Those of you that have read through my most recent posts will notice there’s been a clear emphasis on risk. To be more specific, you’re likely to have noticed that I’ve been focusing heavily on the increasing frequency and severity of flood risks, the growing vulnerabilities caused by infrastructural inter dependency, and the vital role data can play in mitigating such risks.
And with good reason.
While I’ve been vocal regarding the key role resilience thinking and an ‘Eternal Improvement’ approach can play in protecting our assets and infrastructures, I’d like to explain what this means for FM companies who rely on third party providers to deliver niche services.
Because of this widespread increase in risk (and the associated damages and business disruptions) FMs may find that for clients in sectors driven by security (such as defence and telecoms), commodity service delivery is not enough.
These sentiments were in fact echoed by Mitie in their 2013 report on the future of facilities management. The report mentions that, though facilities management is an industry largely driven by cost reduction and compliance, there are a growing number of organisations finding fault with the ‘penny-pinching’ model.
While there are of course many clients and FMs who operate on a mutually beneficial least-cost, compliance only basis, those with greater needs might find that frugality can sometimes come at expense of the quality of delivery.
As a result, where there are increasingly vulnerable and demanding client organisations looking beyond compliance, FMs and specialist suppliers might need to evolve their approach accordingly.
ISS reiterates this, stating that while cost continues to be a key competitive factor, the primary driver for outsourcing today is the superior level of expertise that FMs can offer, albeit via outsourced specialist service providers.
“Increasingly companies are finding that the ability to bring in specialist suppliers, particularly where complex technologies or services are concerned, does pay dividends.” – Mitie, 2013
With this in mind, I believe that there is room for FMs with vulnerable clients to move beyond commodity service provision toward an outcome-driven model that not only supports strategic objectives, but provides added value where clients need it most.
This is something I believe can be achieved with a more collaborative approach.
Building On The SLA Model
SLAs and KPIs tend to be task and output driven by definition.
While this approach effectively meets the needs of clients and FMs focused on compliance alone, for those looking to maximise value and the quality of delivery, the traditional model can feel restrictive, leaving little room for the innovation and autonomy needed to fully support strategic objectives.
“The best service providers will move to a more collaborative structure fundamentally rooted in equal responsibility, with a high degree of openness and information sharing.” – Mitie, 2013
I therefore believe that now is the perfect time for client organisations and specialist service suppliers to build on the traditional approach, working toward relationships that is governed by mutual trust. While consumption-based contracts and SLAs have countless merits and clearly help ensure cost-effective resource-allocation, introducing an element of flexibility into agreements might just be an effective way of tackling more demanding, niche business challenges.
What this demands is a more collaborative arrangement from the outset, as well as an emphasis on transparency in all agreements.
After all, in an over-commoditised industry where it is difficult to achieve cost reductions without compromising quality, added value is the often the key differentiator.
At a time where organisations are facing growing risks from all angles and there is a growing demand for the expertise and capabilities of niche sector experts, I believe now is an opportune time for FMs to consider a more collaborative approach with their service suppliers: one that empowers them to deliver added value and move beyond commodity service.
In practical terms, I believe this starts by taking a step back from the intricacies of agreements, focusing more on outcomes and working with specialist providers who are open to collaboration.
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