In my last article I discussed the growing importance of PPM in the defence sector and how in light of the Oroville Dam’s failings, resilience has clearly never been more important in protecting critical infrastructure from increasingly severe risks.
However, while there are a whole host of solutions and services designed to mitigate the impacts of flooding, corrosion, and ageing infrastructure, I’ve noticed there is little dedicated support available to help FMs become more resilient.
Perhaps this is because FMs are usually the ones delivering resilience services to their clients, albeit often through outsourced specialists. We must also bear in mind that resilience has an entirely different meaning for FMs than it does for say, DNOs protecting substations from flood water ingress.
Let me put things into context.
The Resilient FM
As client organisations begin to identify their growing vulnerabilities with a newfound clarity (take UK data centres’ growing reliance on electrical infrastructure for example), many have come to demand a more output driven model in FM contracts.
While there are obviously many FMs offering least-cost, compliance only services to satisfied clients, we cannot ignore the fact that there are also a growing number of organisations that expect their service providers to actively add value and protect key assets.
In instances where they cannot deliver this standard of services, FMs will likely find their efficacy called into question and ultimately, their contracts in jeopardy. Resilience in FM therefore requires that providers’ offerings can evolve in tandem with increasingly niche and challenging client demands.
This is where I believe consolidating suppliers plays a key role.
Overcoming Fragmented Supplier Bases
Because of the varied risks client organisations now face, many FMs are diversifying their services through specialist third party support. Bearing in mind that Adler & Allan is one of the largest specialist FM support service providers in the UK, this approach is definitely one I am in favour of.
That being said, where FMs bring in too many third parties to deliver niche services for clients, there is always the risk of fragmented and overly complex supplier bases. This can then cause needless expense, loss of control (and therefore quality), and duplicated efforts from crossovers in capability.
What I propose as an alternative is for FMs to consolidate suppliers, using the niche services to a smaller number multi-disciplinary experts that excel in more than one specialist area. This is an approach that has been growing in popularity since 2013.
“Companies are becoming more interested in exploring opportunities to consolidate multiple services from single suppliers as a way of improving value.” – Mitie, 2013 –
Where there are obvious crossovers in supplier capabilities, consolidation can help FMs in a number of ways.
Reducing Non-Compliance and Poor Performance: According to cost-reduction and process improvement experts, The Hackett Group, consolidation helps ensure compliance.
Although there will naturally be differences in how suppliers each deliver against SLAs or adhere to regulations, a general rule of thumb is that it is easier monitor a smaller pool of suppliers and therefore identify and address poor performance.
Increasing Efficiency: Supplier consolidation tends to increase procurement process efficiency, reducing the resources required to effectively manage suppliers. Less suppliers generally means less transactions, less time spent managing relationships, and less resources spent sourcing suppliers.
More Strategic Relationships: Wherever a large number of parties exists, at least some silos and instances of bureaucracy can be expected. By focussing on a smaller, more concentrated pool of suppliers, FMs can work more closely with them and exercise greater control over both delivery and how this aligns with client organisations’ strategic aims.
Adding Value For Increased Resilience
It’s no secret that an increasing number of organisations now recognise the importance of protecting critical infrastructure. And while bringing on board various specialists to enhance capability is a great way for FMs to deliver this protection, FMs need to avoid the dangers that come with reliance on a wide range of third parties.
By entrusting a small number of multi-disciplinary experts to offer specialist services, FMs can not only add value, lower costs, and increase the profitability of contracts, they can exceed client expectations without compromise.
This is what I believe resilience looks like for FM service providers.
For more information on Alder & Allan’s comprehensive range of specialist Facilities Management and defence support services, visit our dedicated website.