Shift to full-service, facility-related outsourcing steadily increasing, survey finds

11/03/2006


Facility managers remain confident in the ability to save money and improve quality through the use of outsourcing, according to “An Inside Look at FM Outsourcing,” a new research report from the International Facility Management Association.

Companies are outsourcing with greater frequency today, hiring full-service vendors to provide many functions. Fifteen percent of the respondents’ companies now outsource, up from 3% in 1993. Two in five companies have brought services back in-house after outsourcing the service. Typically, the reasons are to regain control of the service, either in terms of cost, quality or response time.

The use of out-tasking, hiring individual specialized vendors to provide one or more services, has decreased from 91% in 1993 to 77% in 2006. The steepest decline has come in the past seven years.

The report, based on survey responses from 487 of the association’s members, also revealed that most facility managers believe that outsourcing can be the answer if they find the right service provider.

“We’ve seen outsourcing evolve into an accepted practice in running a facility management operation,” said Shari Epstein, associate director of research for IFMA. “More facilities are opting to establish longer-term contracts with full-service providers or reduce the number of contractors.

“Although outsource providers would like to build upon their relationship with existing clients, it’s difficult due to lack of communication and information offered by the client company,” Epstein continued. “One of the many challenges for a company and its employees is to develop a level of comfort and trust and let go of the day-to-day details of running a facility.”

One-half of companies have consolidated their vendor base to use fewer service providers during the past five years. The result is that for nearly one-half of companies, service providers are in a position of receiving substantially larger contracts than just two to five years ago.

More than one-half of companies have also saved money through outsourcing/out-tasking, and one-third have seen a quality improvement. These results are consistent regardless of whether the company is outsourcing or out-tasking.

Architectural, engineering and interior design services were outsourced with the most frequency, with 90% of respondents reporting that they outsourced these services. Those were followed by housekeeping services with 77%, property appraisals with 72% and roads, parking and garage maintenance with 70%. The largest growth among outsourced services between 1993 and 2006 was in the outsourcing of utility system maintenance, with a growth of 23%.





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