Outsourcing facilities management services: Benefits and potential downsides

By Jones Lang LaSalle Property Consultants

Many businesses are employing outsourcing strategies to improve their competitive advantage and focus on core activities. One of the biggest growth areas for outsourcing is in the field of facilities management, but it is a discipline that is rife with potential misconception leading to missed opportunities and unsatisfactory outcomes. This brief analysis of facilities management sets out to answer the question of whether you should be considering this outsourcing strategy, the types of services available, the benefits to your organisation and some of the potential challenges that you might face.

There are a number of established facility management models in practice, all with unique advantages. Businesses may choose ‘single service outsourcing’ where one specialist service provider delivers just one service, such as security, or cleaning. An alternative model is to ‘bundle’ two, or more outsourced services, but industry research highlights that 65% of managers prefer a single reference point, or organisation, managing all of the different components of service provision and that there is a clear trend towards total, or integrated facilities management, where economies of scale and operational efficiencies allow for greater conservation of financial and personnel resources. 

Facilities management services are split into two sections. Hard services are ones which relate to the physical fabric of the building and cannot be removed. They ensure the safety and welfare of employees and, generally, are required by law. Soft services are ones which make the workplace more pleasant or secure to work in. They are not compulsory and can be added and removed as necessary. Carrying out a Facilities Needs Assessment will help you to identify which services are actually needed by the organisation and which are unnecessary.

In terms of physical spaces, the efficiencies from outsourcing can apply to operations from a single retail outlet or entire shopping mall to commercial office buildings, mixed use projects, public buildings or manufacturing plants.

Foremost amongst the many potential benefits to an organisation, that outsources facilities management services, is retaining the ability to focus on core business, while reducing operating costs through efficiencies and procurement controls. Another is the acquisition of marketable benefits, an example of such being outsourcing call centre operations and improving customer services to a point where it becomes a selling feature, specific to that company.

Other benefits may extend to reduced operating costs, through enhanced procurement protocols and other efficiencies, improved management control, the acquisition of best practice systems, including new technologies and increased operational flexibility.

While there are many potential advantages to outsourcing facilities management services, it is important to understand some potential pitfalls, especially as performance measurement can be unreliable and expectation for short term goal delivery may not be realised over standard accounting periods. Performance standards are often measured in terms of service failure and complaints, but the least difficult matrix to quantify is price/cost saving, so long as cost saving is aligned to the organisation’s overall strategy and is used to support transition and provide funds for acquisition or expansion. When outsourcing, an important management tool is the setting of clear and measurable KPIs, but these do need careful monitoring if maximum advantage is to be realised.

Specialist service providers can not only rationalise staff, but also give you access to leading edge technologies and state-of-the-art machinery for grounds maintenance, cleaning, security, mechanical and electrical services, waste disposal, etc.

A further benefit is that, by outsourcing to a properly vetted specialist, you can be confident that your service provider is experienced in attracting and retaining the best qualified service personnel, applying industry best practice, adopting the latest service enhancements and ensuring compliance with an increasingly complex regulatory environment.