A new research study commissioned by Interserve and undertaken by Sheffield Hallam University in conjunction with i-FM suggests that a cost-conscious, service-led approach to outsourcing facilities management is delivering value, but may be failing to achieve the levels of innovation required.
The FM Market Survey 2012, in which 585 service buyers and providers from across the UK were questioned, found that 70% of respondents pointed to financial savings as their reason for outsourcing facilities management services, while 61% indicated service level improvements. Sixty per-cent cited access to better technical expertise as a reason for outsourcing, with 57% acknowledging risk sharing as their motive. The study also revealed that more than 70% of organisations believe they achieved these objectives in each case.
In contrast, the survey shows that innovation in service delivery is only reaching its objectives in 56% of cases, with companies citing internal pressures such as financial barriers, resistance to change and a lack of board-level support, alongside issues such as a lack of supplier investment, as the main barriers to delivering innovation.
Executive Director at Interserve, Bruce Melizan, said:
“All business disciplines are under pressure to perform and facilities management in particular is often required to deliver ‘more for less’ in the post-recession economic climate. Over 85% of the respondents in this survey are experienced buyers that have been outsourcing for more than three years; and so it is encouraging to see that organisations are now reaping the benefits of improved cost and service efficiency through an outsourced facilities management model.
“However, there is also a clear expectation that facilities provision should now be delivering much more than cost savings alone; meaning that our industry must ensure it continues to adapt by providing a service that adds value to the client’s brand, business performance and reputation.”
The survey also revealed that:
• Performance pressure is here to stay. When asked to rank objectives in order of likely importance in five years’ time, respondents listed the top five as: value for money, reducing costs, service quality, flexibility of service delivery and added value/innovation.
• Clients and providers need to develop better partnerships. The top three success factors in these relationships are: trust, communication and service quality. Value for money is rated fourth.
• Asked about the current balance of responsibilities in their jobs, well over half of respondents said they spend less than 30% of their time on future strategy with most of their time and effort being devoted to day-to-day and reactive needs. Asked how they would like to spend their time, most are looking for a better balance – with 50:50 being the optimum ratio for the largest proportion.
• The standard three-year contract term is being questioned. Although a third of organisations still opt for this term, almost a quarter are now using five years or longer and slightly more do not apply a standard term for their contracts.