Outsourcing Facility Management

There are “Pro’s and Con’s” with any business strategy, Facility Management outsourcing is an important business strategy decision for Fund Managers, Building Owners and Corporate Real-Estate Agents (CRE) alike. The point of this article is to clarify the viability of outsourcing facility management services and what parameters might be considered in choosing a Facility Management Provider. Part of the decision making, including Price, Operations, Delivery, Results, Business Relationship and Profitability.

“Single Point of Responsibility :

The major reason for outsourcing Facility Management is to achieve a single point of responsibility; one phone number and one account manager which takes care of their client in an effective and proactive manner. The Account Manager not only serves to keep the client informed, but supports decision making with information which is up to date, relevant to the current market, and has considered factors such as price, availability, sustainability, obsolescence, and asset investment/management.

D.I.Y Facility management – don’t do it:

A single point of responsibility is a major savings for the Fund Manager or Corporate Real-Estate Agent. By providing a single point of responsibility, which actually works, the strategy relives the Professional of the indirect tasks such as training staff. The strategy also relives the Professional from making the common or typical mistakes an untrained facility manager might make. This also transfers the risk and cost of the mistakes to the Facility Management Company. “Do it yourself” Facility Management exposes the building owner to more risk than they might actually be aware of.

Trust account management :

Clients, such as Fund Managers, Corporate Real-Estate Agents have Trust account management responsibilities; budgets are not just a term on a spread sheet, but a reflection upon the performance of the investment and the obligations and responsibilities of the trust account management. Penalties for trust account mismanagement are huge, not to mention the sheer inconvenience. It’s imperative the facility management supplier understands these responsibilities and is aware that the owner is not a bottomless pit of works orders.

Sub-contractor management :

Sub-contractors can make light work of the Facility Management process as well as be a “boat anchor”. A proactive sub-contractor whom looks beyond their scope and provides insight into performance opportunities and cost savings strategies within the building, without the cumbersome attitude of making demands and leveraging, is a quality that is sought after and encouraged. They are sometimes a little more expensive, but the returns are there and the business relationship is usually lengthy.
The Facility Management Company will have a group of vetted and trusted suppliers and sub-contractors for most types of works. The relationship between these suppliers and the FM Company will be the leverage for performance and delivery of the supplier. The suppliers must perform for market price, availability, delivery and sustainability to maintain their stature with the FM Company. The suppliers and sub-contractors come under the responsibility of the FM Company to ensure parameters and responsibilities are met and delivered to the Fund Manager/Owner/CRE Agent.

Tenant Liaison :

The ideal Facility Management services provider will employ a responsible and effective building manager for day-to-day tasks as well as tenant liaison. Apart from the obvious benefits to the Fund Manager/CRE Agent, it also assists the FM Company in terms of delivery and monitoring outcomes. The Building Manager should be a part of the single point of responsibility strategy with the facility management services company, not a separate supplier.

Reduce you Liability :

The opportunity for the Fund Manager/CRE Agent to reduce their liability in outsourcing the facility management services is a significant transfer of risk. It’s difficult to quantify in a price to benefits scenario, but the reality is crystallized when there is an event on site that must be taken care of the by the Facility Manager. The execution and minimization of Risk falls to the FM company, making sure all insurances are in place, maximizing “workplace and health safety” systems and strategies, and transferring their risk back to the suppliers of the FM company wherever necessary.

Facility Management task :

The most important function of the Facility Management Supplier is to deliver a process that is effective, reducing risk and improves performance which adds value to the facility. The Facility is a business after all.

Nigel Wraight
Principle
Wraight Property

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