OUTSOURCING THE FACILITY MANAGEMENT, AND WHAT TO WATCH OUT FOR
More and more often, companies with real estate assets outsource their facility management (FM) to external service providers – often outsourcing the professional staff along with the services. This trend is amplified by the steadily mounting price pressure in the wake of the financial crisis. Hence it recommends itself to take a closer look at the key aspects in outsourcing.
On a positive note, such companies have the option to call on professional facility management service providers that have long come to apply the procedures, standards, and management approaches matching those of the manufacturing industry.
The Client Benefits of Outsourcing
From the client’s point of view, outsourcing ultimately serves the purpose of lowering the running costs of property management while maintaining the quality level. Here, the human resources to be outsourced represent the decisive cost item. Other key criteria include the reduction of the control effort on the client side while enhancing transparency and buying into the optimisation strategy of the respective service provider. After all, property portfolios that have been subject to ongoing redevelopment and periodic additions have often become rather complex in terms of building services and maintenance requirements, making it the option of choice to delegate comprehensive facility management concepts to professional partners. Objectives such as the long-term preservation of value or indeed the value increase of properties are clearly easier to achieve for companies whose core business is property and facility management. Similarly, a real estate service provider has an easier time controlling qualification needs and ensuring the efficient professional development of FM staff than would be the case with a company where facility management is just an internal support function.
Successful outsourcing in the field, and change management
Whether, and to what extent, outsourcing models actually work depends on a variety of factors. What figures prominently in addition to technical competence, adequate size, and regional presence, are reliability and the management experience of the FM service provider, especially with a view to the integration of new staff into existing structures. It is the only way to guarantee the performance of the contracted services vis-à-vis the client and to simultaneously provide continued development opportunities for the new employees.
STRABAG Property and Facility Services recognised the requirements for successful outsourcing early on, and expanded its know-how in the areas of commercial, technical and infrastructural facility and property management to include outsourcing competences. This puts the company in a position to implement specific services on the basis of proven service components and modular processes, which ensures quality from the start and creates the necessary transparency to identify and raise any savings potential. The deployment of IT systems throughout all service areas has become established practice and integral part of the production concept.
STRABAG Property and Facility Management has already had ample opportunity to showcase its integration and change management competence. For instance in 2006, when we smoothly integrated nearly 1,000 employees with facility management background from diverse Deutsche Telekom units. In 2008, we successfully took over 6,000 former DeTeImmobilien employees into STRABAG Group. Most recently, in April 2009, HypoVereinsbank commissioned the company to handle all facility management jobs for its portfolio of more than 900 owner-occupied properties. The assignment includes the technical and commercial facility management, as well as infrastructural services and the takeover of all staff that used to be active in the bank’s operative facility management.
An important factor for the collaboration is that principal and contractor cooperate in a spirit of partnership and communicate openly as precondition for the joint identification and implementation of goals. Cultivating an open communication also plays an important role for the relationship between the employees and their new employer. STRABAG Property and Facility Services actively secures the terms of the integration so as to ensure a smooth transition and future development of the acquired human resources. To this end, STRABAG Property and Facility Services regularly conducts staff polls in addition to reporting and monitoring the agreed quality and performance metrics.
The evolving trend towards outsourcing
It is not the first outsourcing wave that the facility management industry is experiencing. Well over eight years ago, particularly technology-driven groups such as Lufthansa, Siemens, and Deutsche Telekom began to outsource their facility management services. The next outsourcing wave to follow involves a number of management companies with real estate holdings, such as Allianz and HypoVereinsbank, which outsource the services formerly provided in-house to external service providers and entrusted their own staff to these providers. Meanwhile, the automotive industry has also started, if on a more cautious note, to outsource property services and to show increasing interest. That said, industrial companies remain comparatively reticent, all things considered. In the medium term, this is likely to change, though. For many companies are ever more critically looking into ways to optimise their cost items. It is therefore easy to imagine that industrial players will ride the next wave of facility management outsourcing.
Conclusion
The corporate world manifests a continued trend to outsource facility management services that is motivated by the wish to concentrate on the core business. The successful takeover of services and staff in the area of facility management necessitates structural and qualitative preconditions on the part of the incoming FM service provider.
A smooth integration of human resources in sync with a guaranteed service performance and the realisation of identified cost and efficiency gains is possible only by combining adequate structures and processes with communication and change management measures.
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Reasons for outsourcing
The requirements to be met by in-house facility management resources have continuously increased in recent years. Reasons to explain this include:
- the increasing complexity of facility management and diverse maintenance requirements;
- analogously, higher requirements for processes, quality assurance, resources, know-how, continued professional development, reporting, and
- the grown significance of the professional, value-driven management of portfolio property.
On a positive note, such companies have the option to call on professional facility management service providers that have long come to apply the procedures, standards, and management approaches matching those of the manufacturing industry.
The Client Benefits of Outsourcing
From the client’s point of view, outsourcing ultimately serves the purpose of lowering the running costs of property management while maintaining the quality level. Here, the human resources to be outsourced represent the decisive cost item. Other key criteria include the reduction of the control effort on the client side while enhancing transparency and buying into the optimisation strategy of the respective service provider. After all, property portfolios that have been subject to ongoing redevelopment and periodic additions have often become rather complex in terms of building services and maintenance requirements, making it the option of choice to delegate comprehensive facility management concepts to professional partners. Objectives such as the long-term preservation of value or indeed the value increase of properties are clearly easier to achieve for companies whose core business is property and facility management. Similarly, a real estate service provider has an easier time controlling qualification needs and ensuring the efficient professional development of FM staff than would be the case with a company where facility management is just an internal support function.
Successful outsourcing in the field, and change management
Whether, and to what extent, outsourcing models actually work depends on a variety of factors. What figures prominently in addition to technical competence, adequate size, and regional presence, are reliability and the management experience of the FM service provider, especially with a view to the integration of new staff into existing structures. It is the only way to guarantee the performance of the contracted services vis-à-vis the client and to simultaneously provide continued development opportunities for the new employees.
STRABAG Property and Facility Services recognised the requirements for successful outsourcing early on, and expanded its know-how in the areas of commercial, technical and infrastructural facility and property management to include outsourcing competences. This puts the company in a position to implement specific services on the basis of proven service components and modular processes, which ensures quality from the start and creates the necessary transparency to identify and raise any savings potential. The deployment of IT systems throughout all service areas has become established practice and integral part of the production concept.
STRABAG Property and Facility Management has already had ample opportunity to showcase its integration and change management competence. For instance in 2006, when we smoothly integrated nearly 1,000 employees with facility management background from diverse Deutsche Telekom units. In 2008, we successfully took over 6,000 former DeTeImmobilien employees into STRABAG Group. Most recently, in April 2009, HypoVereinsbank commissioned the company to handle all facility management jobs for its portfolio of more than 900 owner-occupied properties. The assignment includes the technical and commercial facility management, as well as infrastructural services and the takeover of all staff that used to be active in the bank’s operative facility management.
An important factor for the collaboration is that principal and contractor cooperate in a spirit of partnership and communicate openly as precondition for the joint identification and implementation of goals. Cultivating an open communication also plays an important role for the relationship between the employees and their new employer. STRABAG Property and Facility Services actively secures the terms of the integration so as to ensure a smooth transition and future development of the acquired human resources. To this end, STRABAG Property and Facility Services regularly conducts staff polls in addition to reporting and monitoring the agreed quality and performance metrics.
The evolving trend towards outsourcing
It is not the first outsourcing wave that the facility management industry is experiencing. Well over eight years ago, particularly technology-driven groups such as Lufthansa, Siemens, and Deutsche Telekom began to outsource their facility management services. The next outsourcing wave to follow involves a number of management companies with real estate holdings, such as Allianz and HypoVereinsbank, which outsource the services formerly provided in-house to external service providers and entrusted their own staff to these providers. Meanwhile, the automotive industry has also started, if on a more cautious note, to outsource property services and to show increasing interest. That said, industrial companies remain comparatively reticent, all things considered. In the medium term, this is likely to change, though. For many companies are ever more critically looking into ways to optimise their cost items. It is therefore easy to imagine that industrial players will ride the next wave of facility management outsourcing.
Conclusion
The corporate world manifests a continued trend to outsource facility management services that is motivated by the wish to concentrate on the core business. The successful takeover of services and staff in the area of facility management necessitates structural and qualitative preconditions on the part of the incoming FM service provider.
A smooth integration of human resources in sync with a guaranteed service performance and the realisation of identified cost and efficiency gains is possible only by combining adequate structures and processes with communication and change management measures.
>> back
