Models for Outsourcing Facilities Management

As the overall marketplace becomes increasingly competitive, businesses must find ways to tighten their proverbial belts. One common strategy is outsourcing non-core activities, and facilities management is often an area ripe for outsourcing to a third-party service provider.

Depending on your business, the size and expertise of your facilities management staff, and cost-cutting goals, you can select one of multiple outsourcing models to achieve the optimal balance of quality and cost.

Service Models

The level of service available to companies can range from outsourcing a single area, such as janitorial, to comprehensively outsourcing all your facilities management tasks. McKinsey & Co. outlined five tiers of service models available:

  • Out-tasking. Companies choose to outsource specific functions only. This might include janitorial, landscaping, accounting, or maintenance.
  • Consolidation. Businesses that operate in multiple buildings or geographic locations can request the same individual service at all their sites in exchange for a lower contract price.
  • Standardization. Service levels across an entire organization are defined and standardized to a minimally acceptable level.
  • Bundling. Similar to consolidation, bundling outsources multiple services to a single service provider who can then offer a lower overall price.
  • Full outsourcing. In this case, the third-party service provider becomes a full-fledged partner to the business, providing all facilities management services. 
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Outsourcing Facilities Management

Outsourcing facilities management can deliver a wide range of advantages for a business. Management and employees can better focus on their core mission, leaving the running of the facility itself to a third-party solution provider whose core mission is to manage the operations and buildings for customers like you.

Facilities maintenance may take on a central role in this agreement as the preventive, reactive, and predictive maintenance tasks required to keep any building running smoothly, safely, and comfortably for its occupants can be a significant task.

Just like overall facilities management, the maintenance component can be broken down into individual parts, each of which could be managed in-house or outsourced. Lower-level tasks such as janitorial can be shifted to an outside vendor as well as specialized maintenance such as plumbing or electrical. Maintaining and managing a building’s heating, ventilation, and air conditioning (HVAC) system is another area that is commonly outsourced to a partner specializing in HVAC systems.

This can free up in-house maintenance staff to manage, repair, and maintain equipment or assets unique to that company. For example, industrial organizations may operate complex or specialized machinery that requires regular inspection, repair, or service. Retail buildings may rely on facilities management to help with merchandising, supply chain movement, or customer assistance. Residential buildings such as apartment complexes may rely on facilities managers to respond to resident maintenance requests, monitor common areas, and maintain landscaping, parking lots, and walkways.

Integrated Value and Related Services

As the industry grows more complex, businesses are beginning to integrate facilities management into other related services to increase value, optimize management, and improve the performance of all services.

One related service is real estate, which traditionally includes purchasing, selling, building, and expanding a physical campus. Managing everything from the planning of a project or purchase through all construction phases to transactions and payments has fallen under this category. However, discussing things like energy management, building design, and security systems straddles both real estate discussions and future facilities management responsibilities.

Another area is facilities maintenance, which is often considered part of facilities management. Both are intimately intertwined when it comes to maintaining a building as well as its equipment, machines, and systems.

Energy management often plays a big role in facilities management, which is responsible for utility utilization. Implementing, installing, inspecting, and maintaining motion detection systems, automatic thermostats, or renewable energy sources, such as wind- or solar-powered adjuncts, can become a significant part of facilities management. 

For industrial or manufacturing businesses, production maintenance and management can be closely related to facilities management. Ensuring that production lines maximize uptime and minimize unplanned downtime is a key factor in how profitable a manufacturer may be in any given week. Technology can play a significant role here.

Finally, many of the services provided to meet the needs of employees may cross over to facilities management as well. For example, companies that provide cafeteria services, a fitness center, or wellness and nursing services can require support and assistance from facilities management.

When these services are well integrated and work together like a well-oiled machine, the business achieves greater overall value. If reporting lines are streamlined, it can mean fewer decision-makers need to be involved in the process, and the company can have a better picture of how all of these services are working together.

Some third-party solution providers can deliver integrated, value-added, comprehensive services that help companies outsource all of these functions. Such vendors become truly strategic partners, working together to help the organization achieve its core mission.

Making the Decision

Each organization needs to evaluate all of these outsourcing models to determine which, if any, would be the best fit for its situation. A few considerations include:

  • Cost. Compare the costs of running facilities management in-house against the costs of working with a strategic partner. Look at what the competition is doing and see where your organization falls within best industry practices.
  • Locations. Take into account where your company has buildings or plants. Consider the feasibility and value provided by having a single strategic partner manage all your locations.
  • Organizational Capabilities. Think about the current structure of your facilities management organization. Do you have a single individual or a team? What are their areas of expertise and how much bandwidth do they have to manage the current demands? Compare the investment required to manage these demands with the cost of outsourcing.

Kroeschell Facilities Management

For more than 140 years, Kroeschell has delivered superior facilities management services for small and large businesses alike. We’ve worked with building owners and facility managers of industrial plants, restaurants, stores, offices, universities, and residences around the United States. Kroeschell helps them keep their buildings safe, secure, comfortable, and operating at optimal levels to support their organization’s mission. 

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