A mixed economy fm service model?

06 August 2018 | Herpreet Kaur Grewal

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This month we asked for your opinions on FM service outsourcing, Herpreet Kaur Grewal presents the results.

Will FM service outsourcing be increasingly focused on specialist services while cleaning and other more directly client-facing activities are brought in-house?

That's the theme of this month's FM World Think Tank. It's currently top of mind because the University of London, which has seen high-profile conflict with unions in recent months, intends to ensure outsourced contracts for as-yet unspecified specialist services while at the same time working with trade unions and contractors to change its contract model and take FM staff into the university.

The university says that it is "certain that a mixed economy will be adopted as this will give us the best balance of quality, cost and sustainability".

It is putting in place "contracts designed to provide both the specialist expertise and the flexibility to respond to the varying needs of the university". It is "currently developing our service models to define our requirements".

The question we're asking is - will we see more of this? Could more organisations move to running a mix of in-house and outsourced provision? And could this kind of model become popular outside the education sector? 

John Bowen

Time changes the strategy

There is always a pendulum effect in organisations, from centralisation to decentralisation and back being a classic model. These things can take anything from five to 20 years in my experience, but they happen because the benefits of moving to one position get eroded over time.

Outsourcing was once the way to go. Focusing on core business, having the specialists bring economies of scale to bear and so forth was all fine, and still is in many ways, but in others the barrel is being scraped and that is always going to be a catalyst for changing the strategy.

A lot of soft services have not enjoyed the same level of benefit when outsourced as hard services have. The latter have specific skill sets, equipment and compliance needs and it makes sense for specialists to deal with these, but the softer services have more affinity with an organisation's culture and values. Outsourcing them moves them away from these and also adds another layer of communication through the service level agreement and management process, so moving these back in-house makes sense.

John Bowen, ThatConsultantBloke.com

Adrian Cresswell 

Striking a symbiotic relationship

There is plenty of scope for the 'mixed economy' approach in the right sort of setting. And the model does lend itself well to universities in situations where standards need to be high and resources put to optimum use. 

In one university in the North East, daytime security is covered by in-house staff while AM Services staff cover out of hours. The relationship enables AMSG to support the university with more staff if needed and enables us both to share technology, best practice and training. At another Lancashire university, we were initially brought in to provide temporary cleaning staff over the summer period. Since then, the contract has expanded to cover specialist cleaning; carpet and upholstery cleaning; washroom services; and cleaning the nine campus bars on site. This long-standing partnership has been built on good communications and relationships with key heads of department and supervisors so that AMSG has become an integral part of the team, once again sharing expertise, experience and equipment.

We find a symbiotic relationship between in house service providers and outsourced specialist cleaning in the food manufacturing sector too, where high regulatory demand makes specialist cleaning more time-consuming and a drain on internal resources. Here once again the partnership relies on trust and a high level of technical expertise. Strategic outsourcing can allow companies to gain competitive advantage, allowing them to minimise downtime and focus on their core competencies.

Adrian Cresswell, managing director, 

AM Services Group

Simone Fenton-Jarvis

Who will go that extra mile?

In-house or outsourcing should always come down to "What makes the most business sense?" Businesses must look at the time, quality, cost triangle in relation to sustainability, the service provision they wish to offer and the effects on the business if standards fall. 

Support services exist so business can focus on their core competency. Building the right in-house teams requires patience, diligence and a clear understanding of the skills and service provision the company requires. There are many benefits; people will be trained to the company's specific needs, be available when needed, have a greater personal investment in making sure the job is done right and are more likely to go the extra mile; not even considering it will also mean costs are kept under control. This all becomes invaluable when a business-critical emergency arises such as a security breach; in those situations, who has the time to source a specialist or wait for your trusted regular contractor and then be potentially landed with an extortionate invoice?

If you tried to oversee all operations in-house it's likely it would take focus away from the key business. Outsourcing areas can free up time and the resources to take care of more important responsibilities. For me, standardised tasks like routine cleaning and equipment repair are good choices for outsourcing as it's outside of my team's core competencies. I think outsourcing will move further towards focusing on a specific skill or particular task whereby the service is acquired for the duration of the project and the specialist will focus on the issue at hand. 

Simone Fenton-Jarvis, chief workplace officer, Twinkl Educational Publishing

Ian Jones

There's no one-size-fits-all answer

I think the mixed economy already exists, certainly in my organisation. We have just moved out of a building we own and into landlorded premises but have retained in-house our M&E services and reception/concierge services and we took the opportunity to add our logistics and portering services to our in-house team. Every company is different, their needs and sense of what they feel is important to them will also be different - and as so often in this business there will never be one size to fit all. 

Ian Jones, director of workplace services & estates - HR, ITV plc