FM Frequency: On Outsourcing—Do We Sink, Or Do We Swim?
By Jeff Crane, P.E., LEED® AP
Published in the May 2004 issue of Today’s Facility Manager
For those of you who may have missed it, TFM‘s January issue included a piece about “The Reality Of Facility Management Outsourcing” [by Maria Vickers; request a copy of the article by sending an e-mail to firstname.lastname@example.org]. After reading the article, I wasn’t a bit surprised to see letters to the editor regarding the piece.
My goal this month isn’t to place labels on an organization’s decision to outsource specific functions or entire departments. These are complex considerations, and there are plenty of arguments on both sides of this emotionally charged issue.
Understandably, I would bet that most readers’ opinions are based on personal experience or influenced by the author of their paycheck.
But rather than argue about whether outsourcing facilities is a good or bad idea, I think the more appropriate thing to do is recognize that it’s a reality, regardless of popular opinion. It’s also important to recognize that the people working for outsourcing providers are actually the professional colleagues of in-house facility professionals, not the enemy.
It’s somewhat ironic to rationalize a facility manager’s decision to outsource specific functions like landscaping or janitorial services (changing the name and calling it “out-tasking”), but then cringing when considering a CFO’s decision to outsource (or out-task) facilities management. One might argue that out-tasking is acceptable in the landscaping/janitorial example because, after all, using contracted services in these instances are so much more convenient than staffing and managing them in-house, right? At times, don’t facility professionals even choose to lease property instead of buying land and building corporate owned facilities? But if those things pass our collective “smell test,” (“if it smells like a rat…”) isn’t it also logical to argue that a gal or a guy above our pay grade (like a CEO or a VP of human resources) might feel the same way about facilities management?
Think about it. When was the last time you actually saw a big cheese extolling the virtues of “lock out, tag out” procedures or MSDS at the 19th hole of the local country club? And really, how many CEOs would it take to change a compact fluorescent light bulb? (Sounds like the start of some sort of corny joke, doesn’t it?) Here’s a mind bender. Could a CFO punch a chiller tube without breaking his or her hand? Aw, come on. You have to give me a chuckle for that one, and you better credit me when you retell it!
But seriously, outsourcing is an enormous consideration with excellent alternatives on both sides, as long the analysis is approached honestly and executed correctly. I’m sure we would all agree (or maybe we’re in the wrong field) that an in-house facilities or real estate group with appropriate representation in the boardroom and at the budget table can be a valuable asset to any organization. But for some reason, it seems harder to reach consensus on a similar justification for a company without these valuable internal resources (by choice or by chance) deciding to engage an experienced third party to deliver state-of-the-art properties and facility management services.
Unfortunately, what can happen is that organizations fail to support or fund in-house real estate or facilities functions properly. When these functions don’t have advocates in the boardroom and at the budget table, it gets easier to consider the benefits of outsourcing. Single points of contact, space and resource flexibility, and Wall Street’s secret way of influencing that “revenue per head” metric can all be considered reasons for outsourcing.
And it’s not just facilities either. IT, HR, security, accounting, customer support, even product development and sales people have become potential targets for the outsourcing model. Wasn’t it Scott Adams (Dilbert’s brilliant creator) who predicted companies of the future would have only one employee and would outsource everything, including the executive committee and board of directors? Imagine the incredible revenue per head ratio Mr. Gates could boast if all his employees were contractors!
If you are part of an in-house facilities group and are concerned about having your group outsourced, I have a suggestion (don’t forget that you get what you pay for with free advice): consider taking the bold and proactive step of conducting a facilities services RFP. Take a look around and see what it would actually cost your organization to outsource some or all of your function.
If you suspect your company will consider this some day anyway, wouldn’t it be better for you to write the specifications about the services you provide and then proceed to interview and qualify potential suppliers? You could do this research and have it on the shelf in case the topic comes up. Or you could choose to present a thoughtful analysis of your research to your boss.
Is it possible that your superiors might consider this a sign of your ability to think like a higher level leader? Might this kind of research demonstrate your comprehension of the political and economic realities that your organization faces? Could your initiative get you a seat at the decision making table? Maybe, maybe not, but it’s something to consider.
I understand that emotions run high on this topic. But it’s important to realize that outsourcing is not a new idea and it’s not one that’s going away soon, despite the political grandstanding we’re likely to see this fall. For some organizations, outsourcing makes no sense, while for others, it is a necessity.
But look, we’re all in this boat together. Trying to label outsourcing in blanket terms of “right” or “wrong” or “good” or “bad” is about as useful as rearranging chairs on the deck of the Titanic. Isn’t it a better idea to look for an inflatable raft instead?
Crane is a mechanical engineer and regional property manager with Childress Klein Properties, a leading real estate developer and property management services provider in the Southeast.
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