We have considered the advantages of outsourcing and the disadvantages of outsourcing in separate articles, but it is worth looking at the pros and cons of specific facilities management outsourcing methods in more detail.
There is a huge plethora of different outsourced delivery methods, but they will tend to fall into one of five categories – Single Service, Bundled Services, Wholly Outsourced, Total Facilities Management or PFI/PPP. Each has its own pros and cons.
One or more services will be outsourced to a range of different contractors.
- It is easier to maintain control over single service contracts as the service provider is responsible for just one service.
- The single service provider is usually an expert in his/her field and so you are procuring a level of expertise that may not be available elsewhere
- You will be using contractors who are specialists in their field and should be up to date with the latest trends and developments
- If you outsource several services to a range of different service providers you have a multitude of contracts to manage, a similar number of invoices to process and the cost benefits may be limited.
Wholly outsourced is similar to single service but all services are outsourced to a wide range of different suppliers.
The advantages and disadvantages are the same as those for Single Service outsourced.
A bundled service contract usually ‘bundles’ three or four similar services together to be provided by one contractor.
- This tends to be a cheaper option than single service contracts as the provider can use the same staff to undertake the various services
- Bundling services can also bring cost savings through economies of scale.
- As the client, you cannot always be certain that the contractor you are using is directly providing all the services within the bundle. Quite often they will subcontract those services for which they have limited expertise and you, as the client, lose even more control.
Total Facilities Management (TFM)
The entire FM operation is outsourced to a single Facilities Management service provider.
- Using a TFM company means that you will only have one contract and one point of contact
- Management of the contract should be much easier.
- You may also have a fixed price and so planning your budget should be easier
- You are totally dependent on one company for all your support services and should anything happen to this company you have all your eggs in one basket.
- Similar to bundled services, you cannot guarantee that the TFM company you have employed will actually provide all of the services. In fact, it is more than likely that they will subcontract many of the services to third party companies with whom you have no involvement. You may not, therefore, be able to monitor aspects that you feel important – the sustainability policies of the third party companies for example.
PFIs and PPPs
Special contracts which include the Design, build, financing and ongoing management of a new building. For a more thorough explanation of what a PFI/PPP contract involves, read this article
- Provide much needed funds for organisations within the public sector and enable them to acquire state of the art buildings and services that they would not be able to afford using public sector monies only
- PFI comes at a price and it is interesting to note that several hospital trusts and schools have bought out their PFI contracts in an attempt to bring costs back under control.
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