Exploiting the benefits of outsourcing facilities management

The challenges of outsourcing facilities management — Chris Kenneally
CHRIS KENNEALLY shares his views and experiences of making outsourced facilities management a profitable and successful experience.'I don’t want to go in a room where the light’s not working. If I do, I want to know what the problem is and when it will be fixed. It’s a combination of information and implementation and I don’t think that’s too much to ask.’ That’s how an FM manager attending one of our open days summed up what he expected from his FM supplier. And the outsourcing company that can deliver that type of customer service efficiently, on a day-to-day basis, will prosper in what is still an expanding market Best practice Between 1998 and 2002, the UK facilities-management market is estimated to have grown by 35% to about £95 million. During this time the proportion of TFM undertaken in-house has fallen from 39% to 36%. Meanwhile, the market share of the work contracted out has risen in the same period from 55% to 57%. By 2007, the value of the overall market is forecast to rise again, by 15% to £109 million. To capitalise on this growth and ensure that the trend towards outsourcing continues requires an innovative approach based on providing a genuine alternative to the incumbent supplier at an acceptable price. Where an outsourcing company ought to be at a competitive advantage is not just through economies of scale, but in adopting a ‘best practice’ approach based on its experience and expertise working with a diverse customer base. This should be immediately apparent in the management of contract transition. A successful mobilisation depends on a co-ordinated approach led by a dedicated account-management team. At the outset one of the most important steps is to ensure the smooth transfer and integration of the incumbent staff via TUPE (Transfer of Undertakings [Protection of Employment] Regulations 1981), where it applies. This requires a good deal of skill and dedication to ensure that employees fully understand what their options are, remain in control of their own careers and stay motivated. It is important to treat employees individually, rather than en masse, as significant benefits can be gained from retaining the skills and on-site facilities expertise of existing staff. Linking this inside knowledge with a fresh outlook incorporating the innovative use of technology, and a commitment to saving time and cost are areas where the outsourcing company can genuinely make a difference. Mobilisation can be enhanced by advanced asset data collection using wireless handheld devices specifically configured for each contract. Efficient automated information gathering and its utilisation can reduce mobilisation timescales by as much as 30%. If a ‘mobilisation manager’ is seconded to the contract for an initial six month period, this also helps ensure continuity. Bridging the information gap Ensuring customers are better informed about their property portfolio than ever before is an integral part of a successful outsourcing working relationship. The key to this is operational transparency allowing real-time visibility of job status across the board. Investment in the latest IT and engineer support improves work allocation and reporting, allowing operatives in the field to confirm job completions to the system more quickly. This in turn means customers and dedicated account teams can access real-time performance information via a private Internet portal, thereby improving communication across every aspect of operations. At this stage the benefits of an integrated approach become clear. The initial asset data gathering programme allows the creation of an accurate inventory, enabling planned preventative maintenance (PPM) programmes to be put in place quickly. As well as tracking work orders and requests for on-demand maintenance, the system schedules preventative maintenance and manages facility resources. The proof of the pudding… What makes FM such an exciting market for outsourcing is that providers are judged on their performance on a 24/7 basis. Customer service is a make or break issue and for those companies that do deliver there is an excellent opportunity for not just customer retention, but also incremental growth. A case in point is GSH’s recent expansion of its successful partnership with HBoS Plc, the UK’s largest mortgage and savings provider. A contract for 1200 of the company’s retail sites encompassing a number of leading high street brand names has recently been agreed. This takes GSH’s HBoS property portfolio to over 650 000 m2. A key selling point was satisfaction with existing FM delivery over a 4-year period and commitment to customer service and innovation. It is that type of customer feedback that is the best possible advertisement for FM outsourcing. Chris Kenneally is UK managing director of GSH Group Ltd, Forge Lane, Stoke-on-Trent, Staffs ST1 5PZ.
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