By: Phil Gregory
Outsourcing Facility Management (FM) can deliver excellent results if you have realistic expectations, plan well, make use of appropriate approaches and insist on excellence in execution. However, many companies do not see the results they envisage. Ensuring there are no fundamental flaws in your outsourcing strategy, dispelling myths and knowing how to select a suitable outsourcing partner are essential first steps.
The Myths of Outsourced FM
It’s a myth that outsourcing is all about cost savings. Cost savings is just one part of the business rationale to outsource; outsourcing a non-core function also allows the business to focus on its core business. Another myth is that a company will lose control over the function that it outsources. The reality is that with the right partner, you have far more control — you relinquish a non-core component of the business to a FM specialist, which usually results in a better managed facility.
The term outsourcing is often confused with off-shoring, which is what a company does when it outsources a function to a provider in a different country. The principal reason to ‘off-shore’ is to perform a function at a lower-cost in a different country. However, this should not be mistaken with global partnerships. Within the FM context, they can be hugely beneficial, allowing multinationals to roll out a globally aligned FM strategy from head office to all country branches with the outsourced partner having a presence in the countries. The most successful partnerships are built on long-term relationships that offer strategic value and provide on-site staff to ensure efficient and cost effective running of the facility.
Mistakes in Outsourcing FM
There are a number of common mistakes made in outsourcing FM. Although cost savings is an important consideration, any outsourcing contract worth its salt needs to add value – e.g., making the workplace more productive and flexible — and that value must be measurable.
It’s also a mistake to try to outsource if there’s no real management buy-in. It is important from the outset to recognise the cost and resource requirements of transition for both partners. Both sides need to invest in resources to ensure a smooth transfer of operations. Timely and effective communication is the key, particularly if there is an in-built resistance in the outsourced organisation. And in the case of several hundred employees transferring from client to provider, which is often the case with FM. Selecting an FM outsource partner with a strong track record in change management may be as important as finding one with a good cultural fit. Companies need to make sure that their outsource partner understands their organisation and their peoples’ needs. And being culturally aware is particularly important if you are outsourcing on a global scale.
If done correctly, outsourcing gives companies access to specialist experience and skills, but it should also be prepared to adapt its own approaches.
Today, outsourcing FM is viewed by multinationals as a deliberate business strategy for non-core activities that deliver clear business benefits, like access to accurate data to support informed management decisions regarding a company’s second or third largest cost, this includes its buildings. The right partnership will also provide immediate access to industry-specialist resources to help implement change programmes, such as those needed with acquisitions.
The company outsourcing a function should gear its management team to implement and manage outsourcing properly. With clear expectations and visibility, there will be no perceived loss of control over these aspects of the business.
Understanding FM, and more specifically outsourced FM, will assist to realign businesses’ expectations. Clarity of purpose, awareness of tangible and measurable benefits, and an experienced partner that can deliver to global standards, will ensure the promise of outsourced FM is realized. It is important to never settle for less.
About Johnson Controls
Johnson Controls is a global diversified technology and industrial leader serving customers in over 150 countries. Our 162,000 employees create quality products, services and solutions to optimize energy and operational efficiencies of buildings; lead-acid automotive batteries and advanced batteries for hybrid and electric vehicles; and interior systems for automobiles. Our commitment to sustainability dates back to our roots in 1885, with the invention of the first electric room thermostat. Through our growth strategies and by increasing market share we are committed to delivering value to shareholders and making our customers successful. In 2012, Corporate Responsibility Magazine recognized Johnson Controls as the #5 company in its annual “100 Best Corporate Citizens” list.
Phil Gregory is Senior Regional Executive Johnson Controls Global WorkPlace Solutions: Middle East & Africa
For additional information, please visit http://www.johnsoncontrols.com.