By outsourcing all of your FM function to a single supplier will you liberate your organisation from a financial burden and admin nightmare? Or will you just give away control?
Total facilities management, the outsourcing of the entire FM function can be a tempting prospect for some businesses who want to streamline their estate management in a radical way.
For some companies, admitting your core-competence is not FM and letting someone else take responsibility for it, can feel like you’re freeing up resource, outsourcing risk and giving you space to focus on strategy.
The arguments for TFM
- Levers economies of scale
- One point of contact for all the services your receive
- Saves money on employing dedicated FM teams
- Accesses expertise unavailable to smaller teams
Is outsourcing facilities management to TFM firms actually cheaper?
On the face of it, outsourcing your FM services to a single supplier with access to a reservoir of specialist subcontractors means you can access all these services at a cheaper rate. But the real world experience isn’t always that way.
Often the outsourced company will simply not be able to guarantee enough work to their subcontractors to get the discounts they need to pass on savings to their clients. This, together with mark ups for everyone else in the chain, will mean services end up costing the same or more than if the end-client was negotiating the deal directly themselves.
The client company might now be able to operate with a slimmed down layer of FM on their end, but they’ve also sacrificed a layer of FM knowledge and direct contractor relationships in a way they may regret later on.
At the mercy of a supply chain of unknown complexity, the ability to lever extra savings from their new FM partner can be limited.
Does quality suffer with TFM outsourcing?
It’s true that many businesses who outsource the whole of their FM to a third party can experience declines in the standard of work. With teams covering large geographic areas and multiple clients there can be delays in attendance and variable quality delivered. Across multi-regional sites you might have different subcontractors delivering the same service in very different ways. If you’re going down this route you need a water tight SLA and reporting mechanism to guarantee the service levels and response times you need. Inevitably, outsourcing to a big company in areas where they’ve not traditionally had expertise means quality can be patchy - no one company can be expert in everything.
Carillion is the classic story of overstretch and collapse, where quality and sustainability was strained to breaking point in the search for cost savings by everyone involved.
What about your access to data?
If you’ve outsourced to a big service provider, your access to data may become more limited. Your access to granular details within a work order may be restricted due to it not existing or simply restricted by permissions.
It’s not uncommon to find that the subcontractors reporting line up to your TFM provider dilutes what is available. All you may see is a limited number of line items against the services rendered each month. In the end you might be left with no clear idea about how those costs are broken down, or if it really represents value for money.
Where’s the legal liability?
When you’re outsourcing to a single entity, you should remember you’re definitely not outsourcing your compliance responsibilities. They still continue and you need oversight. The maze of sub-contracting and sub-subcontracting that goes on can end up in messy and unclear chains of liability. Ensuring that everyone in a chain of outsourced suppliers are compliant with H&S legislation, can be as much your responsibility as your primary outsourcing partner. Famously Swan Hunter faced a massive fine for failing to ensure that their contractor’s subcontractors (Telemeter) were fully aware of the risks involved in maintenance in their workplaces. When one maintenance job went disastrously wrong and several people died, Swan Hunter were found liable for their contractor’s failure to protect Telemeter’s workers.
Has TFM changed?
Some of the traditional arguments against the total facilities management model have been challenged recently with technology significantly improving the levels of service and visibility they can offer at scale.
These companies are starting to give their partners more access to data through innovative technology. They are promising access to a world of automation, AI, IoT sensor tech and tracking technology.
This is making them more agile and responsive in their service delivery. They are cleaning up their act with more transparency in their reporting.
What’s the true cost of TFM?
If your TFM provider owns the data, the tech and the engineer relationships, are they only leasing you the control and insight that should be yours alone?
Wouldn’t it be a more future proofed approach to own all these yourself? To plug your business directly into the insight, technology and relationships that will bring you access to more cost savings and, even, revenue opportunities.
At the moment, though, the technology blackhole at the centre of many FM teams is stopping businesses taking full control of this opportunity.
FM is not a cost centre. It’s a business case
But a new generation of CAFM platforms are changing this.
They are FM platforms that are becoming more intuitive, easy to set up and accessible in price.
With mobile portals for contractors, built in helpdesk software, workflow automation and integration with financial and business management systems - they are helping businesses to self manage complex supply chains.
They are giving FMs the tools to access critical data and manage supplier relationships directly to achieve best value:
- Source quotes / choose best value suppliers
- Benchmark supplier performance to optimise roster
- Shift between contractors and suppliers to optimise performance
- Capture critical supplier / FM data to measure performance and track trends
- Exercise finance and cost controls - to maximise revenue opportunities
- Integrate with workplace tech - to access and share new insight
- Integrate with finance systems - for holistic reporting
- Integrate with BMS - for an automated, proactive and predictive approach to FM
- Control compliance - for watertight H&S and evidencing
- Report back to the C-Suite - to drive a data-driven strategy that aligns to key business objectives
Before you outsource your entire FM function, businesses should consider if they’re giving up the control that could be their unique competitive advantage in the future.
