Outsourcing Facility Management – from a Client’s perspective

Integrated Facility Management Services

The process of purchasing services is more complex than purchasing goods.Facilities Management is a significant cost in most companies. It is vital to reduce cost but consistently improve quality of services. Therefore, choosing the right FM service provider can have a huge impact on a company’s performance.

Since there is a whole gamut of services under the FM umbrella,ranging from Asset Management, Utilities management, Project Management, Contract Management, Human Resources Management, Health and Safety, Building
maintenance, Office support services, Cleaning & Security etc, it is imperative to develop a good relationship between the company and the Service provider to reach their objectives mutually.

There has been significant shift in the client’s (company’s) approach towards service provider relationships over the last two decades. It has moved into partnerships, which is of longer term, involving a mutual exchange of advantages,information and ideas.

As the FM market is becoming more dynamic and competitive, maintaining proximity with FM service providers just to avoid dependency and keep prices down have been replaced by the importance of the benefits that can be gained from developing relationships.

Why Clients prefer an ideal FM Partner?

In my opinion clients enter into partnerships with an FM service provider not merely to ensure the service provider delivers value to their organisation. The values they look for varies based on their core activities which might include:

2.Economy of scale
3.Effective risk management
4.Reducing costs but not quality
5.Brand / face value of the service provider
6.Technology, the service provider brings along
7.Increasing their customer satisfaction (CSAT) scores
8.Expertise, skills and domain knowledge
9.More focus on customer’s want rather than what the service provider can do

The one who is proactive and demonstrates differentiation from their competitors through their capabilities, expertise in the particular segment, quality of services and value they could deliver at a reasonable cost will be a successful FM service provider.

Sourcing strategy for FM Services

Customers might look at three different strategies before partnering with an FM Service provider.

1.For a long-term contract- stability , capability to deliver quality services consistently and solution that meets organisation’s demands

2.For a short term (less frequent- one-time)- efficiency and cost.

3.A strategic partnership approach is chosen when the importance of a service is high for the client organisation, services are complex requiring to share sensitive and strategic information or the purchasing volume could be high.

In recent times sourcing teams have become more aggressive, armed with domain knowledge and tools like e-sourcing, reverse auction and effective vendor negotiations.

However, I feel that outsourcing would be more successful if the sourcing teams put themselves into the service providers shoes and think rationally on the cost against the value and the solutions proposed by a prospective service provider than looking only at the cost as the evaluation criteria.


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