Benefits of Outsourcing

Outsourcing Facilities Management Services

FM outsourcing involves the handing over of an organization’s facilities management function to a specialist FM company. Not only is the FM company responsible for the day-to-day management of the client’s facility but also for the all maintenance and repair activities, including specialists sub-contracts (e.g. elevator and air-conditioning repairs and maintenance) as well as operational planning and staffing.

Benefits of Outsourcing FM Services

Several benefits can accrue to a client from the FM outsourcing arrangement. The main benefit being that the client can focus on its core business and not be distracted with facilities operation and maintenance issues. This will be handled by the FM company on behalf of the client so that the client’s management time and resources is freed up for its revenue earning activities.

Another key benefit is that the client will have immediate access to the FM company’s specialist skills, knowledge, and technologies (e.g. Computerized Maintenance Management Systems), which it would have to otherwise develop in-house. This can be time-consuming and costly. Most companies simply do not have the resources to fully develop the depth of capabilities/expertise that fully-integrated FM companies will have.

An FM company, with a large client base offers both economies of scale and scope. An example of an economy of scale benefit lies with the FM company’s extensive purchasing power. The FM company’s purchasing power allows it to negotiate better terms and discounts with suppliers and contractors than a client can achieve on its own. Economy of scope benefits are realized, for example, through the FM company’s range and scope of operations that allows solutions and technologies to the transferred from one client to the next. These would otherwise not be readily available to the client.

For an organization, human resources usually represent the second largest expenditure after facilities related costs (e.g. rents, property insurance, rates and taxes, repairs and maintenance). An outsourcing arrangement allows the client to trim or avoid the HR expenditure (recruitment, salaries and benefits, training) associated with an in-house FM department, as well as the associated risks and liabilities.

The examples identified above clearly demonstrate that FM outsourcing can be a very viable and effective method for delivering an organisation’s facilities management services.