While cost savings remain one of the initial reasons companies hire an outsourcing company to provide managed services for non-core elements of their business, flexibility quickly becomes one of the most evident benefits. The flexibility comes from the secondary reasons companies use managed services: to focus on their core business, access to resources, world-class business processes, additional scope and improved scalability of the services.
The facilities management profession is becoming more complex, and responding to those complexities with managed services is easier and exposes you to fewer risks.
The complexities include more stringent regulatory oversight, emerging environmental issues, increasing risk and liability, technological changes, complex energy management coupled with increasing costs and difficult human resources management issues resulting from accelerated business changes.
In addition, scope and size is the driver for flexible cost effective service, yet facilities management is typically a small part of the organization. As a result, it doesn’t have the concentration of resources, technology, experience and buying power that a large outsourcing company has, making it difficult to provide flexible, cost effective service to your core business.
Strategically, improved flexibility is just as important as reducing costs when implementing managed services. The business environment companies face in today’s economy require quick action, frequent changes in direction and easy scalability of services and their facilities in order to respond to changing priorities and increasing competition.
With managed services, you gain flexibility through the size of the outsourcing company and the ability to focus on strategic issues that impact your core business instead of managing tactical business processes and issues.
As an example, the outsourcing company becomes responsible for human resources related to facilities staff. Daily issues, including providing continued services when a vacancy arises and staffing up or down in response to business changes, are no longer your responsibility. This frees up internal HR and management resources to focus on the needs of your primary employee base – the one that directly supports your core business. Scalability becomes effortless when you purchase, sell or lease new properties, or even when you acquire or divest a business unit.
Another area where you gain flexibility is technology. A large outsourcing company has the resources and size to use flexible enterprise systems, and is able to provide them at unit costs a smaller facilities department can’t match. By eliminating the direct management, expense and investment inherent in the technology necessary to manage facilities and by focusing your IT department on your key business, you free up resources and become more flexible to respond to core business needs.
The increased concentration of resources that result from managed services also provides flexible analysis, reporting, technical solutions and advice when you need them to support key decision for your core business. This includes effective preventive maintenance, capital planning, asset management, financial analysis, environmental stewardship and the increasing legislative initiatives that impact your facilities.
While managed services will provide benefits, a successful transition and a strong ongoing relationship with the service provider is essential. As an important business strategy, it is worth spending time planning the initiative and ensuring key elements are in place to ensure success:
- An effective contract management team or individual to manage the outsourcing relationship and provide oversight to the managed services.
- Well-defined scope and contract provisions that give you contractual flexibility as your company changes.
- A procurement process that ensures the company you select can actually deliver the results you expect, and is a good match for your organization.
- Effective performance measurements focusing on results that are important to your organization as well as providing key management tools.
- A transition plan to smoothly shift people, processes and other resources over to the outsourcing company in addition to ensuring the business and information interfaces are in place.
- A contract management structure and culture that leverages the benefits of managed services and ensures a partnership approach to the relationship.
With the cost and complexity of providing facilities management services, managed services are an effective business strategy to reduce costs and increase your company’s flexibility. By focusing on your core business, you can leverage the benefits to enhance your competitive advantage.