Outsourcing: Focus On Core Competencies

By Lisa Stanley

Outsourcing services is no longer a question of “should we or shouldn’t we?” but more a question of “how much should we outsource to improve performance, and with whom?” It’s about a clear focus on the core competencies of your organization, and identifying the best fit with service providers to meet your organization’s needs. Outsourcing provides flexibility and economies of scale for contracted products and services with a goal of reducing costs and improving efficiencies.

outsourcing services
Credit: Digital Vision.

This approach requires an assessment of your current strengths and weaknesses – the core competencies and the critical skills needed to optimize performance. What is the true cost of acquiring these skills to achieve or exceed the level of desired performance? Service providers are increasingly business partners with shared responsibility and accountability for improved performance. Mergers and acquisitions in the marketplace have expanded their range of services and expertise.

Significant investments have also been made by service providers in IT platforms to expand the business intelligence that drives decisions at every level of the organization. This includes the introduction of artificial intelligence (AI) to platforms that can replicate human analysis and critical thinking. AI is a major disruptor that will provide transformational change in how FM is performed.

Best Of Breed

End users often use the term ”best of breed” to describe what they are looking for in their business partners for a wide range of products and services. It’s difficult to discuss outsourcing without invoking best of breed as a favored approach in the marketplace. Best of breed implies multiple sources of services and flexibility that enables the end user to change services and service providers to meet their changing needs.

While end users advocate “best of breed” as an a la carte approach to services, some of the biggest service providers are buying expanded expertise for a variety of services to provide a one-stop approach to meet this demand, including acquisition of benchmarking services, consultancies and more. The outcome of the service providers “one-stop shop” approach and the market’s desire for best of breed has yet to be determined.

Challenges To Best Of Breed

Multiple service providers collect information on multiple platforms that often speak their own language, making it difficult if not impossible to exchange information across companies and platforms. The lack of interoperability makes the “best of breed” approach challenging for all including the end user, often requiring considerable manipulation of data and analytics for decision making. Multiple platforms collecting data is an environment that demands standards to be effective. Common terms and definitions must be in place for this approach to provide the information needed.

Who drives the demand for standards? It’s the customer – end users who start with a requirement for standards in their RFPs. They follow them up with contracts that specify a standardized approach to collect and analyze the information derived from the data collected that transcends proprietary platforms. This approach provides multiple benefits including:

  • Effective risk management
  • Reduced operating costs
  • Competitive advantage – concentrate on what you do best
  • Single source of truth for information management

Workplace And Workforce Productivity

Outsourcing can provide a means to effectively address both the workplace and workforce productivity. Is the workplace providing the optimum environment for productivity, and does the contract provide for flexibility to address the changing needs of the workforce? Managing change and meeting expectations of an ever-evolving workforce is now a mandate in the work environment. There is more opportunity for advancement within companies and elsewhere, with top talent negotiating every aspect of their employment package. This includes the work environment whether a home-based office, remote assignment, traditional office or a blended approach.

Will these changes move the discussion more to a value-based versus cost-based approach for services? There will be continuing pressure to differentiate services and improve performance with qualitative and quantitative results. The game changer may well be end users who demand more control over their own data regardless of the platforms used.

outsourcing servicesStanley is the CEO of Open Standards Consortium for Real Estate (OSCRE International), a membership-based, not-for-profit organization committed to the collaborative development and implementation of global real estate data standards. She is also the author of Global FM: Opportunities For Best Practices.