Below are outlined ten principles which, when
fully understood, would help facilitate a solid and beneficial relationship
with an outsourcing provider:
1. Facility Management.
With the complexities involved in maintaining
the ever-changing office environment common to many corporations today,
facility management is becoming more than a one-person job. Many corporations
are turning to outsourcing facility management functions that involves
maintainin and managing facility, furniture, and technology changes. Facility
management outsourcing can be a cost-effective way for corporations to
ensure the management of these assets is done accurately. A Facilities
Consultant or Design Consultant would have the furniture and technology
expertise to develop a long-term program to successfully and consistently
handle asset management. By outsourcing this facility management function
to an experienced consultant, a company could take advantage of an advanced
CAFM (Computer Aided Facility Management) program designed to meet its
individual needs. In developing a CAFM program, a database is created
with furniture, IS and telecommunications attributes built in. This database
can then be linked directly to the building space plan, making asset management
very precise and therefore productive. In searching for a consultant to
to outsource facility management, a corporation should choose a company
that is also experienced in space planning, ergonomics training & project
management. The benefits of facility management outsourcing can then be
The Webster's Universal Dictionary meaning of
"Outsourcing" is: "A company or person that provides information; to find
a supplier or service, to identify a source". In lay manís language it
is a pure contracting transaction whereby one company purchases services
from another while retaining ownership and responsibility for the underlying
processes; the clients tells the provider what they want and how they
want the work performed. Here the client authorizes the provider not only
to own and operate, but also redesign underlying processes, to reap even
greater cost and efficiency benefits. Accordingly, moving along the continuum
from client to provider control of non-core processes can create distinctive
value, especially in a trusting, long-term relationship.
Out-tasking is an emerging concept. It precodely
defines the boundaries necessary to explain to a work force that it is
being evaluated for possible outsourcing. With the uncertainty of today's
business climate, facility managers are reluctant to discuss an outsourcing
possibility until the certainty of the benefits is conclusive. At that
time, the concept of out-tasking seems to make the explanation easier
and is restrictive enough to help employees understand the overall and
final effects of out-tasking.
The following quote summarizes this concept:
"As the facility management industry evolved
and the need to explain the overall effect of this concept on potential
customers emerged, the term outsourcing was coined to narrow down the
functions to be outsourced to an outsource provider. To further ease potential
anxiety, the service industry again coined a word, out-tasking, to further
define the area to be tasked to an outsource provider."
This was a source of much anxiety to the employees
of companies looking at complete outsourcing or out-tasking of specific
functions. Many times the outsourcing provider would use the term 'downsizing'
in front of employees in presentations to management in teams exploring
outsourcing or out-tasking. Downsizing became synonymous with reduction
in work force immediately after the implementation of outsourcing.
To alleviate some of the anxiety caused by downsizing,
the outsourcing/out-tasking industry put its thinking cap on and developed
a new concept called rightsizing. Many times, while performing an on-premises
evaluation, the outsourcing provider found that the numbers of support
personnel were at the same levels as they were when the total company
population used to be much higher. To make a logical manpower recommendation
to a management committee reviewing outsourcing or out-tasking, outsource
providers started to use 'rightsizing' as the term that best described
the proposed reduction in support personnel headcount . This concept is
gaining increasing acceptance among facility managera. The benefit of
outsourcing, out-tasking, and rightsizing is allowing an enterprise to
do what it does best or to return to its core competency.
6. Core business.
The business community today is made up of large
and small companies. The larger the entity, the need to diversify increases.
As a company adds more division and acquisitions, it often recedes further
from the business that made it successful. For example, it is not uncommon
for a food company to own a transportation company or for a railroad to
own a fertilizer company.
Today's ecomomy demands a lean and right-sized
organization in order to generate profits and satisfy stockholders. To
complement the needs of the business community and their efforts to peel
off unprofitable segments, the facility management industry has directed
the benefits of outsourcing and out-tasking to the concept of core business
or core competency.
By outsourcing non-core specific functions to
an outsourcing provider, the business entity then can go back to what
they do best-their core business.
Getting the customer back to their core business has allowed the outsource/out-task industry to penetrate new market segments every year. In 1994, more than 40 market segments were represented by the outsource/out-task industry.
7. One-stop shopping.
The presence of multiple service providers in
the outsourcing industry allow a potential customer to minimize the number
of proposals necessary to make an outsourcing decision. In the last five
years, both the number of multi-service providers and the number of business
entities looking at outsourcing or out-tasking multiple functions have
increased. Five years ago, if a company wanted to out-task two or three
functions at the same time, the final solution would have been multiple
outsource providers, each performing a single function. Today, one-stop
shopping offers the potential customer a minimal number of proposals to
read and allows multiple functions to be outsourced or out-tasked for
a better price. The primary contractor will be the focal point to the
facility manager, even if there are subcontractors supplying services.
8. Value addition.
With the advent of one-stop shopping, outsourcing
and out-tasking customers were afforded a lower price. Rather than having
multiple service providers performing singular functions with supervision
in each segment, the one-stop shopping provider could offer all functions
to be outsourced or out-tasked with one level of management. This created
a concept called "value addition" or more value for less money.
9. Process re-engineering.
The savings to both the customer and outsourcing
provider in any value-added scenario come from improved process procedures.
By looking at each function and breaking down the number of steps per
function, the service provider decreased the number of steps and increased
productivity. Process re-engineering will become more popular in the facility
management industry during the next five to ten years.
10. Internal Customers.
The first nine areas explored concerted work
methdologies that aimed to support a very important group of people -
the employees. As the Total Quality Management (TQM) concept has spread
across corporate America, the employees have been reclassified as internal
customers of services provided by both internal and external suppliers.
In the case of the outsourcing industry, outsource providers are evolving
as external suppliers of on-premise services to the internal customers,
the employees of the outsourced or out-tasked company.