To understand the various options for support services delivery it is vital that we understand the difference between core and non-core business.
One of the primary reasons for identifying the distinction is to ensure that the attention of the organisation’s management is focussed on those parts of the business – Core Business – forming an essential part of the end-product.
Once the distinction has been achieved, the remaining operations, might be classified as Non-Core Business, and then could be provided by external suppliers.
There is a wide variety of different service delivery options available for the Facilities Management functions but they will usually fall into one of the following categories.
In-House Service Delivery
In-house delivery of services essentially means that the organisation employs its own entire staff to undertake the support services. Cleaners, caterers and security guards, for example would all be directly employed by the organisation.
Outsourced Service Delivery
Outsourcing means using another company to provide the services for you. For example, rather than employing your own chefs you might use a specialist catering company to provide all the catering for your organisation or you might use a window cleaning company to clean the windows of your building. There are different options available for outsourcing services.
- Single service outsourcing – as its name suggests, your organisation would award a contract for a single service to an external company so the examples given in the paragraph above would all be forms of single service outsourcing. One service is provided by one company. Often, this form of outsourcing is used in combination with a degree of in-house provision and so is considered to be a form of Partial Outsourcing.
- Bundled services – In this instance, one company provides you with two or more services, for instance cleaning, general waste disposal and provision of hygiene services.
- Total Facilities Management (TFM) – in a TFM scenario you outsource ALL your FM requirements to a single company for a fixed price. For this to be successful it is vital that the client provides enough detail of the requirements to enable the FM company to be able to scope the service fully and manage the various services efficiently.
Private Finance Initiatives (PFI) & Public Private Partnerships (PPPs)
The Private Finance Initiative (PFI) and PPP can be considered as an extreme example of outsourcing. PFI was developed in the UK, but also adopted in other countries such as Canada and Australia. PFI can appear to be a complex subject, so for a full explanation of how it works, have a look at this article.
The key difference between a PPP and a PFI is who takes on the risk of the project. In a PFI the private sector organisations takes on all the risk; however, in a PPP it is, by definition, a partnership and so the risk is shared.
The concept of PFI and PPP has, rightly or wrongly, received a lot of negative press over the years. Ultimately this has led to the government scrapping the idea and pledging not to create any new PFI deals. However it is important to know how they work as many of the existing PFIs will continue to run until the end of their term, so they’ll be around for a long time yet!
IWFM (BIFM) Qualifications
This article relates to the following IWFM (BIFM) Qualification Units:
- IWFM (BIFM) Level 3 in Facilities Management
- FM3.01 Introduction to Facilities Management
- FM3.03 Customer and Stakeholder Relations in Facilities Management
- FM3.04 Specification and Procurement of Facilities Supplies and Services
- FM3.08 Understanding Facilities Management within the context of an Organisation
- IWFM (BIFM) Level 4 in Facilities Management
- FM4.01 Overview of Facilities Management
- FM4.04 Understanding Facilities Management Support Services Operations
- FM4.21 Understanding Procurement and Contract Management in FM
- IWFM (BIFM) Level 5 in Facilities Management
- FM5.01 Facilities Management Developments and Trends
- FM5.02 Organisational and Facilities Management Strategy
- FM5.21 Managing Procurement and Contracts in Facilities Management
- IWFM (BIFM) Level 6 in Facilities Management
- FM6.01 Strategic Facilities Management
- FM6.05 Strategic Management of FM Support Services Operations
- FM6.12 Procurement Strategy for Facilities Management