Building Operating Management

How to Get Off to a Good Start with an Outsourcing Contract



For a successful relationship, treat your outsourcing provider as a partner, not a vendor.


By Teena Shouse   Outsourcing

OTHER PARTS OF THIS ARTICLEPt. 1: This PagePt. 2: 4 Steps to Ease the Transition to a New Outsourcing Partner
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.

Outsourcing is a well-established strategy for delivering facility management services. Some facility managers have a great relationship with their service providers. Others find themselves on a bumpy road, dealing with performance concerns, financial issues, and miscommunication. What separates a successful outsourced contract from a disappointment? A big difference is the facility manager’s philosophy. Is the goal simply to execute a contract or is the objective to build a relationship? To do the latter, it’s essential to focus on that goal from the very beginning.

A starting point is to stop thinking of outsource service providers as vendors. Vendors sell hot dogs. Outsource service providers should be considered partners in the business. They can be true enablers if the facility manager allows them to be. In order to keep the relationship with a service provider on track, it must begin correctly.

Value of a partnership

Although it may take more work to develop a partnership than to execute a contract, the payoff is worth it. An outsourcing provider can play an important role in the success of your organization. What employees expect from their workplace has changed greatly in the past 20 years — and will continue to change rapidly. The facility management sector must continue to evolve to meet today’s and tomorrow’s trends. As the expectations of workers have evolved, the requirements an outsource partner has to meet must evolve as well. The service provider must adapt to an increasingly diverse workforce with equally diverse and distinct needs.

There is pressure on companies today to offer value to their external customers, forcing them to constantly innovate and expand their core services to deliver more and more value. The consequence of this is often a reduction in resources devoted to non-core areas, like the facility management budget, at the exact same time as employees and clients expect better workplaces experiences. This is where innovative and effective outsourcing can be an attractive proposition if properly sourced and managed.

Setting the stage

It’s important to set the stage properly for facility management outsourcing. Start by building realistic expectations before creating the RFP for the services to be provided. This requires gathering valuable and varied opinions all the way from the end users to the financial owner. It’s your job to ensure that everyone is onboard with the desired service levels to develop the key performance indicators (KPIs) which will provide contract governance. What’s more, before 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. Using industry information like the APPA Standards of Service will show the true correlation between cost and the expected level of services.

The next step is to review the proposals that come in response to the RFP. When making site visits, don’t let yourself be tied to the vice president of sales for the provider; get behind the scenes to see how things are really working. While evaluating costs, remember that cheaper is not always better. In today’s ever-changing workplace, there is much more to think about. Consider factors that affect employee productivity such as comfort, cleanliness, uptime of operations, and avoiding distractions due to unnecessary requests for service or to address problems within the facility. Also, it is important to be cognizant of protecting the integrity of the environmental sustainability affected by the operations. Lastly, there should be great care and attention to allowing and expecting the service providers to do everything in their control to protect and expand if possible, the life expectancy of the built environment covered by the contract.

Many facility managers have moved away from prescriptive contracts in favor performance-based contracts. This approach, if properly managed, will allow the provider to be creative in their approach, which could be the key to the success of the partnership. The contract governance individual within the facility management group must allow the provider to do what they do best and expect originality and forward thinking.


Continue Reading: Outsourcing

How to Get Off to a Good Start with an Outsourcing Contract

4 Steps to Ease the Transition to a New Outsourcing Partner



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  posted on 2/11/2020   Article Use Policy

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