Why bundling outdoor FM services will take the stress out of estate management
Andy Barry, managing director at outdoor estate compliance experts, Outco, asks us to imagine a familiar paradox: “Company A spends ten million pounds on facility management (FM) outsourcing. £9m goes to a handful of major contracts – fulfilled by large and highly professional providers that – for the most part – prove relatively predictable and simple to manage.” The last million is, he says, where things get tricky.
Once core demands are dealt with, there remains a glut of small scale needs which are fulfilled by a patchwork of small contracts and smaller contractors, which, says Barry, consume a disproportionate amount of time to procure and manage:
“We all know the 80/20 rule about working smarter in business that states that 80% of the gains can come from 20% of the effort. With outsourcing, this rump of small yet time consuming contracts is an oppressive 20/80 burden.”
The problem, he explains, is that for larger companies managing multiple sites, the lack of a consistent approach and the absence of the operational finesse of larger outsourcing partners makes procurement and management a major challenge.
He gives the example of a one of the UK’s largest supermarket chains, which was meeting their outdoor FM needs in exactly this way: “Thirteen different services around their stores and distribution centres were being fulfilled by six different companies. This involved dealing with six different help desks, six different portals, six invoices and required a large team to manage the relationships. While clearly defined responsibilities provided clarity, it also meant that thousands of ad hoc tasks around the store portfolio would be left unattended.
Working with the supermarket’s main FM partner, Barry says that Outco developed an alternative approach that replaced these multiple contracts with a single bundled service offering for all outdoor FM requirements.
“Under this new strategy we trained 30 two-man teams to be able to handle the breadth of services that were previously delivered by six different contractors,” he tells. “This change brought clear financial benefits – removing approximately 13% of the cost base for the supermarket.”
Each team would have responsibility for a relatively small number of sites allowed them to gain a thorough understanding of the particular challenges of a site and offered a continuity of service to the store managers.
Barry says that the bundled service approach is not exactly new to the facilities management world, but that it has so far been a comparatively immature market – which is why he believes that now is the time to bring a comprehensive, bundled and standardised approach to outdoor FM. “The market is ready for this change, and as regulatory and compliance pressures increase for estate owners managing outdoor environments, such an approach can help deliver the professionalisation of outdoor FM that is long overdue,” says Barry.
He adds that technology has changed the game, offering opportunities that did not previously exist: “Across every industry, digitisation is transforming operations that were once time consuming and inefficient – and tackling those stubborn 20/80 challenges. Outdoor FM will be no different and this transformation will be more easily achieved when services are standardised and consolidated. “
This was first published in Retail Destination Fortnightly. Click here to subscribe.