In FMJ's regular monthly column, our team of FM experts answer your
questions about the world of facilities management
THE FM CONSULTANT’S VIEW
NIGEL FORBES, MANAGING PARTNER AT LITMUS
PARTNERSHIP
In the past two years,
there have been
some big changes
within the facilities
management sector;
no more so than
in January 2018
which saw Carillion
collapse and go
into compulsory
liquidation. The
e ects of this
resonated with many
of us and served as a
stark reminder to the
FM industry around
the importance of contract terms and proper
assessment of the financial risks they are
willing to take. Since Carillion, there has been
an increased sense of cautiousness within
the public sector; and understandably so.
There have also been reports of some
organisations and businesses choosing
to bring services in-house; not simply as a
result of the Carillion collapse but for various
reasons. For some, moving to an in-house
provision model could be the right decision and
many do consider this option now, rather than
automatically re-tendering.
However, there are also many where outsourcing is the
more suitable model. Indeed, there are plenty of organisations
20 SEPTEMBER 2019
that would benefit from
outsourcing but perhaps they
are hesitant due to previous
experiences. In some cases,
providers may have overpromised
and under-delivered
or costs could have gradually
increased from what was originally
proposed when the contract was
agreed.
The problem isn’t in outsourcing itself; it’s
in how the outsourcing relationship is set up. It
seems, in some cases, there is disconnect between the
client and contractor’s concept of what success looks like. It’s
about aligning both sides to be ‘one team’. Given the changing
landscape, adapting the relationship between client and
contractor to reflect these changing times will help navigate
conceived ideas of cautiousness and concern. But how can
this new set-up be put in place? Where do you start, and more
importantly, what does it actually look like?
Currently, a typical contract is set-up to focus on ‘contractor
delivering against a set of KPIs and if they aren’t delivered
the contractor is penalised’ – usually in the form of a financial
penalty. It’s very much ‘us vs them’. Wouldn’t a more
collaborative style of working make more sense?
I came across a more collaborative business model – Vested
– which is gaining traction across Europe and the US, and
is helping to transform high-performing, strategic client
and contractor relationships. Unlike traditional business
relationships, which are focused on win-lose arrangements, the
mindset behind Vested is not ‘what’s in it for me’ but ‘what’s in
it for we?’
We believe elements of this Vested approach could
revolutionise the way that clients and FM providers
work together. It brings benefits to both parties;
benefits that include:
• Mutual success for both: more than
the contractual relationship, Vested
commits both the client and the
service provider to the success of
FM CLINIC
The insourcing of FM
services is growing in
popularity. The report
‘Rebuilding Capacity:
The case for insourcing
public contracts’ from the
University of Liverpool,
recommends it for providing
service flexibility and the ability
to allocate resources where they
are needed. There are also many
good examples of successful outsourced
contracts, so is bringing FM services back in-house the
best option for businesses and organisations?
Nigel Forbes
ADVICE & OPINION
simply focusing on the success of
contract is set-up to focus on
‘contractor delivering against a
set of KPIs and if they aren’t
delivered the contractor
each other's overall business.
• Stronger partnerships: a more lasting
relationship is developed between the
client and provider, through a strengthened
Currently, a typical
sense of partnership.
is penalised’.”
– Nigel Forbes