Professional Development: Strategizing Outsourcing

By Christine McKinlay
From the November/December 2014 issue

In-house facility management executives can encounter some challenges when deciding to outsource their facility management operations. Large or small, this change requires experienced change management. Effective change management can help achieve the benefits, avoid the pitfalls, and create a smooth shift to outsourcing. One of the key areas of change management, and a major motivation behind a company’s decision, is cost savings. Using the expertise and proven skill set of a third-party facility management company helps reduce costs with efficient best practices. Established skills and technology training creates a more skilled workforce. With these best practices, an improved workforce can help guide company efforts toward a more streamlined management strategy.

Two people meeting.
Photo: Digital Vision.

The second area focuses on appropriate staff levels. In some cases, the initial outsourcing agreement addresses one segment of the facility management spectrum. One example is the janitorial staff. While only a small slice of the overall business, it often acts as a gateway to more involved responsibilities. What begins as a janitorial focused initiative soon becomes a completely outsourced team, including janitors, technicians, and facility engineers. This transformation creates a new opportunity for third-party companies to exercise responsibility—in alignment with the client—within all facets of facilities management, including third party vendors.

Experience and comfort level with facilities management differs from company to company. A newcomer to outsourcing should seek guidance throughout the process to create a necessary comfort level to foster communication and build this new relationship. In situations like these, communication and key performance indicators (KPIs) are pivotal. On the other hand, companies experienced in outsourcing retool their facilities management programs regularly to ensure the program is running efficiently. Without marked progress, even the most seasoned companies can trip. Either way, many considerations lead to the final decision to outsource facilities management.

On the surface, the benefits of outsourcing are clear—implementing best practices leads to more efficient, cost saving management programs. But examining further, these programs can serve to create long-lasting organizational changes:

  • Higher service levels. Employee skills and technology training and one-on-one communication with vendors help to develop an improved level of service.
  • Effective time management. An efficient program puts an end to deferred facility care and creates an opportunity for preventive maintenance. This alone saves time and money, not to mention improved safety in the facility.
  • Improved workplace. The indirect effect of improved facilities and better services shines through the occupants. Better working conditions for employees can often lead to increased production.

While the overall benefits have roots in efficiency and savings, outsourced facilities management also directly affects the human element of a facility. However, with these benefits in mind, it’s important to be attuned to common pitfalls, and two hurdles arise when outsourcing—staffing and identifying goals.

The first challenge surrounds staffing. As is often the case with first-timers, the parent company feels a need to maintain the status quo, and a change in responsibility can disrupt these familiar relationships. Existing vendors may no longer be the best option, or a long-term staff member may not fit into the new scheme. Displacement is an issue third-party facility management companies regularly try to avoid. The goal is to take the existing staff and work them into a new model through proper staff evaluations and identifying new skill sets to help shift personnel into new positions.

Unfortunately, a revamped employee base cannot always be one-to-one. Though, it is the outsourcer’s obligation to perform its due diligence to retain as much staff as possible.

To avoid the second pitfall, companies must identify why, and what. Why are they outsourcing? What are the KPIs? Accurately detailing the reason for outsourcing saves the company from a major headache. If it is to instill best practices in the company, the client should know this and keep an open mind. If the main goal is cost savings, they can prepare for the coming changes.

A common issue with the best practices tract is the mindset of “things have always been this way.” Inability (or unwillingness) to change only detracts the process. These unrealistic expectations befall companies that forget the reason behind their need to outsource.

The discussion of the above mentioned background, benefits, and pitfalls all serve one purpose: to help others create a smooth transition. The following five topics are essential to ensuring a smooth transition for any company exploring the outsourcing route.

  1. Communication. To outsource successfully to a third-party facilities management company, the client and outsourcer need to be on the same page from day one.
  2. Get everyone involved. If the decision process ends with the procurement office, something is wrong. By involving everyone, from human resources to operations to the executive suite, all objectives of the company can be identified to help set the appropriate expectations.
  3. Ask the question; draft an action plan. A clearly defined action plan prevents future issues. Some companies regularly customize 300-line item lists before taking on an outsourcing project. Some projects have even warranted 700-line items.
  4. Who’s it for? Dedication to the workers is key. At the end of the day, that is a third-party facility management company’s commitment.
    Christine McKinlay.
  5. Establish performance metrics. These metrics (KPIs) allow the company to evaluate performance and keep reasonable expectations. By avoiding subjective evaluations, the two parties can align themselves towards a common goal.

McKinlay is a senior director of facility management solutions for DTZ, a global provider of property services. She has more than 18 years of facility management experience, including helping clients build, scale, or turn around their mission critical facilities management operations, foundational elements, and core capabilities. Her functional expertise includes Roadmap Development, Operating Process Management, and Operations & Service Delivery Optimization.