Deciding whether to outsource your organization’s facilities management (FM) services takes careful consideration, planning, and a thorough evaluation of your business goals and competitive landscape. Many multi-site companies reach a point when their operations become so complex and geographically dispersed it’s nearly impossible to handle all FM functions in house.
In addition, advances in FM technology have improved operational efficiency, making outsourcing a potentially attractive alternative to the steep investment typically required for an in-house upgrade.
Whether you choose to outsource all of your FM services or a portion of your program to a third-party solution, it’s helpful to know how these decisions can impact your day-to-day FM operations and your business more broadly.
Here are some of the primary pros and cons of outsourcing at least a portion of your FM program to help inform your decision process.
Pro: Increased Efficiencies
Leveraging an outsourced Integrated Facilities Management (IFM) solution can help increase on-the-ground program efficiencies and boost productivity companywide. For example, a state-of-the-art work order management system, such as NEST Facilitate, is relatively easily implemented (usually taking about 90 days) and can help automate repetitive tasks, facilitate logistics, and streamline workflows.
Outcomes include time saved, increased first-time fixes, and less equipment downtime一which translate to dollars saved. And while in-house tech upgrades are possible, they tend to be large complex projects requiring long audit and implementation runways, significant disruptions, and big budgets.
A quality IFM partner can also increase efficiencies by sourcing and scheduling service providers and contractors. When you outsource these and other time-intensive tactical tasks, your team can focus more on strategic initiatives to move your company forward.
NEST’s IFM solution also includes 24/7 access to its nationwide Independent Service Provider (ISP) network. In the case of a no-show or emergency fix, NEST sources all needed providers and handles all logistics一day or night.
Pro: Cost Savings
One of the primary benefits of partnering with an IFM partner such as NEST is to move away from legacy cost models using hourly rates, trip charges, emergency fees, overtime, and subscription “tech fees” for technology platform access.
When FM is managed as a series of siloed tasks across multiple sites using legacy cost models, synergies are lost amid hidden program interdependencies. For example, aside from an on-site HVAC repair itself, there is a marginal loss in foot traffic (and revenue) when a service provider can’t get to a retail store for a same-day repair. Legacy systems don’t systematically account for these lost dollars一or their impact on the overall program.
Managing the program with a total cost methodology is a more holistic approach. Enhanced program visibility helps optimize resources program-wide to drive hard dollar savings for significant spend reduction.
With the expertise of NEST’s Financial Planning & Analysis team (FP&A) on your side, managing your budget is also more efficient, with opportunities to uncover additional cost savings possible.
Pro: Access to Expertise
Outsourcing facilities management provides access to specialized expertise and resources that may not be available in house.
For example, many of the professionals at NEST have 30+ years of experience in retail and facilities management, including in HVAC, janitorial, landscaping/exteriors, technology, and financial analysis. Their deep understanding of the latest technologies, best practices, and up-to-date benchmarking in these areas can lead to improved service delivery and overall facility performance.
Pro: Enhanced Agility
In today’s rapidly changing business environment, companies must make decisions, adapt to new circumstances, and quickly respond to customer demands. Outsourcing facilities management to an IFM solutions partner can provide the enhanced flexibility required to thrive in this dynamic ecosystem.
For example, retail companies able to modify their in-store cleaning protocols or layouts to accommodate the need for greater health protections during COVID-19 fared better than those that couldn’t. Outsourcing FM duties enables companies to rapidly adjust staffing levels and service delivery to meet changing demands, and can also offer a range of services to meet specific facility needs.
Pro: More Program Insights
While obtaining the right data and uncovering related trends isn’t impossible with an in-house FM program, it’s exceedingly difficult with a large store fleet and legacy technologies.
An IFM solution such as NEST’s can provide full program visibility with top-of-the-line technology, data visualization tools, and analytics to uncover the data that matters and insights that drive savings.
For example, NEST Facilitate enables real-time service verification, which means critical field input is easily included in the calibration of key program metrics. With enhanced visibility down to the store level and across locations, regions, work orders, and budgets, decision making is faster and better.
Pro: Risk Mitigation
Outsourcing facilities management can help mitigate risk by transferring responsibility for compliance and regulatory issues to the IFM service provider. This can reduce liability risk and ensure facilities are being managed per relevant regulations and standards.
Depending on your store locations, finding reliable, licensed contractors in your area can be challenging. But by outsourcing your FM services, you can leave service provider procurement to the pros, again allowing your facilities team to spend less time finding reliable technicians and more time focusing on strategic initiatives.
NEST’s ISP includes more than 27,000 fully-vetted service providers nationwide, with primary, secondary, and tertiary providers assigned to your sites. This significantly reduces, if not eliminates, service disruptions. NEST also uses Service Level Agreements (SLAs), ensuring your company’s program specifications are met every time, and pricing is predictable.
Con: Less Direct Control
Though it holds the potential to alleviate many burdens, outsourcing your FM program also means you must relinquish a certain degree of control over some of your operations. As long as your FM partner understands your business, industry, and brand, letting them handle part or all of your FM program won’t harm your organization.
NEST, however, takes it one step further. They assign a Senior Client relationship manager to oversee your account and hold regularly scheduled meetings, including your account team, to ensure you stay fully apprised of your program operations.
Con: Employee Concerns
Merely mentioning the word “outsource” to some employees can incite fear, especially when the services being outsourced have historically been handled by internal employees. Some may worry they will be rendered obsolete or their jobs will be jeopardized if an FM provider is brought on board.
More often than not, employees will benefit from an IFM provider that brings added efficiency and agility to the program. Existing employee roles are likely to become more streamlined and strategic, and responsibilities tend to increase because more can be achieved with a more efficient program.
In addition, NEST’s IFM solution is designed to scale with the company, and scaling typically increases demands on existing FM programs and employees. If a company isn’t growing, its FM program may decline over time, and that can lead to job losses.
The Cost Question
Despite perceptions that outsourcing is always expensive, outsourcing with the right IFM partner improves company performance, strategic positioning, and its bottom line, for years to come.
Sticking with an outdated in-house FM operation might be less expensive today, but can ultimately constrain an organization’s ability to grow, if not survive, in the long run.
NEST’s IFM solution empowers companies to do more with less and scale operations up, down, or laterally, faster and more efficiently than a standard FM program一all essential capabilities to staying competitive in the current market environment.
Finally, If your organization is considering outsourcing FM operations to an external provider, be sure to do your research and thoroughly vet your potential partner before moving forward. Focus on finding an IFM company with extensive experience and in-depth knowledge of your industry, brand, and what it takes to drive program savings and performance.
Contact NEST today to learn more about how our Integrated Facilities Management solution can benefit your organization now and in the future.
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