Outsourcing Facility Management
Outsourcing facility management is a difficult step for most facility managers. Outsourcing facility management has the potential to save your organization money if done right, it also has the potential to harm your ROI if you outsource the wrong task to the wrong outside vendor at the wrong time.
Facilities management can account for 10 to 25% of total indirect cost for organizations with scattered activities (retailers, manufacturers, transportation, and logistics). Several recent developments, such as recession worries, trade wars, technological upheaval, and rising salaries, have made cost saving a bigger emphasis in this sector. However, corporate executives must strike a delicate balance in order to minimize non-essential expenditures without jeopardizing key operations performance.
Companies have a variety of choices at their disposal to reduce facility management costs. Outsourcing is a well-established method that is growing in popularity as a result of an inflow of vendors, and integrated approaches to facilities management, workplace planning, and technology all offer potential. Outsourcing accounts for more than half of overall revenue and has attracted an increasing number of suppliers with new service offerings. Nonetheless, defining a clear way forward—one that allows businesses to extract the maximum value—is becoming an increasingly difficult undertaking.
Outsourcing facility management – The evolution of facilities management strategy
When firms are under constant pressure to decrease operational expenses, they often hunt for reductions without giving much regard to the long-term consequences. Because of this dynamic, facilities management is an especially attractive target. Companies cut facilities management expenditures during difficult economic times; when the outlook improves, spending levels frequently remain low. This tendency can lead to worsening building and equipment conditions, potentially costing more in the long term.
Over time, industries have come to consider outsourcing as a realistic alternative for non-core activities such as facilities management. Companies often follow a continuum that begins with outsourcing noncore tasks at particular sites and progresses to global outsourcing. With the consolidation, standardization, and bundling of these operations across facilities over time, a full range of non-core services and management is outsourced to third parties.
Let’s discover what are the Pros and Cons of Outsourcing facilities management :
Pros of outsourcing facilities management
Money and Time saving
The vendor you select will be highly specialized in facilities management infrastructure and facilities services, which means they will already have an efficient set of procedures in place that are tailored to your specific requirements. They are equipped with the required equipment, personnel, and training, allowing you to offload those costs when you opt to outsource. According to research, outsourcing facilities management services may help you save up to 10-15% on annual costs, so if you’re on a tight budget, outsourcing may be a substantial advantage for you.
You may be confident that an outsourcing provider specializing in particular parts of facilities management (such as L.E.E.D compliance or building renovations and maintenance) has the core knowledge and skills required to offer high-quality services. Outsourcing specialized projects is an excellent method to get experience with the process and assess vendors without outsourcing a major portion of your facilities management services.
It is critical to assess where your team excels and where it may use some assistance. If your staff lacks experience in a certain trade or kind of equipment, you may outsource your weakest facilities management responsibilities, allowing your team to focus on what they do best. Trying to learn how to execute a service on something you’re unfamiliar with takes a significant amount of time and effort, so consider all of the key business operations your staff can do with their additional time.
Cons of outsourcing facilities management
Less control over operations
If you have a specific aim in mind for how you want a project to be done, working with an in-house team is far easier than working with an outsourced business. Each vendor will decide how to offer their services and manage their staff, reducing your influence over the operations. Creating a clear contract based on CMMS KPIs (key performance indicators) such as cost/energy savings, work order response/resolution time, and so on will help mitigate this risk and allow suppliers to maintain a competitive edge while doing the job for you.
Lack of knowledge about your organization’s needs
A vendor may be inexperienced with your company’s operations, equipment, or facilities in general. A comprehensive grasp of these factors is critical for outsourcing success, therefore if the service provider does not make an effort to become acquainted with your unique facilities management requirements, you may want to consider other possibilities.
Because the vendor you hire will be working with a variety of different companies, their time will be split among more projects than simply yours. While many providers can handle many clients, you should ensure that the vendor you hire can adhere to your predicted timetable. Request referrals and assess customer happiness.
What steps should I take to outsource facility management?
Some people believe that facilities management outsourcing tales are not very successful. According to polls, one in every four outsourced facilities management services is brought back in-house within two years. So, what makes the remaining 75% successful? Take a look of what to do and don’t!
Don’t: Implement your own maintenance procedure. The vendor you hire already has a list of best practices, and if they can’t accomplish the task the way they know best, you won’t get the desired outcomes.
Do: Specify the expected outcomes and service provision. As a result, the suppliers may apply their best practices to ensure that your project achieves the desired results.
Don’t: Get too caught up in price or cost cutting. A cost-cutting choice may help you initially, but in the long term, the vendor may prioritize your work for someone who is paying more for their services, causing an increase in operational costs.
Do: Balance the expenses and advantages. You don’t want to spend more money on outsourcing your services than your budget permits. So, be sure you’re neither overspending or underspending. It all about finding the perfect place!
Don’t: Outsource just short-term, one-time projects. While certain suppliers can be used for these short-term tasks, it can be advantageous to engage the same vendor on a regular basis. For example, if you don’t have a full-time plumber, you might opt to outsource all plumbing operations to a vendor rather than just replacing your old toilets with new dual-flush toilets. This allows them to become acquainted with your equipment and operations, which will assist you in the long run.
Do: Create a relationship with your vendor. As you are probably aware, maintenance difficulties seldom occur when it is most convenient for you. A facilities management team may be short-staffed at times and will need to seek assistance from someone outside of your crew. When these sorts of events happen, having reputable sources you can trust may make all the difference, so make sure you establish strong connections with your vendor and their staff.
Outsourcing facilities management should be done only when it improves the efficiency of your procedures. Use a vendor exclusively for things that your in-house team does not excel at, and execute the rest in-house.
Recognizing seasonal surges in your labor is a useful approach to locate services to outsource in addition to identifying work that needs to be improved.