Thought Leadership: Peter Hawes examines the benefits of outsourcing
- Credit: Archant
The private sector has long realised considerable benefits from outsourcing, not only in efficiency and cost-saving terms, but also in allowing those businesses to stay focused on their core activities.
However, in the prevailing tough economic climate outsourcing the management of an organisation’s facilities has become increasingly more strategic.
Facilities management (FM) now needs to not only deliver cost savings but to contribute to business success and help to deliver competitive advantage. As such it has become the focus for issues surrounding best value and customer satisfaction within non-core, supporting services.
Facilities management essentially falls into two prime classifications:
1 Hard FM, which includes areas such as building and grounds maintenance, and servicing and maintaining equipment essential to the fabric of the premises such as air conditioning, plumbing, the electrical supply and lifts and building control systems.
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2 Soft FM, which covers cleaning, catering, waste management, reception duties, administration functions and security.
When evaluating suppliers for outsourcing any aspect of FM, proven experience in delivering services efficiently and within agreed budgets is the key factor.
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However, as has been clearly demonstrated through a number of high-profile local authority cases, the terms and conditions of any agreement must work for both sides: driving the FM supplier’s costs down can jeopardise the long-term stability and sustainability of the contract. At best this can cause key performance indicator levels to suffer; at its worst it can force through potentially unprofitable arrangements that could result in expensive disruption, or discontinuation of service supply, through suppliers going into liquidation part way into the contract term.
Innovative thinking is not usually associated with FM outsourcing, but there are companies around that offer greater flexibility and more pioneering approaches, such as the forming of Joint Venture Companies.
These ‘partnerships’ work best where a range of services are outsourced to a single, multi-discipline provider. Such arrangements tend to provide a ‘shared-goals’ approach that can work far better than the traditional contractor/supplier relationship.
But even for smaller, single-service processes, outsourcing can often realise real benefits simply by removing the administrative burden.
: : Peter Hawes is managing director of Norse Commercial Services.