Outsourcing Facility Services Can Bring Strategic Advantages

By Vince Elliott  
OTHER PARTS OF THIS ARTICLEPt. 1: This PagePt. 2: Facility Service Outsourcing May Reduce Costs, Bring Other Tactical GainsPt. 3: Seven Reasons That Traditional Facility Services Outsourcing Is Not SuccessfulPt. 4: Facility Service Outsourcing Problems Start with Lack of Common InterestsPt. 5: Facility Management Outsourcing: More Barriers to a Good Relationship

Businesses are increasingly using an outsourcing strategy, including outsourcing of facility services, to achieve strategic advantages: to improve their competitive advantage and to achieve market preservation or dominance goals. They are pursuing these objectives by focusing on their core business activities, by acquiring marketable benefits (or by gaining cost efficiencies) from strategic partners, through outsourcing. In pursuit of improving competitive market position and to fund these goals, buyers are also seeking to conserve financial and people resources.

When it comes out outsourcing facility services, these strategic goals are achieved by implementing a tactical strategy to reduce facility operating costs, to improve control over non-core business functions and to acquire best practice systems. Let's review why these goals are important:

Focus on Core Business: Core business functions are defined as activities and services that customers pay for, or benefit from. Re-directing resources from non-core activities to core business activities is the fundamental revenue and market reason for outsourcing. As an example, if a company is in the software development business, it doesn't want to dilute resources by also being responsible for delivering cleaning services for its property; it adds no advantage to their competitive software market position. These cleaning activities create the opportunity for outsourcing for non-core facility support services.

Through outsourcing, the company can focus its resources on its customers, values and mission and give itself a competitive advantage in the marketplace.

Acquire Marketable Benefits: Beyond getting a task done through outsourcing, contractor products can provide services that add greater value to the buyer's core business. And, when the buyer can create a competitive advantage for itself through outsourcing, it has a compelling reason to do so. For example, if a property management company acquired the capability of a world class call center through outsourcing, the knowledge and experience gained from their partner could improve its competitive position by offering greater benefits to its customers. Certainly, these added benefits can be a worthwhile outsourcing goal.

Create Shared Marketability: Sometimes, outsourcing of facility services creates greater synergy between the company and the contractor. This can derive from shared market advantage or shared costs and risks. A facility management company and a mechanical maintenance services company often have common customers. So an opportunity can be created for each company to market jointly, or individually for the benefit of both. The ability to expand each other's market share is a powerful strategic advantage that can expand opportunities for both parties. The partnering of these two types of companies can lead to the development or expansion of products or services with the costs and risks associated with development shared jointly. Actually, the scale of benefits is limited only by the vision or the egos of the partnering companies.

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  posted on 10/30/2012   Article Use Policy

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