Cadaema Consulting Services explore what makes outsourced FM service contracts a success
In the past, it’s been easier to define this – delivering tangible cost reduction through more efficient and effective working methods and volume delivery. However, as the market matures, opportunities for this reduce, so the objective for outsourcing needs much more careful consideration and articulation within business cases and decision points about whether to outsource or maintain this delivery model.
Paradoxically, however, as FM contracts go through multiple generations, often the profile of the procurement and contract management becomes less critical and strategic oversight around this decision point reduces.
This can leave contracts and management stakeholders in a difficult spot. Clients are looking for high performing contract delivery with a reduced cost, and suppliers are looking for margins that protect their business. Further, given the reducing levels of strategic input to contract management, there can be a lowering of organisational empathy between the parties.
The sector needs to think of these arrangements in a different way. Gone are the days of ‘success’ being defined by cost savings – there really isn’t much more of this to realise.
What must define success is a thorough thought process that clearly understands why the services have been outsourced in the first place, and that this be clearly articulated to client and supplier teams alike. Processes then need putting in place to track how effectively the contract can achieve these objectives.
Regrettably, there is a growing gap between the impact FM services can have on an organisation’s ability to operate and the strategic input to contract and, dare I say it, partnership management which prevents this from being regularly delivered.
For FM contracts to be successful in the future, this conundrum needs solving.
