Outsourcing The Facilities Management
Ts. Wan SZ Yahya
(Advocating for a Safe Workspace and Mutual Respect) Property Manager at Property Management Company with expertise in facilities planning and management.
Researcher: Ts. Wan SZ Yahya (July 2023)
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1. ??????? Facilities Management
??????????? Facilities management (FM) is a discipline that assists an organization in efficiently providing its primary business. FM is a profession that delivers a variety of services to support an organization's primary business. It is in charge of managing the services required for buildings, systems, equipment, or furnishings that may help organizations compete in a fast changing environment. Thus, it can be asserted that FM is important for an organization's good and sustainable operation, and FM is a technique that delivers value to organizations. The FM strategy must be constantly developed in order to demonstrate the additional value to the organization's directions. One critical strategy is to ensure that the service provided by service providers is up to quality and meets or exceeds the clients' expectations.??
??????????? Facilities management is crucial because it guarantees that employees work in a secure and comfortable setting. People who work in a positive environment feel well-rested, energized, productive, and excited about their jobs. They'll be more motivated to show up for work and provide their best effort once they're there. In contrast, a bad workplace annoys employees, reduces their productivity, and even makes them ill. The workplace is another way that a company's brand is physically represented, and many businesses use it to attract and keep both employees and customers. The management of the actual workplace has a crucial part to play in the developing corporate trend of care for the employee experience.
??????????? In general, FM is in charge of providing services such as facility design, real estate and building construction, building operations and maintenance, and support. Specific FM procedures such as defining FM strategy, analysing needs, designing solutions, optimization technique, and monitoring service provisioning are carried out in these activities.
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2.0?????? Outsourcing of Facilities Management Contract
??????????? Nowadays, the majority of buildings still use usual management, which involves a small team or organization inside one department. They exclusively focus on the functionality of the building's facilities and services, such as the maintenance division, which makes sure all the machinery and services are operational at all times. Organizations may employ facilities management to optimize returns on investment and create sustainable competitive advantages in the market. For organizations to minimize building life-cycle expenses and increase revenues, they must get the most out of their buildings. The conventional method of outsourcing cannot always be the most effective sourcing technique. An alternate strategy that could be better suitable in some circumstances is out-tasking.
??????????? Facility executives should keep the goal of acquiring the necessary talents, not generating quick financial savings, in mind while deciding how to staff, Edward (2005). This is crucial for an organization when deciding how to manage its facilities in order to fulfil its aims and goals. According to Alexander (1996), outsourcing has a wide range of advantages for organizations, including lower costs, greater access to superior quality, flexibility in responding to market changes, the chance to concentrate on core competencies, and the ability to expand product diversity. According to Belinda & Deborah (2014), facility management outsourcing is a great opportunity for big organizations to cut operational expenses, concentrate more on their core missions, and boost their competitiveness.??
??????????? To simplify things, all of an organization's non-core tasks are included in facility management. These may include cleaning, cooking assistance, building setup and security, or interior and landscaping services. These are all essential components of every corporate entity. It is challenging for an organization to keep track of all these operations as the firm grows and the competition becomes fiercer. It becomes stressful and expensive to manage diverse departments of each of these operations that do not immediately impact the business. Even the richest of organizations are thinking about cutting expenses to stay up with the market, especially in a market in crisis. Facility management services outsourcing not only relieves unneeded stress but also lowers costs. The new formula for success is to concentrate and perform effectively in essential tasks.
??????????? Transferring organizational operations to another company is known as outsourcing. The idea is to have a third-party service provider who is currently outsourcing those same business processes oversee or carry out the day-to-day operations of one or more business functions. In order to perform a business function that could have been performed internally, a parent company hires an outside entity. By concentrating on its core capabilities, outsourcing helps a company or organization become more competitive.
??????????? As for example. based on Noor and Pitt (2009), the Federal Government Buildings situated in all 50 states were the next to privatize FM service contracts after the Ministry of Health did so for public health services. In contrast, Telekom Malaysia was the top Government Link Company (GLC) in the private sector when it came to contracting out FM services for all non-telecommunication facilities in Peninsular Malaysia.
??????????? The correct outsourcing strategy and its effective implementation are two essential elements of successful facilities management. The service provider should ideally possess the abilities necessary to provide the service with a level of reasonable dependability, predictability, cost effectiveness, and punctuality. Therefore, based on Encon & Albert (2004), the long-term maintenance goals of the client and the supplier's incentive to deliver high-quality service are typically in conflict when businesses outsource maintenance.
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2.1 ????? Outsourcing and In-House Facilities Management – A Brief Comparison
??????????? As opposed to out-tasking, outsourcing is giving someone outside of the organization full management and decision-making power over a particular activity (such as maintenance). Three or four years may be covered under the management agreement for the outsourced operation.
??????????? On the other hand, outsourcing entails maintaining overall technical competency and decision-making authority within the organization while leveraging temporary speciality services from outside providers to augment internal resources (such as labor and technical experience). Instead than having the services or goods delivered by internal resources, outsourcing is the practice of contracting out to an outside vendor. It is crucial to make sure that the organisation's mission and long-term goals and objectives are met while trying to outsource.
??????????? In other terms, outsourcing is a kind of privatization in which an organization contracts with an outside company to carry out certain tasks or supply services.
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?2.2 ????? Facilities Management Standard Service Category
??????????? FM is not just about a support service of a business. A variety of important business problems, including risk management, productivity, reputation, corporate social responsibility, and the talent agenda, may benefit greatly from best practices in facilities management. Poor FM may also negatively affect these problems.
??????????? The type of FM services that each organization provides and the procurement process vary from one another. According to Harler (2000), the core facilities are those that directly serve the company, and non-core facilities are those that help the business secondarily. Therefore, any activities that do not increase the organization's revenue should be regarded as non-core because they are not central to the organization's purpose.
??????????? Based on the organization's nature of business, aims and objectives, and user needs, core and non-core business are recognized. In order to accomplish quality services toward an attainable vision, goal, and objectives, purchasing of quality facilities often takes place at the strategic, tactical, and operational level.
??????????? Since FM inside a business encompasses a wide variety of operations, numerous non-core services are typically rented out or outsourced by the organization. According to Kremic and Tukel (2003), outsourcing is one of the better alternatives for the building owner to adopt as it could include more providers and result in more contracts being put out to bid.
??????????? The following term was provided by numerous authors in the FM studies in order to comprehend the facilities management contract service.
??????????? i. Single Service
??????????? Single service frequently procured as a separate exercise. The companies which offered single service are less likely to take risks with customers’ reputations when striving to achieve financial efficiencies. Other than that, the companies which offer single service usually are master and specialist in their field because they only focus on one type of activity. For example single service companies do the activities such as cleaning, pest control, security, and so on.
???????????? ii. Bundled Service
??????????? The bundled service delivery route is defined as two or more distinct processes or functions contracted to a service provider. This allowed the organization to outsource its soft FM to a single provider while retaining more direct control over service element. This type of service has many advantages including securing the benefits of cross-service efficiencies, economies of scale and professional development of the services. Bundling allowed it to do this while leaving the hard FM with another provider under the landlord contract. Another benefit of bundled service offers is that both client and provider have an opportunity to develop trust and grow the contract over time as partnering value is demonstrated. Examples of type of services which can be bundled together are cleaning, security, reception, landscaping and workplace management services.
???????????? iii. Integrated Facilities Management (IFM)
??????????? Integrated facilities management is the bringing together of several support services into a single management structure. It results in the simplified management and reduction in administration, as compared to managing multiple contractors, enables efficiency benefits to cost savings. This avoids duplication and direct resources towards a customer-focused service for the building user. This also can build an open relationship and clearly defined the objectives which shared by the client and the service delivery team.
???????????? iv. Total Facilities Management
??????????? Total Facilities Management (TFM) describes the delivery of a full service in the main areas of FM in an integrated and coordinated way, often including mechanical and electrical maintenance, building fabric, cleaning, catering, security, grounds maintenance, waste management and front-of-house services via one lead contractor. The core principle of TFM is the provision of a ‘joined-up’ service with a single point of delivery. This approach, when fully implemented, can provide customers with the following benefits:
??????????? v. Single-Multi Service
??????????? A single-multi service company may specializes in one or more services which often provide and procured the non-core services.
????????????vi. Building Related Service
??????????? Provide all services related to building such as maintenance, cleaning and repair.
??????????? vii. User Related Service
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??????????? Provide services to building user such as catering, childcare and energy use consultation
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2.3 ????? The Best Practice for Outsourcing FM – The Integrated Facilities Management (IFM)
??????????? Through outsourcing, tasks are carried out using the trained staff of an external business as well as its resources for providing services and producing goods. According to Ernst & Young (2013), manpower reduction, increased efficiency, and cost savings were the three key drivers of outsourcing. For ongoing development, the effectiveness of FM outsourcing must be measured. Facilities management (FM) offers forms of assistance to a organization's primary activities, such as upkeep of the physical plant and repair of machinery. Businesses, especially large ones, are increasingly thinking about outsourcing their non-core tasks like FM, Lok, Opoku, and Baldry in order to maximize organization efficiency and cut expenses (2018). According to Haugen and Klungseth (2017), providers of FM services might potentially provide value in this area by enhancing employee efficiency, raising user happiness, and revolutionizing organization business processes.
??????????? The integration of all facility management agreements and internal plans under a single system and management group is known as integrated facilities management (IFM). The consolidation improves supervision, communication, and efficiency while also streamlining day-to-day operational management. It's frequently the last stage in the natural development of a company's facilities management hierarchy.
??????????????? Rarely do all the projects, vendors, and personnel involved in facilities management start out on the same work or flow chart. As employee involvement and improved coordination disclose what a facilities management department should own and where they may distribute internal and external building resources, it eventually embraces many organization operations issues. Integrated facilities management may assist with it. An owner of a building and facilities may gain a lot from integrated facilities management. The following are the main advantages:
?? A facility can have a comprehensive picture of the teams, maintenance, and work activities that are accessible thanks to integrated facilities management systems. As all activities become scheduled, recognized, and visible on a maintenance calendar, it provides structure and agility.
Bringing all maintenance requirements, vendor management, and services under one roof is a more strategic course of action. A facilities manager may handle their day-to-day operations while also managing larger initiatives and unexpected events. While maintaining agile processes, this integrated solution aids in the definition of known resources and the alignment of activities with existing maintenance workflows. The focus and openness of integrated facilities management allow managers to shift teams where they are most needed without affecting productivity.
For instance, jobs like plumbing and roof maintenance/replacement are often allocated to several departments and operational budget categories. Without integrated facilities management's situational awareness, a maintenance staff can easily become compromised when projects grow in size or demand more attention. Due to a project not being on their radar and running behind schedule, the facilities manager may suddenly need to pull in crews from another assignment or source work teams externally from suppliers to finish a job.
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Because no management or department has a clear understanding of how crews respond to and carry out work and maintenance, the majority of internal teams have duplication, redundancy, and duplicate coverage. Vendors are able to make financial problems worse for many of the same reasons. The use of integrated facilities management can save expenses thanks to its departmental, crew, and overall work views.
Efficiency in expenditure becomes second nature with the increased transparency and focus that integrated facilities management offers. Managers are able to tell right away when budgets need to be adjusted due to inefficient workflow and low output. When issues like the ones mentioned above are rapidly fixed, crew job assignments and performance are better aligned, resulting in decreased operating expenses.
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The key concept in integrated facilities management is consolidation. A maintenance department is always in demand, let's face it. In addition to managing facility maintenance duties and preventative maintenance, they also manage a variety of reactive work that comes in virtually daily from stakeholders throughout a facility.
The initial choice is internal teams, however occasionally suppliers are given work through various work contracts and agreements. Managing vendors may be challenging. By consolidating procedures into a single service contract based on facility requirements, integrated facilities management reduces all that paperwork. A manager may more clearly describe the tasks that need to be completed and the potential roles for internal and external resources in continuous improvement thanks to integrated facilities management's openness and focus.
?3.0?????? Conclusion - The Decision to Adopt Integrated Facilities Management
??????????? The majority of businesses subcontract services to various suppliers, and the list of services that are included in facility management is extensive. This time-consuming segmented strategy can frequently distract facilities owner from concentrating on their primary business obligations. Managing several suppliers and obtaining facility information from a dozen various sources is ineffective, disorganized, and challenging to manage.
??????????? Consolidating and simplifying, reducing gaps and granting customers more cost control are all benefits of outsourcing all FM services to a single team of professionals. IFM is a tried-and-true method for task management that makes work quick and easy. Less contracts, teams, and resources need to be managed as a result of the idea, and all management-related duties can be seen from above. A range of operational cost-saving opportunities come from the organization's ability to make better educated decisions at every level thanks to this comprehensive understanding of all the moving pieces. It's simple to spot and easier to fix areas where they're overpaying, being wasteful or inefficient, or having budgetary gaps.
??????????? When it comes to integrated facilities management, technology is crucial. As the name implies, IFM is all about integration, which includes software solutions capable of bringing all different components of facilities management onto a single platform. A complete integrated workplace management system (IWMS) may make integrated facilities management considerably easier to adopt by offering a single point of management for all systems and operations. Good software can provide a single user interface through which important FM activities like as space management, move management, and work order processing can be managed. It can also provide the necessary information and analytics to make integrated facilities management even more successful, as well as software connections that keep all departments up to date and connected.
??????????? The benefits of having a single business offer fully integrated facilities management services are just a few of them. Additionally, an integrated facilities management company will assist the organization in achieving success on all levels. The proper facility management partner should have a significant influence on all aspects of the organization's facilities, from increasing efficiency to enhancing quality and cutting costs.
??????????? Industries are moving away from a single FM outsourcing strategy that serves all of their facility needs and toward an integrated services approach. Facilities owners may enhance the whole client experience, maximize how the space is used, and eventually reduce total cost of ownership with a single, integrated strategy. An integrated facilities management strategy's true advantages become rapidly and frequently clear. The IFM strategy is ideal for owners who are prepared to get greater value, efficiency, and simplicity.
??????????? Therefore, based on this premises, as a building owner, is it a more profitable and convenient situation to choose the IFM approach. In this way, as building owners, they will be able to give a better focus to more important matters and give space to the IFM company to manage the building more effectively and efficiently. The IFM firm with the insight and market experience can assist the customer in staying on track through the routine of a demanding and unique procedure for the facilities owner.
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REFERENCES
1.???????????? Alexander, K. (1996). Facilities Management: Theory and Practice. London & New York: Taylor & Francis Group
2.???????????? Belinda Mather-Derrick and Deborah Rowland (2014).Facilities Management Service Standards – Within the Central Government Office Estate. Version 3.4 01/03/2012.
3.???????????? Edward Sullivan (2005): Building Operating Management, p 27-30
4.???????????? Encon Y.Y. Hui and Albert H.C. Tsang(2004) : Sourcing strategies of facilities management Journal of Quality in Maintenance Engineering Volume 10 · Number 2 · 2004 · pp. 85-92
5.???????????? Ernst and Young. Outsourcing in Europe: An Indepth Review of Drivers, Risks, and Trends in The European Outsourcing Market; EYGM Limited: London, UK, 2013.
6.???????????? Harler, C. (2000), “Opting for outsourcing”, Business Communications Review, Vol. 30 No. 7, pp. 56-61
7.???????????? Haugen, T.; Klungseth, N.J. In-house or outsourcing FM services in the public sector—A review of 25 years research and development. J. Facil. Manag. 2017, 15, 262–284.
8.???????????? Kremic, T. and Tukel, O.I. (2003), “Assisting public organizations in their outsourcing endeavors: a decision support model”, working paper, Cleveland State University, Cleveland, OH
9.???????????? Lok, K.L.; Opoku, A.; Baldry, D. Design of sustainable outsourcing services for facilities management: Critical success factors. Sustainability 2018, 10, 2292.
10.???????? Noor, M. and Pitt, M. (2009). A Critical Review On Innovation In Facilities Management Service Delivery. Facilities, 27, 211-228.
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