4  FM quick reads on outsourcing

1. Define Performance Expectations in Outsourced Services

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.

Evaluate contractors’ green services to meet green goals

Today's tip is to look to your service providers to help meet green goals. Many outsourcing providers have realized the growing demand for green and have tailored their services to help green-focused facility executives. But carefully evaluate the providers and their services to ensure you are getting what you want.

"There are more than two dozen credentialing, certifying, or inspecting authorities, and I think to some extent they're all credible if you clearly understand the mission of each," says Vince Elliott, founder and chief executive officer of Elliott Affiliates, Ltd.

Facility executives need to make sure that a provider's certified products work not just in a lab but in actual working buildings, Elliott says. And requiring certification could significantly reduce the pool of otherwise-qualified providers and possibly raise prices.

Facility executives should also know what they are willing to commit to. "Some measures will require time and energy and possibly capital," says Michel Theriault, a principal with Strategic Advisor. "You may prioritize and start with those that are low cost, low effort and work your way up the ladder."

Joe Havey, president of Havey Real Estate Consultants, recommends talking with other facility executives about which providers they've used and whether they've been happy with the work.

Havey also suggests that facility executives design a matrix and assign a weighting to each of the criteria. For example, on a scale of 1 to 10, having a LEED Accredited Professional credential may be worth three or four points, while being a certified energy manager may be worth 10 points.

How the expertise is applied is also important and should be spelled out in the contract with the provider, Theriault says. "That expertise costs money, and if you're not specific in your request for proposal, you may not get it," he says.

It's also vital to get proof of exactly what a provider has done. "Get the data that shows it's worth replacing the lighting system and which shows the payback," Theriault says. "You're evaluating their performance rather than just evaluating what they say they'll do."

Elevator Service Provider Considerations

Once facility managers have evaluated the existing elevator equipment in their facility and the available budget to address needs, they will have the framework for determining what type of services to seek from providers.

When searching for a provider, facility managers should look first to see that the contractor is accredited to work in a given market. Accreditation requirements vary around the country. Some states require service providers to have a contractor's license. Others have specific licensing programs for the vertical transportation industry, which includes elevators and escalators. Research the company to make sure it has proper insurance coverage because elevators open the owner to substantial liability. The provider also should have the financial strength to follow through on its service commitments for the life of the contract.

Next, review the company's engineering experience. Ask whether it has an adequate inventory of spare parts and the logistics to get them to the job site. Find out how many service technicians are available to respond to calls, even if the call comes at 2 a.m. Pin down prospective service providers on response time. Experts say a typical response time during normal business hours should be 30 minutes or less.

Ask too about the contractor's technical training program and be cautious of partnering with service providers that don't have an ongoing tech training program, as they will likely not be versed in the latest industry developments.

The company's technicians should be intimately familiar with the building's original elevator equipment and have access to spare parts, necessary software, wiring diagrams and other documentation.

A good service provider, however, will do more than just meet the technical requirements of a contract. Service providers should be willing to make recommendations for upgrades and improvements to meet current or future standards.


outsourcing , results , service contract

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