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Building Operating Management

Developing a Pro-Active Relationship with Outsourced Service Providers





By Stormy Friday   Outsourcing

OTHER PARTS OF THIS ARTICLEPt. 1: Review Existing Outsourcing Service Contracts to Ensure SuccessPt. 2: This Page

Next it's time to assess the technical aspects of the contracts. Despite good intentions, facility managers often do not review the mechanics of their contracts on a regular basis to ensure that contractors are complying with agreed-upon terms and conditions, and the type and level of service for which it has contracted.

Facility managers should have a detailed contract review on a quarterly basis. Facility managers who do not have the staff for this purpose need to undertake contract review themselves on the same timetable.

It goes without saying that facility managers should explore the human relations aspects of facility management contracts. Regardless of the level of contract management outside their office, facility managers should be having regular communication through partnership meetings with each and every contractor. These sessions can ensure that both parties are on the same page when it comes to evaluating the various aspects of the relationship.

Even if the facility manager is receiving regular status reports from contractors, there is no substitute for face-to-face meetings. When facility management organizations have a pro-active working relationship with service providers, they are more inclined to make suggestions and recommendations that can benefit the organization overall. When facility management and the service provider work together, they can leverage the strength of both organizations and reduce the weaknesses by addressing issues and concerns before they become major problems. Service providers are more open to minor adjustments in contract terms, if they believe they are making an investment in a long-term relationship.

Rescuing a Troubled Relationship

There are many relationship rescue workshops available that claim they can salvage troubled relationships. The concept of a relationship workshop has tremendous appeal for a contractor relationship that is in danger of creating serious problems for the facility organization.

Research on the topic of effective contractor management yields some interesting results on mending broken vendor relationships. While there is little information specific to facility management, there is lots of advice on how to fix relationships with IT service providers. This may be because, according to Bruce Skaistis of Skaistis Consulting, a project management, outsourcing and process optimization consulting firm, more than 50 percent of all IT sourcing relationships fail and almost 70 percent of them are terminated early.

Skaistis outlines five major steps to repair a troubled outsourcing relationship that are appropriate for facility managers. Through a relationship rescue workshop, the facility manager can accomplish the following:

De-Emotionalize the Situation: The only way to correct problems in a troubled relationship is to take the emotion out of the discussion. Although it may be counterintuitive, the important first step in the rescue process is to have a face-to-face meeting that begins with some win-win statements for both parties. In these situations, both parties need to think about finding a win-win solution.

Establish Realistic Expectations and Objectives: It may be time for both parties 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. Unrealistic outsourcing expectations are one of the primary reasons why outsourcing relationships get into trouble in the first place.

Assess Options: Prior to the meeting, facility managers should explore potential courses of action. It is essential to understand the organization's options for dissolving the relationship to determine what leverage facility managers have for getting it back on course. Assessing options and being prepared to discuss them in the workshop is a "salvage" term for negotiations. Facility managers should know what they want and understand what the service provider wants as well. This is the underlying principle for negotiating. This also is a key component for negotiating new outsourcing contracts as well.

Explore Options: 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 workshop 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.

Make a Pact to Communicate: If facility managers have reached the need for the rescue workshop, they probably have failed to communicate an effective provider management role. It doesn't necessarily mean that the future of an outsourcing relationship is doomed. If the facility manager and provider have been able to achieve the steps leading up to this one, the facility manager probably has salvaged the relationship.

Do not walk away from the table, however, without establishing a clear plan for communicating on a regular basis. This plan needs to include structured status reports from the provider, in addition to regularly scheduled face-to-face meetings. The next time a facility manager meets with a service provider it should be in the manager's office, not in divorce court.

Stormy Friday is president of The Friday Group, a facility management consulting firm specializing in organization development and re-engineering, strategic sourcing alternatives, and customer service and marketing strategies. She can be reached at stormy@thefridaygroup.com.


Continue Reading:

Review Existing Outsourcing Service Contracts to Ensure Success

Developing a Pro-Active Relationship with Outsourced Service Providers

posted on 2/28/2011

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