Making good outsourcing decisions

Making good outsourcing decisions

Recently, businesses in the Channel Islands have been receiving conflicting advice when it comes to the procurement of facilities management (FM) services.

We appear to be at risk of going back to the days when price was king and quality an afterthought. However, what the demise of Carillion shows, and many others have discovered, is that this approach can be harmful to both service provides and clients alike.

If the emphasis is predominantly on price it not only tightens operator margins but impacts the performance of the building itself. Reducing the standard and frequency of routine plant and equipment maintenance compromises the operational capability of premises. It can also lead to significant cost implications for clients down the line.

Less obviously perhaps, client staff wellbeing and productivity is also put at risk as research shows employees are happier and more productive when working in well managed and maintained premises.

Building services engineers and operatives require ongoing training in order to ensure their safety such as working at height, in confined spaces or when operating heavy machinery. The cost of this training continues to go up in line with increasing regulation.

There is a shared concern within our industry that driving down price in an already low-margin sector will put pressure on some operators to cut costs, which could put their workforce and clients at risk.

The good news is that most strategic approaches to procurement tend to view quality and price as equivalents. At AFM, we see the procurement of facilities management services being no different and would encourage business decision-makers to consider strategies that enable sustainable, cost-sensitive partnerships to be nurtured between provider and client.

Carillion plc is a British multinational facilities management and construction services company. Carillion announced compulsory liquidation on 15 January 2018.