In our November 2013 print issue we featured the Security Research Initiative latest report on the pros and cons of outsourcing or keeping security in-house. An FM (facilities management) market survey commissioned by the FM company Interserve and undertaken by Sheffield Hallam University with i-FM, has has pointed to a shift from a pure cost and service level focus to a stronger emphasis on successful buyer-partner relationships, according to the researchers.
Security is the third most likely service to be outsourced, slightly behind cleaning and maintenance-engineering, but more likely outsourced than catering, and with telecoms, office services and estate management and health and safety much less likely to be outsourced. Why outsource? Financial savings (quoted in 72pc of cases), better technical expertise (64pc), and transfer of risk (59pc) are top three objectives for outsourcing. Likewise, cost is the most important factor in a tender evaluation; after that comes innovation and local supply chain.
http://www.interserve.com/resources/downloads/media/general/Time-for-change-research_october-2013.pdf
As for the future of security where it’s outsourced under contract,
17 per cent of users said that they were staying with their supplier;
25pc said they would re-tender the same;
36pc would re-tender and re-scope;
9pc would bring in-house; and
13pc did not say.
Some 90pc of respondents are requesting new ideas to be offered by their suppliers during the preparation and management of outsourced contracts.
At the same time, there is a discrepancy between what buyers want in terms of contract innovation and how this is being measured. 68pc of those engaged in innovation link it to their strategic objectives and 86pc rank it as important (the second highest ranking) when evaluating tenders or bids, but only 24pc actually list it as a requirement in their contracts.
The study, now in its third year, surveyed 227 private and public sector buyers and providers from across the UK and found that the objectives for outsourcing remain similar to 2012, with financial savings (72pc), access to better technical expertise (64pc), transfer of risk (59pc), access to best practice (56.5pc) and reduction of in-house staff (56pc) all scoring highly.
However, while results from 2012 show that reducing costs was more important than quality, this year’s report predicts that value for money will come from a greater emphasis on innovation, service quality and customer satisfaction. The report also rates longer-term contracts (more than three years) as more preferable in the majority (91pc) of cases in helping organisations achieve their objectives.
Communication (76pc) and working together as a team (76pc) were ranked as the top areas for joint buyer and supplier improvement.
Commenting on the findings
Bruce Melizan, Executive Director at Interserve said: “Previous surveys concluded that the industry has been focused on taking out cost, but this year there has been a subtle shift towards finding ways of delivering services differently. Although some customers are still unwilling to rank issues like innovation at the top of their priority list when outsourcing, it is increasingly seen as a vital part of service delivery.
“The other significant trend in this year’s research is the value placed on building longer term contracts. In 91pc of cases these are seen to provide more benefits than shorter term contracts in building relationships.
“At Interserve, we believe the right approach is about structuring a partnership based on the client’s strategic outcomes rather than focusing on the quicker and easier cost-cutting measures.
“Overall the industry needs to work closer with its clients to develop beneficial relationships that deliver added value, enable the right improvements to be made and contribute to the long-term success of the client’s business.”
The survey also suggested that:
16pc increase in those outsourcing over 76pc of their estate since 2012. In-house and single service are the most popular form of delivery but 14pc more organisations now outsource to one provider.
Long-term contracts are most effective at building relationships (91pc) with short term contracts considered most effective in only one instance – enabling organisations to exit contracts.
Cleaning, maintenance and security services are outsourced in nearly 70pc of cases.
94pc of people believe cost is most important factor in tender evaluation, whilst 52pc think organisations will improve productivity and efficiency of services to a greater extent in the future.
Over the next five years, demand for total facilities management and integrated services is expected to increase, with single service delivery decreasing and bundled services remaining at the same level.
There continues to be mixed attitudes towards sustainability. There is a strong indication that it will become more important in the next five years, although much like innovation, it is rated as low relevance in terms of outsourcing objectives.
The key findings from this research are available in a report called ‘Time for change in facilities management’ which can be downloaded at www.interserve.com or at www.i-fm.net.
