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Bundled services – the pros and cons

Bundled services – having security as one of many facilities management services, in a ‘bundle’ rather than a contract in its own right. Good or bad? Mark Rowe writes of the latest SRI research.

A smarter way of working, or a sign of the times – that costs count more than quality of service? Bundling was the subject for the most recent Security Research Initiative, by Perpetuity Research, led by Prof Martin Gill, pictured. You can download the 110-page report free, at the Perpetuity website. The full report went over the pros and cons of outsourcing, the different types of bundling services, what clients have to say, and the suppliers. Here we bring you some of one of the topics – what are the influences on the procurement decision.

First: why does a customer outsource security, rather than keep it in-house? A security contractor gives flexibility, and is expert at security; or, the customer prefers to keep control of security, rather than sub-contract. And why bundling rather than separate, contracted services? Bundling can offer efficiencies, and cost savings (although the researchers heard some give the view that the savings are an illusion, as everything’s chargeable in a bundle). In brief, clients have choices, ‘but much depends on the skills of those involve and the extent to which arrangements in place are supported by a well-thought through strategy’, as the SRI report puts it.

Why then does anyone decide to outsource, or not? Or to bundle, or not? The SRI saw six factors at work:

tradition;
a central policy;
influence of procurement;
the status and importance of security;
the status of the security lead; and
the role of the security function.

By tradition, the SRI points to something as simple as ‘that is the way things are done’. Some public bodies might resist using the private sector. A business might vary, depending on what’s under the same roof: a sports stadium might have shops and restaurants, calling for different arrangements. Who says whether to bundle? Not necessarily procurement people; the decision might be left to local managers, or divisions. Or the board might set whatever procurement strategy. And if some in the business fear that buying through one FM company might mean the security service isn’t as good as from a specialist, the customer might be careful to specify in the tender document and set clear service level agreements – because paying for a service you don’t want is a problem, the same as getting a poor service. As one FM manager put it, ‘if I let them downgrade security it is me who has not managed security’.

As the SRI report said, some in security and FM in general might feel that procurement focus on price, at the expense of quality. That said, as the SRI research went on to explore, there is a point to procurement. In a word, an expert is evaluating cost and value, because corporate money is being spent. Both sides, client and supplier, have to ask the right questions at the procurement stage, else things can go wrong later.

The researchers went on to what we could call the human factor – the head of security (though as the report pointed out, the client might not have one). SRI has looked at procurement in security last year, and heard how security people see procurement people in their organisation (and others) as more important. An in-house security specialist is able to put across the case for a specialist contractor, the SRI suggests. Last but not least, there’s what role security plays in the organisation. Is it deemed crucial – as crucial as power or properly filtered water? As a security adviser for a property management company put it: “If a waste paper bin doesn’t get emptied it can wait but if a security guard doesn’t turn up or an alarm isn’t responded to then it is more of a problem.” That might seem ammunition for the security specialists. However, there’s always another point of view; someone described to the SRI all services as ‘a spoke in the wheel’. And different workplaces rank them differently. A guard not on duty might not rank as highly as a data centre failing. Significantly, some pointed out to the SRI that clients might not think about being insecure or unsafe – but would soon know about (and complain) if the canteen was shut, the toilets were dirty or the lights weren’t working. The SRI found some places that regarded security as not at all important, and indeed a hindrance to doing business. That said, some workplaces see the point of security, for reasons as varied as guarding intellectual property to being seen to protect passengers.

The SRI researchers did find that clients might want a supplier to ‘relate and align itself with the business of the client’, which might in practice mean contract staff wearing client, not supplier, logos on their uniforms. As that example suggests, while costs undeniably matter – and clients often change supplier for that reason – other, intangible things matter, too, as the SRI found. Clients say that they stay with the same supplier because they are satisfied, perhaps because client and supplier enjoy a feeling of partnership. To sum up, SRI found buyers did not agree on what was the best way of supplying services. “There were those who hailed TFM [total facilities management] as the way of the future, and those who felt it was the past having been proven not to work.”

About the research
Based on telephone and face-to-face interviews with 44 clients and 28 suppliers of security services from a range of countries. The interviews were carried out in the first quarter of 2013. This was supplemented by an online survey of 145 clients and suppliers.

The research was by Prof Martin Gill, Charlotte Howell and Tom Horton of Perpetuity Research (which started life as a spin out from the University of Leicester) under the umbrella of the Security Research Initiative (http://www.perpetuityresearch.com/sri.html), which does a study each year into an aspect of security.

To download a free copy of the full report – go to www.perpetuityresearch.com/main.php or email prci@perpetuityresearch.com for more details. You can also ring Leicester-based Perpetuity on 0116 222 5553.


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