Why Punt to an Outsourcer?
Things to think about before you hand the FM ball over…
If you’ve been following along in our prior posts (on the huge amount of waste & inefficiencies in the facilities marketplace, here; and and our recalculation – it’s even more than we thought – of that amount) we have been talking about how modern, technology-forward service automation solutions can replace legacy methods for facilities maintenance to drive lower costs AND higher quality.
Undoubtedly one of the biggest drivers of the inefficiencies that exist today is the practice of outsourcing facilities management to vendors who do not have the processes, data, transparency, systems – or motivation and incentives – to drive ongoing improvements.
Let’s double-click here and explore a bit of the detail and source of these legacy “outsourcing” inefficiencies, as there are some significant disadvantages to these models compared to maintaining responsibility for your own facilities repair and maintenance services:
Cost – One of the primary selling points that outsourcers promote is substantial cost savings. However, in most cases, these promised costs savings don’t materialize, or certainly not to the extent anticipated. And in fact, costs can actually end up higher even when including any savings from a smaller facilities management group, from this added, external management layer.
No Visibility / No Data – A critical element missing and often not initially appreciated when migrating to an outsourcing model is the fact that there’s usually no longer any view into how your money’s being spent and what level of service you’re getting. One of the reasons that outsourcers can’t provide detail on their – actually, your – spend easily is because they don’t have the data. We’ve heard from many companies that soon realize they have virtually no visibility into their spend detail and have no idea on exactly what they’re spending their budget.
Loss of Control – With neither visibility nor data, you no longer have the ability to monitor what’s happening across your locations, benchmark yourself against standards and are unable to take necessary actions like implementing best practices to improve service. Without data, you’re flying blind.
Contractor Relationships – In a facilities management outsourcing relationship, someone else now owns the relationship with the contractors working at your locations. You no longer can select those contractors with which you want to do business; even excluding those with whom you don’t wish to work can prove difficult. More importantly, you no longer have the ability to have contractors compete for your business on price or performance.
Time Inefficiencies – Without control of your contractors, you may end up with new contractors at your locations each time who are not familiar with your facility and/or equipment. This can result in your or your staff’s time being wasted to bring new contractors up to speed. New contractors without any historical knowledge of your environment are also likely to take longer to perform service requests, and this extra time will surely result in greater costs.
Life-cycle Impact – Contractors with whom you don’t have relationships (and that don’t have corresponding relationships with you) are likely to be more ‘quick fix’ oriented and not focused on the long term life/performance of your equipment and facilities. While such an approach may seem faster or cheaper at first, in most cases this is likely to prove more costly in the long run.
Increased Risk – One issue with outsourcers that’s difficult to quantify but that could end up proving quite costly is the increase in your risk to which your company’s exposed. With third parties responsible for what’s happening on your site and directly impacting your customers and employees, there’s numerous compliance, legal and regulatory issues that can impact you.
Contractor Coverage – In most cases, outsourcers don’t have a comprehensive network of contractors to maintain a portfolio of distributed locations, particularly a geographically dispersed one. Getting complete coverage of vetted contractors for every location can often prove difficult, if not almost impossible, when you don’t drive the contractor sourcing process.
Brand Uptime / Brand Compliance – Regardless of someone else’s promised commitment to your business, no one else is as focused on maintaining your brand as you and your team are. When you put the health of your stores or locations (your ‘store uptime’) in someone else’s hands, you’re basically putting the perception of your brand (your ‘Brand Uptime’) in someone else’s hands as well. In today’s hyper competitive environment, maintaining control of your operations and ensuring a superior customer experience is paramount.
Hidden Costs – Another factor to consider when evaluating outsourcing relationships is the visibility into the pricing model. Often the outsourcer is simply ‘buying the budget’ and it’s not clear how you are being charged. Fees typically are not provided with any granular detail so there’s no way of knowing exactly what is being charged and what extra costs are simply bundled into your monthly invoice.
To fully understand the potential jeopardy you’re putting your company in from outsourcing your facilities management program (and your company’s reputation), I’d recommend checking out our whitepaper, What Are the Pitfalls of Outsourcing Your Facilities Management.
Bottom line – outsourcing your FM functions effectively “outsources” your responsibility to drive a superior quality level and customer experience – do you really want a third party to own that responsibility on your behalf?
Only with service automation and FM software technologies, can you take true ownership of the level of service delivered to your customers and what they experience when visiting your locations and sites. Because in an era of seemingly infinite choice and alternatives, quality issues leading to poor customer experience will drive your customers away, causing irreparable harm to your business.
Thanks – feedback and comments always welcome!