Can outsourcing facilities management save your building?

by Liv Croagh
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The latest wireless sensors, robot cleaners and green energy deals may not be top of mind for companies focusing on core business as they emerge from pandemic mode. However, there’s a new breed of property manager for whom these tech advances will add up to significant benefit.

These experts, known as facility management partners, are coming to the fore. And as businesses rein in costs, non-core business activities are being outsourced. 

In fact, JLL estimates the global market for facility management will be worth a mammoth US$1.9 trillion by 2024. Alongside this estimate, JLL also identified that a well-crafted facility management plan can reduce a business’s property-related spend by 25 percent. Savings are typically found in energy consumption, property maintenance, workforce administration, training and supply chain management. 

In its new report Facility Management Outsourcing: Five steps for navigating the journey, JLL pinpoints the key benefits and pitfalls of this sort of partnership.

JLL’s Head of Sales, Work Dynamics, Australasia, Nick Moore says that outsourcing is a valuable strategy for businesses keen to concentrate on core activities.

“Once a comprehensive facility management partnership is in place, it will significantly reduce the effort, and cost spent running your property portfolio, whilst also accelerating your sustainability and compliance objectives,” says Moore.

“There have been enormous advances in this area, with automation, wireless sensors, machine learning and artificial intelligence helping to keep building systems running smoothly. A business might not have this technology expertise in house, but a leading service provider certainly will. 

In Facility Management Outsourcing, JLL recommends five steps a business should take when considering a facility management partnership:

  1. Clarify your goals. What do you hope to achieve? You may wish to spend less time and energy on facilities, be concerned about deferred maintenance or want new ways to improve efficiency.
  2. Collaborate with your stakeholders to identify needs and issues.  Your stakeholders might include the CEO, the executive leadership team, director of facilities and their teams.
  3. Explore options for achieving goals. This could mean a tweak of current in-house practice or the outsourcing of several operations. For example, to tackle deferred maintenance, you could retain a building assessment and asset management service for data-driven capital planning and maintenance.
  4. Design a transparent commercial construct. Unlike traditional procurement contracts, facility management providers often use outcomes-based contracts that focus on key performance indicators rather than on predefined tasks. In performance-based contracts, the partner’s fees typically are reduced if goals aren’t met, while shared savings and bonuses are provided for exceeding targets.

Communicate clearly to ensure a smooth transition. Your team will want assurance that the facilities staff they know and trust will still be on hand, that services will be easy to access and that the service provider is reputable and committed to transitioning employees.

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