What to look for in outsourced Facilities Management

| 0 Comments
facilities.jpgManaging an organisation’s operational environment normally involves an ‘unholy alliance’ between facilities management (FM), procurement and the users of the buildings, with pressure coming from finance to reduce costs.

A common comment from many of Purchasing Index’s (PI’s) clients is that FM is a thankless task – users never thank you for getting it right but are all too ready to complain, Alan Low of PI tells SmartProcurement.

Over the next few months PI will be publishing a series of articles based on the findings of their benchmarking services over the last 12 years within the South African corporate world.

It is rare these days to find organisations that hold FM services in-house.

Many of the larger organisations have or are looking to outsource to a single contractor, who then uses sub-contractors to do the specific work. PI is aware of several organisations that are currently reviewing these existing, single-outsource arrangements.

Some of the issues include:

  • Does the organisation actually measure and manage the service level agreements (SLAs) that are in force?
  • Are the SLA measurements still relevant? What other measurements, key performance indicators (KPIs), should be included?
  • Does the contractor apply the same SLAs to their sub-contractors? Does it measure and manage the subs?
  • Do the service providers suggest and initiate innovative practices? How does the approval process work? Are these projects managed to see what benefits they provide?
  • Why are costs increasing above the inflation rate?
  • How do we innovate, particularly around new, greener and energy-efficient initiatives?

Management of this complex supply chain is time consuming and requires up-to-date information.

FM staff often end up micro-managing specific issues (particularly when complaints have been raised by management) – reacting to problems, rather than looking pro-actively at improving the service, instituting innovations and ensuring that there is an accord between the services delivered and their internal customers’ needs.

To manage a moving target one requires good information and appropriate measurements.

PI’s view is that the following needs to be in place:

  • KPIs and information needs to be shared with contractors and sub-contractors – everyone needs to see the same, reliable data. Time is essential here: late service is poor service. Does your organisation share data with service providers seamlessly and do they share information with you? Do you have a control centre in place? Does it measure and manage what is relevant and important (not necessarily ‘urgent’)?
  • Building occupiers are under constant pressure to contain costs and initiate new (green and energy efficient) measures. Do your service providers regularly bring new initiatives to your attention? Do they suggest how these could be implemented in your environment?
  • Many contractors benchmark their costs from building to building. Do they share these with you?
  • Most contractual arrangements have a finite life. But putting large outsourcing agreements out to tender is expensive and time consuming. How can you use external benchmarks to prove that the current arrangements are efficient and cost effective and so justify a continuation of the current contracts?

It is PI’s view that customers and service providers need to share information – successful outsourcing arrangements are partnerships where the outsourcer is an extension of the organisation it serves. Relevant and timely information needs to be collected and shared (both ways); service providers must understand the organisation’s ever-changing strategy and requirements.

Too often service levels are high just after contracts have been implemented and just before they are due to be renewed; in between the service performance is unsatisfactory.

If you are interested in participating in PI’s benchmarking services and adding to the scope of the benchmarks, please contact Karen van Staden (Karen@pibenchmark.co.za) or Alan Low (alan@pibenchmark.co.za).

Leave a comment


SmartProcurement Newsletter
X

Please enter your details below to receive the SmartProcurement Newsletter for FREE on a regular basis.

As part of the SmartProcurement Newsletter you will be receiving World Class Procurement News, Tools, Tips, Tactics, Procurement Training updates, Upcoming Events, and the latest Procurement Career Openings.

* Email Address:
* Title:
* First Name:
* Surname:
* Company:
  Position:
* Country:
* Public / Private:

 

Career opportunites

Demand Planning Manager

  • <500 000 Gauteng Operations, Planning & Inventory Projects / Category Management
(Total Cost to Company R750k - R900K) excluding ...More

Global Category Manager: CONTRACTS

  • <500 000 Buyer Commodities Contract Gauteng
Total Cost to Company R1mil - R1.2mil excluding

Project Manager :12-18 MONTH CONTRACT

  • <500 000 Contract Procurement Officer / Specialist Projects / Category Management
Description:A well-known retail organization is looking for an ...More

Procurement Analyst

  • <500 000 Analyst Gauteng Permanent Procurement Management
Description:A leading infrastructure development group with strong presence ...More

Commodity Manager: Fuels and Lubes

  • <500 000 Commodities Gauteng Permanent Strategic Sourcing
Description:Ensuring continuity of supply in line with business ...More

Senior Facilities Manager

  • <500 000 Gauteng Operations, Planning & Inventory Permanent Projects / Category Management
(Total Cost to Company R800K - R900K) Description: ...More

Supply Chain Analyst

  • <500 000 Analyst Permanent Supply Chain Western Cape
(Total Cost to Company R350K - R550K) SOUTHERN ...More

Demand Planner

  • <500 000 Gauteng Operations, Planning & Inventory Permanent Supply Chain
(Total Cost to Company R450k - R550k, dependent ...More

Procurement Specialis

  • <500 000 Gauteng Permanent Procurement Management Procurement Officer / Specialist
(Total Cost to Company R700k - R800k including ...More

Solutions Architect

  • <500 000 Analyst Gauteng Operations, Planning & Inventory Permanent
(Total Cost to Company R1.3Mil - R1.1Mil including ...More

Engineering Manager

  • Gauteng Industrial Engineer Permanent Procurement Management
Total Cost to Company R850k - R950K including ...More

Country Head of Procurement

  • Permanent Procurement Management Procurement Officer / Specialist
https://careers.peopleclick.com/careerscp/client_gsk/external1931/gateway.dofunctionName=viewFromLink&jobPostId=359235&localeCode=en-us CBS Procurement,Hub Head of Procurement To lead, ...More

Demand Planner

  • <500 000 Gauteng Operations, Planning & Inventory Permanent Projects / Category Management
https://www.tech-pro.co.za/pages/jobdetail.aspx#!Gauteng/Planning/Demand%20Planner/TP2005490/MSe Category: PlanningPosition Title: Demand PlannerSalary: R600 000 ...More

Head of Procurement

  • <500 000 Gauteng Permanent Procurement Management Procurement Officer / Specialist
https://www.tech-pro.co.za/pages/jobdetail.aspx#!Gauteng/Procurement/Head%20of%20Procurement/TP2005488/ZBuCategory: ProcurementPosition Title: Head of ProcurementSalary: R1.3 million ...More

Warehouse and Distribution Manager

  • <500 000 Gauteng Logistics & Warehousing Permanent Supply Chain
https://www.tech-pro.co.za/pages/jobdetail.aspx#!Gauteng/Logistics/Warehouse%20Distribution%20Manager/TP2005455/TMa Category: Supply ChainPosition Title: Warehouse and Distribution ...More

Supply Chain Manager

  • <500 000 Mpumalanga Permanent Procurement Officer / Specialist Supply Chain
https://www.tech-pro.co.za/pages/jobdetail.aspx#!Mpumalanga/Supply%20Chain/Supply%20Chain%20Manager/TP2005448/LMa Category: Supply ChainPosition Title: Supply Chain Manager ...More

Industrial Engineer

  • <500 000 Gauteng Industrial Engineer Operations, Planning & Inventory Permanent
https://www.tech-pro.co.za/pages/jobdetail.aspx#!Gauteng/Consulting/Continuous%20Improvement%20Manager/TP2005489/SNh Category: ConsultingPosition Title: Industrial EngineerSalary: R900 000 ...More

Operations Manager

  • >500 000 Gauteng Operations, Planning & Inventory Permanent Supply Chain
Our client within the FMCG industry with a ...More

Warehouse and Distribution Manager

  • >500 000 Gauteng Logistics & Warehousing Operations, Planning & Inventory Permanent
An exciting opportunity awaits for a Warehouse and ...More

Demand Planner

  • <500 000 Permanent
Get an opportunity to be part of one ...More