FM Outsourcing is Here to Stay

Feb. 25, 2014
It’s important to understand this trend so you can identify strategic sourcing relationships or consider careers at third-party firms.

Once perceived to be a threat in the FM world, outsourcing is now a valuable tool that owners can use to run a better facility and FMs can use to build a better career.

“All of the above can be outsourced,” says consultant Friday. “The most common areas are custodial, landscaping, system maintenance, construction, engineering, and property management.”

Facilities outsourcing began at banks and offices and has expanded to manufacturing, utilities, and healthcare, says JLL’s Browne. “Successful implementation depends on aligning corporate cultures,” he explains.

First identify what strategic sourcing can accomplish. Do you want to reduce costs or staff? Do you want to bring in technical knowledge that you don’t have at your site? Have an end result in mind.

“Then perform your due diligence on potential firms,” Friday adds. “Visit sites and speak with current clients of those firms. View the situation as a long-term partnership. Relationships don’t happen overnight. Be in the driver’s seat.”

Performing this type of assessment can protect FMs from the more negative connotations and outcomes of outsourcing. It’s better to identify a potential task that could be outsourced than to have the decision come down from higher-ups.

“We’ve been fortunate enough to outsource what we feel is appropriate and keep in house what we feel we can do better,” says a corporate facility manager. “Every year we put together comprehensive performance measures and share them with the group and management. Generally, our own employees take ownership, offer suggestions, provide heads-up information, and do a better job.”

Think of it as bringing in specialized partners that perform very specific services. “Hospitals, schools, and offices want to focus on their core business. They’re there to heal patients, help students, or make money. Facilities management is something they think they have to do just because they have a building,” explains Sodexo’s Sherman.

But perhaps the current staff doesn’t have the time or manpower to cover all systems and services. Let the business focus on its core competencies and let someone else focus on those that aren’t, Aramark’s Peterson explains. There is no straightforward way to strike the right balance between internal and external resources. The ownership, performance, and management of assets are dependent on the overall business strategy.

“At Disneyland, most maintenance is performed in-house. The Disney people paint the chips and make sure the production functions because the staff feels ownership of the park. They’re basically cast members,” says IFMA’s Feldman. “Regardless of who manages the facility, make sure they have that same sense of ownership. FM isn’t just a cost center.”

If a pipe breaks at the airport Feldman manages, he calls in an outside plumber because it’s more beneficial. “Electric and mechanical systems can be the same. You want to customize a timely response to a specific instance,” he explains. “Sometimes your staff can handle that, but other times the open market is more competitive.”

If you decide to outsource some or all facilities tasks, make sure the third-party firm is clear on the scope of work and measurements of success. “Articulate your expectations and what constitutes effective performance,” Friday says. “These requirements should be in the request for proposal (RFP).”

If facilities management is outsourced and you end up hired by the third-party service provider – as is often the case, Browne says – consider it an exciting career opportunity.

“The employee comes into an organization where his or her job is core to the business, whereas they were previously in a support function,” he says. “Now they have very specific career pathing and are working with people just like them. It’s mutually beneficial.”

Whether it can help your cause or pose a new path, outsourcing is a buzzword that’s here to stay.

“Fifteen years ago, I thought outsourcing was going to be a temporary thing, and I was wrong,” Friday says. “We’ve evolved to a point of strategic sourcing where people are making smarter decisions.”

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