier firms, constrained by ageing IT, risk being left behind.

But the real competitive advantage sits with those who modernise first. Mid-tier FM firms can leapfrog traditional systems entirely by investing in software built around how they actually work, gaining agility the big providers can’t match.

Why bespoke software is becoming FM’s most valuable asset

The same roadblocks appear across the sector: reactive maintenance, poor real-time visibility, inefficient scheduling, fragmented reporting and rising ESG and compliance demands.

Bespoke software removes these barriers by fitting the organisation instead of forcing it into rigid off-the-shelf tools. When systems reflect real working practice, preventative maintenance becomes reliable, labour utilisation improves, compliance automates itself and asset data becomes genuinely useful.

And crucially, the ROI isn’t theoretical. For many firms, it appears within months.

Sustainability pressures are accelerating the digital shift

Net-zero demands mean clients increasingly expect FM partners who can measure energy use, optimise assets, track carbon output and report on environmental performance. The surge in sustainability-focused acquisitions, such as Activ8 Energies’ move into the UK low-carbon market, reflects where the sector is heading. Without strong digital infrastructure, FM firms will not meet future client expectations.

A defining moment for Hard FM

Annual growth may be around 2%, but the sector’s future won’t be defined by size, it will be defined by efficiency, digital capability and the ability to scale without risk.

The question for mid-tier FM companies is simple: Will you be the firm that modernises and saves millions, or the one that gets left behind?

The next era of Hard FM won’t be won by the businesses with the most engineers, the largest contracts or the biggest estates. It will be won by the companies willing to rethink their digital foundations today.

Propel Tech works with businesses across facilities management, construction, manufacturing and property to modernise, develop and maintain bespoke systems that enhance real working practice. Discover more about our work, or please feel free to reach out for a chat.