The challenge of managing multiple contractors and the lure of economies of scale are driving many towards consolidating more of their FM contracts with fewer and fewer suppliers. But what are the strengths and weaknesses of single-service, bundled and Total Facilities Management approaches?
Right now 69% of the market outsources more than half of their facilities services. And only 6% of facilities services choose to deliver them entirely in-house. Although the trend to embrace TFM has slowed in recent years, for companies of a certain size, the appeal of outsourcing all the risk and complexity of multi-site FM management is strong. At the last count around 12% of all FM contracts were based on a TFM model.
But which outsourcing model is right for you? What are their pros and cons?
In the single service model companies look to appoint and manage a range of specialist FM service providers to work with them. In this ‘best of breed approach,’ the company outsources to known suppliers and directly handles procurement, contracts and day to day relationship management.
In the bundled scenario, companies are looking to rationalise their suppliers by bundling together three or four similar services to be dealt with by one contractor. There might be a few types of services bundled (typically split between hard and soft FM services) and dealt with by different suppliers.
In the Total Facilities Management model a company places all the responsibility and the risks associated with FM service provision into the hands of one company.
Outsourcing to a single operator means companies can cut internal FM teams and reap the benefits of economies of scale. Freed from the burden of everyday FM management, they can work with their TFM supplier on the ‘big picture’, focusing on data analysis, broader cost saving initiatives and other strategic objectives. That's the theory, anyway.
In house FM teams retain complete control over multiple contractor relationships:
Bundles of related services are outsourced to specialist providers:
All your FM services are outsourced to one contractor:
With a highly resourced TFM supplier, companies might expect better access to data platforms to report on KPIs and technology that smaller suppliers won’t be able to offer
In the past a typical journey for many businesses has been to move from Single Service to bundled services to a TFM scenario. Although in the wake of the collapse of Carillion, the faith in large scale outsourcing has been shaken. If you can potentially lose access to your entire FM services overnight, then is that a risk you should really be prepared to take?
The challenge of managing individual relationships with multiple suppliers is one that many businesses simply haven’t wanted to embrace. And the challenge of doing this in a large multi-site company with premises spread across the country can add to the pressure.
That said, while TFM and other supplier consolidation solutions can offer compelling cost saving opportunities, they often require sacrificing control over relationships and data that can stand in the way of long term service improvement and optimisation.
But modern CAFM systems are giving companies and Facility Managers the opportunity to bring multiple supplier relationships under much closer control, through single software solutions.
The new FM platforms that are emerging are automating and integrating processes and systems to bring previously fragmented data together in one place at the touch of a button. They have powerful communication and data analysis tools that make managing and benchmarking multiple suppliers more intuitive and straightforward.
And where once companies might have felt they had no choice but to sign up for contracts with super-size suppliers, there is now an alternative.