First Generation Outsourcing

First generation outsourcing

33% of facility activities is still undertaken in-houseⁱ, and organisations are looking for a trusted facilities partner to help them navigate through the complexities of a post-Covid, fit for the future workplace. This means many organisations are approaching CBRE GWS to advise them within the complexities of the ‘first generation outsourcers’.

This article provides a useful checklist of some key aspects which, in my view, should be considered by any manager seeking to deliver a successful outsource transition, especially in an environment where FM outsourcing was not previously practiced.

Consideration points

1) Agreeing a vision

The decision to outsource is usually made after analysis has demonstrated the project benefits from the change; after all, when executed responsibly, outsourcing can be one of the fastest means to unlocking an organisation’s hidden value. However, demonstrating success to the satisfaction of the CFO, and potentially to outside investors, demands rich, current and accurate data about the ‘before’ and ‘after’ economics and operations.

2) Data underpins success

When it comes to the property estate, it is common for the basic data to be partial or perhaps, worse. It’s not surprising that, in the same CBRE Occupier survey, 93% of respondents stated that there were challenges in resourcing internally to collect the necessary data required to effectively outsourceⁱⁱ. And yet finding such resource provides an immediate return. It means that any statements made by the CFO or others to justify the change are soundly based and rooted in evidence.

3) A solution tailored to your strategy

There has never been a one-size-fits-all answer to how an outsource arrangement should be structured. Different organisations will have a variety of expectations from the change and will apply their own unique blend of criteria – financial, commercial, service improvement, risk transfer, ESG support, workplace transformation and more. An early decision will be whether to outsource to a different provider for each service required or adopting an integrated facilities management (IFM) approach whereby all services are consolidated under a single contract to one service partner. Each approach has its own advantages depending on your needs and desired outcomes. A solution should respect your uniqueness and seamlessly integrate into your workplace priorities and culture.

4) Building an early partnership

As FM contracts tend to be long-term, there is a premium on close collaboration throughout the tendering and solutioning phase. An investment of time, transparency and openness during this process, allows both client and prospective service partner to develop an optimal solution keeping the strategic pillars at the forefront. Once a contract ‘goes live’, this partnership will allow the delivery teams to anticipate, respond and flex to meet the changing needs of the client business.

5) What stays behind?

As with any external supplier, there should be clarity around accountability and results at the interface between client and supplier, it is important to consider the design and scale of the retained organisation. The leanest retained teams are often found in conventional office space and those with building environments with heightened compliance and regulatory issues – such as manufacturing or life sciences – often opt for a mid-sized retained team of experts such as building engineers, even if this means accepting the expense of a degree of duplication.

6) Inspiring positive change

It is human nature to be nervous about change. The centrality of people engagement was reinforced in CBRE’s recent occupier survey. This highlighted that, for 87% of respondents, a “clear people strategy” is imperative when implementing an outsourcing programmeⁱⁱⁱ. A robust change and communication plan to support your transformation should be developed as early as possible to ensure positivity and success in your change.

i Frost and Sullivan, ‘Technology and Sustainability to drive recovery in the UK facility management market’, Dec 2020
ii EMEA Occupier Survey 2021
iii EMEA Occupier Survey 2022