FMJ.CO.UK CONTRACTS FOCUS
ROUNDTABLE
OCTOBER 2019 25
Q: When an organisation is considering
outsourcing some or all of its FM services, should
it be primarily to reduce risk, or for a variety of
sound business reasons?
Nick Platt noted that if risk is transparent, it’s
important to understand what you’re contracting
for, which can prove di icult within organisations
that don’t have an asset register or condition
surveys. “We see a lot of procurement, where
irrespective of what the FM is doing, procurement
and legal want to put everything onto the incoming
contractor, and that’s not particularly good
practice,” he said. “The first thing we would look
for is for both parties to fully understand the risk,
or admit they don’t really know where they are and
carry out some investigative work. That helps to
embed a culture of transparency and collaboration
from day one.”
The panel suggested that in terms of risk
transfer, FMs are not really transferring the risk
but asking suppliers to manage the risk on the
client’s behalf. As one FM remarked: “From a client
perspective if my services aren’t working my client
will come to me, not the outsourced contractor.
This is why as a client it’s about resilience and
encouraging a process of full transparency, while
continuing to assess the risks and invest in
the infrastructure that supports my
business.”
Transparency across all
the parties involved in
an FM contract is a
crucial element.
You receive the
best service
from suppliers
when you have
trust in them;
particularly
when they
deliver technical
services that
you can believe
and trust in without
having to go to thirdparty
consultants. What
That comes back to the
collaborative procurement
process where everybody is openly
sharing data and having a strong view
on the risks, so that they can be
allocated properly and then decent
procurement decisions can
be made.”
is very encouraging is that
transparency is being enhanced within
the market as a result of better access to data – and
more knowledge equals better leverage.
However, a trusting partnership is much bigger
than data, said Joanna Lloyd-Davies. “It’s about the
organisation and how relationships work at every
level. It comes down to trust and collaboration,
working out which of your contenders suit you the
best. Fit is a very small word but it’s important; the
risk is all about the data you’ve got and investment
in people, money, time and so on. It’s also about
making sure that people on the front line are
actually understanding the message, as if they
don’t, you won’t get anything done.”
Q: What are the business conversations around
essentially insourcing that risk by bringing
services back in-house?
It was agreed that it takes a lot of work to bring
FM back in-house, because the trend in recent
years has been to outsource everything, from the
people to the technology. If you want to bring it
back in you’ve got to bring all those elements back
to the table. It’s also important to acknowledge
that if you’re going to take this route you’ve got to
take the risks on board as well. And for many
organisations some elements will
stay in-house while others
(particularly specialist
services) will go to
a supplier, or, as
one FM succinctly
commented, “you
don’t have to
dump it all out or
take it all back
in-house.”
Andrew Lunt
argued that
some of the wellpublicised
exits
from suppliers in
the marketplace are
a response to historical
risk transfer situations
where they haven’t performed
as they’ve taken on too much risk and
not understood it themselves. “That comes back
to the collaborative procurement process where
everybody is openly sharing data and having
a strong view on the risks, so that they can be
allocated properly and then decent procurement
decisions can be made.”
He recalled reviewing FM supplier options for
a major national property portfolio when he was
head of FM. “It was the reputational risk that we
were concerned about, which is why we insourced
and launched Salisbury Group. We had to insource
the CAFM system and all of the people, starting
with a management contracting approach and then
slowly insourcing the capabilities, beginning with
security, engineering and then cleaning. It’s been
a valuable process because we’ve got the shared
values with the property objectives and truly