Which Outsourced Facility Management Model is Right For Your Business?

5th November 2020

In facilities management, outsourcing is an important function that can optimise operational efficiency and savings from hiring and managing an in-house team. Outsourcing takes away the burden of recruiting and handling staff.

Additionally, contractors bring specialised skills and tools to your team–no lengthy or costly training needed. Because of these boons, increasingly more companies are turning to outsourcing, according to research firm McKinsey.

However, the decision to hire out is not quite black or white. Some companies choose to fully outsource, while some may only outsource one particular department or location. Maximising the value of your expenditures means knowing which model is right for your business. Below, we’ll talk about the different partnerships you can have with your outsourced service provider.

Single Services

This is your traditional FM service model, which many people outside the industry may think of first when they think of facility management. Under the umbrella are basic functions such as security and sanitation. We’re also seeing more core-related services such as compliance and customer service helpdesks.

Under this model, an organisation hires one or several contractors to take over different functions. The main advantage of this scheme is being able to hire specialists who are excellent in one area, instead of jack-of-all-trades companies that may only be average across the board. Companies also enjoy greater control, which may be appealing when dealing with sensitive functions such as security.

The challenge of using single services is managing the integration of the service, contracts, and payment separately. Managing one or two contractors may not seem like a lot for small businesses, but for enterprise-level organisations the complexity of hiring several single service contractors may offset the quality they can bring to the table.

Bundled Services

Under the bundled service model, companies can outsource to a single company that offers several services together. Often these partnerships are cheaper compared to hiring several contractors, and much easier to manage. Unlike single service offerings, the delivery of bundled services can be managed and overseen by the contractor, further improving their cost-efficiency.

Standardisation is also a notable benefit from the bundled services model, especially for larger organisations. Although single service is the least complex to work with, arrangements become more difficult to manage across sites. Working with one supplier across locations ensures you can maintain the quality of service.

Lose of managerial control and visibility into the work is a common risk with bundled services. Many providers further subcontract services that they consider their weaker areas, which means that there may still be several entities managing your facilities, only less visible to the organisation. Companies who want to work only with a single contractor will want to search for providers who bundle related services.

Integrated Facility Management

Integrated Facility Management (IFM) is relatively new in facilities management, and therefore its definition can feel nebulous. Many struggle to differentiate IFM from Bundled Services, as both models aggregate related fields into one service.

Strategy is where IFM and Bundled Services split. Under IFM, vendors aren’t only service suppliers, but active partners who support a business beyond providing a team for cleaning or security detail. An IFM partner will look at other success metrics such as how cleaning operations can help reduce energy consumption, as opposed to a vendor who only focuses on how many people are needed for a shift.

More strategic control of a business means IFM partners also “integrate” functions that are related to facilities management, but have traditionally been treated as separate silos. Real estate, energy management, and employee services are just some fields IFM brings under its fold.

Total Facilities Management

As the name suggests, the Total Facilities Management (TFM) model brings all your needs under one contractor. There will be only one contract, and one service provider to work with. Successful TFM partnerships can result in massive savings in both time and cost for the company.

Most of these savings will come from indirect costs. Hiring out your entire facilities management personnel means HR will no longer have to work on recruiting, training, and retaining in-house staff for managing facilities. Invoicing, payroll, and budget management will also be streamlined, freeing up time your finance department can use on other core business activities.

Like bundled services, knowing who you’re working with directly can be difficult. A contractor can call their service TFM, but may actually be working with several other contractors to aggregate their service offering. Another significant disadvantage of TFM is your business becomes wholly reliant on another for crucial functions such as sanitation and security. A contractor going bankrupt or suddenly unable to provide their services can leave organisations fumbling in the aftermath.

The Fine Print

Expectation setting is crucial for the success of any outsourcing partnership. Whether you’re only looking to outsource one function or looking to entrust your entire facilities management department with a contractor, below are two ways you can determine if you’re looking at a service provider you can trust:

Transparent Pricing

Transparency into pricing plans is a real problem in many client-supplier relationships. Some service providers add hidden costs under ambiguous writing, so you never know what you’re truly paying for. Full visibility into spend is a must before signing with a contractor.

Detailed Deliverables

A scope-of-work document ensures expectations are met to the satisfaction of clients and the capability of contractors. You should be able to work out a detailed list of responsibilities, resources, project milestones, and deadlines with your chosen service provider.

Which Outsourced Facility Management Model is Right For Your Business?