Increasing Operational Flexibility
In-house staffs sometime find it difficult to adjust to changes inherent to any business. Events like facility closings, production
realignments, and cost-cutting initiatives can be traumatic, requiring retraining, redeployment or, in the worst case, layoffs,
which tend to be perceived negatively by both investors and local communities.
An outside service provider, on the other hand, can adjust easily to change. It can mobilize quickly to accommodate growth,
reallocate staff for new production or operational alignments and, in the event of staff reductions at a given site, simply
reassign people to other client accounts.
MAKING OUTSOURCING WORK
The benefits of outsourcing are undeniable, but making the process work presents special challenges. Outsourcing is a complex
exercise that touches issues ranging from the organization's strategic goals to the loyalties and daily concerns of rank-and-file
employees. To launch outsourcing successfully, a company must approach it with care and discipline. Here are seven keys to
Develop Detailed Agreements
Both parties must know what work is and is not included in the contract; what level of service is required for each task;
and what constitutes acceptable performance. The outsourcing company must spell all this out before seeking proposals. It
is necessary to detail each site's scope of work.
Because many services can be outsourced (Table 1), defining the scope of work and service levels can be tedious. A three-step
process makes the job easier.
Table 1. Categories of Facility Outsourcing Tasks. The scope of tasks in facility management outsourcing can be broken into
three basic categories.
First, identify the specific activities that will be outsourced.
Second, set service levels and reasonable response times for each service. Service levels should be outcome-based, rather
than prescriptive (Table 2).
Third, set key performance indicators (KPIs) that are specific and easy to measure. For example:
Table 2. Prescriptive vs. Outcome-Based Service Levels
- For janitorial service: Satisfactory property inspection reports
- For storage warehouse climate control: Zero time outside specifications
If these steps are followed, the outsourcer and service provider know exactly what is expected and whether expectations are
Keep the Proposal Process Simple
The outsourcing process typically includes Request for Information (RFI) and Request for Proposal (RFP) stages. Well-constructed
RFI and RFP documents can make it easy for service providers to submit bids that enable meaningful comparison.
The purpose of the RFI is to identify a short list of companies qualified to provide the needed services. Ask for information
- Company background and financial information
- Operational capabilities and service delivery models
- Customer service approaches
- Technologies used
- Performance measurements
- Ways of achieving cost reduction