Critical Facilities Summit

3  FM quick reads on outsourced service provider

1. Considerations in Reviewing Outsourcing Service Contracts


Just as with any relationship, the relationship with your outsourced service providers is not a set it and forget it proposition. Though a lot of nuanced tweaking goes into fostering a successful partnership, the contract is a big factor in achieving optimal results. Facility managers should periodically review how well the current outsource contracts support the overall sourcing strategy. Some contracts may not be as relevant as they once were and may have to be modified to fine-tune the services delivered. Other contracts may need to be expanded to meet additional requirements or changes in internal staffing.

Key considerations include:
• Does the current contract allow greater flexibility in delivering services to facility management customers?
• Does the current contract allow facility management to focus on priorities, rather than using a "scatter" approach to service provision?
• Does the current contract provide the facility department with the ability to expand or reduce staff as necessary and provide expertise that does not exist among internal staff?
• Does the current contract support new management skills and provide greater control over service delivery?
• Has the current contract delivered operational efficiencies and resulted in financial benefits to facility management and the company?
• Is the current contractor accountable for service performance? Is the contractor making every effort to be cost-conscious in service delivery?
• Is the current contractor providing industry benchmark information on a regular basis to compare the facility management organization with industry service standards?
• Has the current contract allowed the facility department additional time to devote to strategic planning and does the contractor provide valuable input into the strategic planning process?


2.  Therapy for Broken Outsourced Service Relationships

Sometimes service provider relationships just aren't going well, but it's a little hard to see how to make it better. Rather than wait for the last straw to finally break the outsourcing relationship, it is possible to rescue an outsourced service relationship gone sour. According to Bruce Skaistis of Skaistis Consulting, there are five major steps to repair a troubled outsourcing relationship. I know a lot of this might sound like couples therapy, but if you think about it, partnerships between people, whether personal or professional, inevitably share some common threads.

The first thing to do is de-emotionalize the situation. The only way to correct problems in a troubled relationship is to take the emotion out of the discussion and have both parties coming at the problem looking for a win-win solution.

Once emotions are in check, it's time to re-evaluate the expectations and objectives established at the outset of the contract. If these expectations were never clearly defined or were unrealistic to start with, a win-win situation could not be achieved.

Before the meeting, figure out what potential courses of action might be. It is important to understand the organization's options for dissolving the relationship to determine what leverage facility managers have for getting it back on course. Facility managers should know what they want and understand what the service provider wants as well. This is the underlying principle for negotiating.

Diving into the options is the only way to address the issue at hand. Once emotions have been quieted and expectations have been delineated, it is necessary to talk about options. Facility managers should start by expressing dissatisfaction with the relationship and stating that the purpose of the meeting is to get the relationship back on a positive course.

The word "attorney" should not be part of the discussion. This is the time for both parties to roll up their sleeves and get to work hammering out a new relationship.

If you get to this point and manage to salvage the relationship, make a pact to communicate and be an effective provider manager so you don't end up in the same spot again.

3.  Partnering with Outsourced Service Providers

When upper management puts the squeeze on the facilities management budgets, it might be tempting to simply let the budget stress slide downhill to land in the lap of outsourced service providers. Instead of engaging in wholesale slashing and cutting of outsourced services, facility executives can choose to partner with their providers to see how they can work together to get to the bottom line in a creative manner. One facility executive reports going to his service providers after his budgets were cut in half and saying he didn't really want to make cuts but he needed their creative ideas to navigate the situation. To answer his challenge, the cleaning services provider is piloting a day cleaning program to cut the need for dayporters while improving customer satisfaction since employees can now talk directly with the janitors. With the security provider, this facility executive is talking about how to streamline patrols and improve the reporting process. With some creativity and teamwork, it is possible to maintain service levels while cutting costs.


RELATED CONTENT:


outsourced service provider , contract , strategic planning , benchmark

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