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Define Performance Expectations in Outsourced Services




December 21, 2012 - Outsourcing

Today's tip from Building Operating Management is to focus on performance outcomes when establishing outsourced service provider relationships. This will shift the focus of decisions away from shallow measurements, like cost, to what really matters to facility managers who are satisfied with their outsourced service providers: results and relationships.

Clearly defining the expected results is key for this approach to outsourcing to work. This does not involve micromanaging the contractor and prescribing a series of processes. After all, outsourced service providers have been selected as experts in their field. Instead, facility managers should focus on defining what results the outsourced service provider needs to provide in order to bring value to the organization and make the outsourcing relationship worthwhile.

Value to the organization usually falls into two categories. The first is when the outsourced service allows the organization to better serve its own customers. The second is when the outsourced service reduces costs for the organization. When establishing an outsourced service relationship, facility managers should be clear whether it's more important to cut costs or increase capacity.

Expected outcomes need to be defined because value is not created just from the fact of the outsourced service contract. "Buying a contractor's time, tasks, processes, labor hours, systems, etc., has little value if they do not produce an internal or external advantage for the facility manager's company," writes Vince Elliott, president of Elliott Affiliates, Ltd.

But facility managers also must remember that contractors are not just simple commodities to use up and discard. Healthy outsourcing relationships acknowledge that the contractor needs clear paths between services rendered and benefit to their company. Benefits can obviously be tied to money, but can also encompass marketing opportunities or doors opened to more business. How performance outcomes tie to consequences, both bad and good, need to be clearly defined.

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