A challenge faced by many institutions and organizations is managing their facilities cost-effectively. In recent years and especially post-covid, outsourcing facility management has emerged as a viable solution to address these challenges. A conducive environment for living and work considers efficient facility management as essential. This blog post explores the benefits of outsourcing facility management and provides insights on achieving efficiency and operational savings through this strategic approach.
An article by Mackenzie[1] states that, “outsourcing has now surpassed 50 percent of the total facilities management market in several regions’’ Outsourcing facility management offers several advantages that can help overcome challenges and achieve operational excellence:
A. Cost Savings:
By outsourcing, fixed overheads can convert into variable costs. This means they only pay for the services they need, eliminating expenses related to employee benefits, training, and equipment maintenance. Outsourced facility management offers compelling cost savings, with studies indicating potential reductions of up to 30% in operational expenses. Embracing outsourcing can result increased flexibility, allowing for a variable cost model and strategic resource allocation. With this approach, companies can allocate funds where needed, resulting in improved financial efficiency and a streamlined focus on core business functions.
Moreover, outsourcing enables businesses to adopt a variable cost model, paying only for the services they need when they need them, providing flexibility and adaptability to changing business requirements. Overall, the cost savings associated with outsourced facility management contribute to improved financial efficiency and better focus on core business functions.
B. Access to Specialized Expertise:
Facility management service providers possess specialized skills and industry knowledge; possessing the expertise needed to maintain and optimize various facilities effectively. Organizations and institutions can assign specialized facility management tasks to external experts, and benefit on the efficiency and expertise of dedicated professionals without bearing the burden of in-house operational costs.
This specialization often translates to higher efficiency and cost-effectiveness as the teams can streamline processes and troubleshoot issues with a deeper understanding of the facility. In addition, outsourcing specialized services enables companies to stay abreast of the latest industry trends and technologies without having to invest heavily in training and infrastructure. The access to specialized services in outsourced facility management is a strategic move that can lead to improved operational performance and long-term sustainability.
C. Enhanced Focus on Core Competencies:
Outsourcing facility management allows institutions to focus on their primary mission of delivering quality service without being diverted by non-core tasks. This frees up internal resources, allowing the core business to focus on its strategic initiatives and innovation, fostering growth and competitiveness.
Furthermore, it enables businesses to access the latest technologies and best practices in facility management without the burden of managing these aspects in-house. In essence, prioritizing core services in outsourced facility management empowers organizations to optimize their operations, enhance service quality, and ultimately achieve a more focused and resilient business model.
D. Improved Service Quality:
Professional facility management service providers follow industry best practices, adhere to regulatory standards, and employ quality assurance measures to ensure excellent service delivery. Studies have shown that most organizations that outsourced facility services reported an improvement in service quality.
Improved service quality in outsourced facility management can bring about a multitude of benefits. It enhances operational efficiency by ensuring that facilities run smoothly, reducing downtime and enhancing overall productivity. In turn, this leads to cost savings as efficient operations often translate into lower maintenance and repair expenses. Additionally, a higher service quality contributes to a positive and conducive work environment, boosting employee satisfaction and productivity. In addition, it often results in better risk management, as outsourced providers are specialized in addressing potential issues before there’s an escalation. Ultimately, the benefits of improved service quality extend beyond operational aspects, positively impacting the overall functioning and success of the organization.
E. Advanced Technology and Innovation:
Advanced technology and innovation have revolutionized outsourced facility management, bringing forth a plethora of benefits. Facility management service providers often leverage cutting-edge technologies and innovative solutions to improve efficiency and optimize resources. The integration of smart sensors, IoT devices, and data analytics allows for real-time monitoring and predictive maintenance, optimizing operational efficiency. Automated systems enhance task management, optimizing energy consumption, reducing human errors, reduce environmental impact and improving overall productivity. Innovations like AI-driven analytics provide valuable insights into facility performance, enabling data-driven decision-making for strategic planning and resource allocation.
An Industry Today[2] article cited a survey which showed the use of technology to achieve predictive maintenance improved 60 percent of participants’ uptime by about 9 percent and reduced costs for approximately 45 percent of the participants by close to 12 percent with some respondents stating that extension of the life of aging equipment was made possible by an average of 20 percent due to fewer equipment breakdowns and as-needed maintenance.
In conclusion, outsourcing facility management emerges as a strategic choice empowered by a myriad of advantages. By entrusting specialized service providers, organizations can tap into advanced technologies and innovative solutions that optimize operational processes. This not only enhances efficiency and productivity but also introduces a level of adaptability crucial in today’s dynamic business landscape. Moreover, outsourcing allows businesses to concentrate on their core competencies, fostering growth and agility. The cost-effectiveness, scalability, and access to specialized expertise make outsourcing facility management a compelling strategy for organizations aiming to stay competitive and responsive in an ever-evolving market.
[1] https://www.mckinsey.com/capabilities/operations/our-insights/six-emerging-trends-in-facilities-management-sourcing#/
[2] https://industrytoday.com/extend-manufacturing-equipment-life-with-iot-and-pdm/
