outsourcing meetingBefore a service provider is brought on, your organization should have a clear understanding of what service goals are realistic in light of available financial resources.

4 Steps to Ease the Transition to a New Outsourcing Partner

Understanding and applying strategic contract transition management (CTM) is the key to getting off on the right foot with a new outsourcing partner. Here's how.

By Teena Shouse  
OTHER PARTS OF THIS ARTICLEPt. 1: How to Get Off to a Good Start with an Outsourcing ContractPt. 2: This Page

A key element in developing a partnership with an outsourcing provider is the contract transition management (CTM). Facility managers have many stories about how difficult their transition was from one company to the other — even about moving between two different operating models from the same provider. Plan to follow these four basic steps to effective contract transition.

1. Pre-contract stage: The pre-RFP steps described earlier can drive the pre-transition strategy. In addition, this strategy should include verifying the accuracy of and sharing of facilities data, asset inventory, and the physical condition of the assets, with input from both the facility management organization and the new service provider. Much of this data should reside in the computerized maintenance management system (CMMS) or integrated workplace management system (IWMS). It is best to conduct these quality verifications far enough in advance of the expiration of the existing contract that corrections can be made, or significant issues can be identified. However, do not act so far in advance that the observed conditions could change due to subsequent service activity. To ensure full disclosure, an independent party should perform a facility condition assessment to create a facility condition index (FCI). This will allow both parties to initiate the contract with few or no surprises.

2. Facility manager’s role: The facility manager should drive the contract transition management process and therefore the team which will make it successful. The facility manager will be the liaison between the procurement department, the service provider, and the pre- and post-RFP team. The facility manager is also responsible within this phase to create the phase-out stage with the existing provider and the new one. This should include a very detailed schedule, with roles and responsibilities well defined, and a risk management plan. Always plan for the unexpected to ensure a successful transition.

The facility manager should also either create or oversee the creation of a communication plan. This is not only for the provider but also internal groups that will be affected by the change in providers. The communication plan should cover other connected service providers, landlords if necessary, and most of all the customers, the employees who will be affected (hopefully in a positive way) by this change. Remember productivity and providing a positive work environment are the most important outcomes of this effort.

3. Structuring the transition: Transition approaches vary as much as the companies that outsource facility services. There are no current national or international norms for this process. However, efforts are underway to provide International Organization for Standardization (ISO) facility management guidance standards that will address global approaches to strategic sourcing and facility management operations. This process moves from the creation of the tactical steps to the review of the monitoring methods which have been agreed to by both parties. In between, address other necessary items such as invoicing processes, customer business review process (how often the two parties will meet and what will be discussed and how), customer feedback procedures, and of course a reminder of the key performance indicators.

4. People management: The transition period between service providers can be a great disruption or smooth as silk, and you can have a great degree of influence on which way it goes. Your goal should be a commitment by the outgoing provider to transfer well-maintained equipment and operational data to the new service provider while minimizing any negative operational impact to building occupants. Third-party consultants aligned with the contract transition management team are sometimes used to support all parties and minimize risks.

The most vulnerable and yet important aspect of this transition involves people. Key people within the organization must be kept informed about the changes and how they will be affected to avoid the resistance to change which can derail even the best of transition plans. The more transparent the process, the better. Procurement, HR, the C-suite, the service provider’s key contacts, and the facility management team should work with total transparency in the process.

This is also the time to establish the first-year communication plan, the operational milestones based on the agreed upon contractual elements, and specific unique projects projected. Consider constructing this in the form of a balanced scorecard. (For more information, research “balanced scorecard by Kaplan and Norton”).

There is no special potion in business that you can concoct and drink to miraculously make everything perfect. However, if all parties — especially the facility manager and the key service provider liaison — commit to work together and build a trusting relationship based on shared goals and adherence to the contract terms, you will come closer to what might be called “operational excellence.” Remember, as in any relationship, realistic expectations and great communication are essential.

Teena Shouse (teena.shouse@fmtransitions.com), RCFM, IFMA Fellow, is president of FM Transitions. Previously she was vice president of corporate services for Facility Engineering Associates for eight years, and general manager of employee services for Sprint for 18 years. She also served as chairman of the IFMA board of directors and as chair of the board of directors of Global FM, a global federation of facility management organizations.


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  posted on 2/26/2020   Article Use Policy

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