Outsourcing the Facilities Management function: a cleaner house

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Rob Stuart.jpgIn today’s competitive global workplace organisations are challenged with providing their staff with working environments that offer practicality, stimulation and comfort in order to attract and retain the best possible talent in the marketplace. One of the fundamental drivers of providing staff these aspects sits within the organisation’s Facilities Management (FM) space.

FM can be defined as an interdisciplinary field primarily devoted to the maintenance and care of large commercial or institutional buildings such as hotels, resorts, schools, office complexes, sports arenas or convention centers. Duties may include the care of air conditioning, electric power, plumbing and lighting systems; cleaning; decoration; grounds keeping and security. Some or all of these duties can be assisted by computer programmes.

It is the role of the Facility Management department to coordinate and oversee the safe, secure and environmentally-sound operation and maintenance of these assets, in a cost effective manner with the aim of long-term preservation of asset value.

There are options available to keep your house clean for which you don’t have to pay an arm-and-a-leg. Real opportunities do exist within the FM realm and with careful consideration and greater fit-for-purpose thinking this area can deliver huge financial benefits, Rob Stuart, a Procurement Specialist at Volition Consulting Services, tells SmartProcurement.

Although the FM commodity is often seen as non-strategic in certain organisations, it can make up a large part of budget expenditure and can also influence the reputation of the organisation among employees and clients. The main service areas where the bulk of risk and cost sit are within the following five overall services:

• Cleaning (Can make up 50%-75% of total FM spend)
• Security (Can make up 50%-75% of total FM spend)
• Lifts / Escalators (Can make up 25%-50% of total FM spend)
• Air-conditioning / heating (Can make up 25%-50% of total FM spend)
• Fire Detection and Protection service (can make up 0%-25% of total FM spend)

Within these main service types, two distinct operations need to take place on a daily basis to ensure consistent service levels deemed acceptable to both the business policy and regulatory requirements, across a given portfolio:

• Firstly, the procurement of these services, which can vary from a contracted service such as maintenance to ad-hoc procurement of services, must be structured to deal with exceptional business occurrences.

• Secondly, management of the supply base needs to ensure that required service levels are met and, most importantly, manage and understand costs.

Performing procurement functions across the portfolio offers an enhancement of economies of scale in purchasing and a drastic improvement in service level standardisation and costs. However, it must be remembered that scoping such contracts can be difficult and, therefore, the portfolio must be properly understood. A typical exercise to undergo, especially with larger portfolios, is a due diligence in terms of costs, service levels and asset registries to tie these costs together to identify possible opportunities. These will greatly improve an organisation’s contract scoping and ultimately its costs.

There are various options available to manage the supply base. The most common one currently found within the South African environment is in-house management of service and suppliers through an in-house FM team that can consist of Facilities Managers and Building Managers with support functions such as HR, Finance and Compliance all assisting to ensure consistent measurement and visibility of costs and service levels. There exists a large engineering factor within the five main services listed above and this may not be resourced by a large majority of organisations.

However, global best practice is moving towards outsourcing FM operations as this is widely becoming considered a non-core business function for many large scale organisations.

Globally, a large number of outsourcing partners exist, however, this number is smaller in the South African environment as it has not yet matured. Although certain large South African Government agencies have developed and outsourced some of the critical FM functions, it is still an uncommon practice to outsource these functions at a large scale in South Africa.

Although it may be felt that performing these tasks in-house offers greater control and visibility, the system offered by outsource partners can greatly improve on this and offers real savings opportunities and management information. The most important tool within any FM function is the information one can draw from the systems in place. This significantly assists management in shaping strategic thinking and identifying opportunities such as space optimisations and supply base savings across an entire portfolio.

Volition Nov.jpgSome of the pros and cons of going with an outsourced option can be seen here:

For more information contact Rob Stuart on 011 259 4380 or email him at rstuart@volition.co.za

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