Outsourced FM services vs self-delivered

It’s estimated that two thirds of FM services are outsourced as it’s seen as the best way to increase efficiency and tap into expertise. However, there has been a recent trend towards the adoption of self-delivered solutions. How can FM’s determine which approach is best for their needs?

THE FM CONSULTANT’S VIEW
BERNARD CROUCH,
DIRECTOR, ACUMEN FM

Forty years ago, facilities management was a still newish term, but there was another new term which the FM sector was talking about, outsourcing. Outsourcing promised the benefits of improved service delivery, cost savings, innovation, expertise and flexibility.

The private sector saw the opportunity to reduce directly employed headcount, make cost savings and enjoy those benefits while focussing on their core services, while the public sector was keen to make cost savings and introduce outside expertise and flexibility. Outsourcing however came with some possible drawbacks:

• Quality concerns
• Contractors not understanding the organisation
• Loss of knowledge (client side)
• Risk of contractor failure (Carillion etc.)

The client needed to be an ‘intelligent client’ and carry out due diligence with well-developed and monitored KPI’s. A lean organisation might struggle to monitor outsourced contracts properly possibly leading to the quality concerns mentioned earlier.

Recent years have seen issues around large-scale privatised contracts. Carillion’s collapse highlighted the risks of a major contractor failing and the repercussions this would have for an organisation. This led to the Government reviewing and reconsidering outsourcing.

A senior FM managing multiple sites has recently insourced, moving back to in-house hard services provision. The reasons included there being very poor communication between the contractor and the client. An engineer would respond to an issue raised on the help desk and frequently the end user and/or the FM in that building would effectively be out of the information loop and not know or understand what had been done, or if not, why it had not been done.

The Head of Facilities having assessed the situation initially decided to directly employ (fully funded) additional staff as an interface between the hard services contractor the internal teams and end users to resolve those communication problems. The contractor then stated they intended to add an additional charge for the privilege of having some fully funded in-house staff to improve communication between their teams and end users. This was the final straw for this organisation who have since insourced hard services with a directly employed engineering team including both static and mobile engineers.

Where a contract has not met expectations and has been retendered with different contractors also not achieving the desired outcomes, it would be extremely beneficial to carry out a review and establish if it would be better to either insource or continue to outsource. Dialogue with other organisations that have insourced could also be advantageous to understand and identify what issues may arise and which is the best course of action.

THE FM SERVICES PROVIDER’S VIEW
JAMES BRADLEY,
CEO AT CHURCHILL

There are various factors to consider when determining whether to outsource FM services or to self-deliver. However, it’s important to look beyond the perception that outsourcing automatically equals greater efficiency and to challenge the misconception that FM services are simple or commoditised. While it’s true that outsourcing allows businesses to concentrate on their core operations, the real value lies in the expertise and specialised knowledge of an outsourced partner – and establishing a long-term relationship with the service partner enables the partnership to benefit from ongoing investment.

Outsourcing FM services isn’t merely about shifting responsibilities; it’s about tapping into a reservoir of specialised skills and industry knowledge that can significantly enhance operational efficiency. FM providers live and breathe their specialisms—whether it’s cleaning, maintenance, security or guest services. This deep focus allows them to innovate, adapt to sector-specific challenges, and consistently apply best practices that an in-house team, which might be spread thin across multiple tasks, could struggle to achieve.

Specialist providers have access to the latest technologies, products, and software, which are essential for maintaining high standards of service. These tools, combined with their experience across various sectors and building types, enable them to execute tasks more effectively than a generalist in-house team could.

Having the same partner deliver multiple services can be more efficient, but carrying out due diligence is important to ensure that you still receive that specialist benefit. Once a client is confident that they have the right partner, they can focus more on their core business, knowing that their FM needs are in expert hands. But outsourcing shouldn’t be about just ticking boxes. A true FM partner will not only meet the basic requirements but will also drive you to improve, offering insights that can enhance the workplace experience and contribute to the overall success of the business.

This can extend to enhanced support of the environmental and social impacts of operations. For instance, a good FM partner can help a business contribute more effectively to its ESG strategy, particularly in areas like reducing Scope 3 emissions or enhancing social impact initiatives. This broader perspective and reach are often beyond the scope of what an in-house team can manage.

Partnerships are of course a two-way street. Without fail, the most successful outsourcing partnerships are where the client is willing to be open to integrating with the supply chain partner to unlock the full potential. This is true for FM or indeed any supply chain partner.

Each distinct service can drive significant value, influencing everything from employee productivity to the overall atmosphere and performance of the business. This is why businesses should consider experts who can contribute to a better workplace, rather than defaulting to in-house solutions simply because no one else wants to deal with these tasks.