Outsourcing - Background

A recent analysis completed by the International Facility Management Association concluded that outsourcing has experienced a 17.8% annual growth rate, and will continue to grow in excess of 20% through the year 2000. The senior executives of major corporations are taking a more global perspective and pursuing outsourcing as a valuable business strategy. the corporate view of outsourcing is that it is not a fad or experiment - it seems now to be a standard way of doing business. Corporations worldwide have recognized the value equation of outsourcing as compared to previously reviewing limited short term cost analysis.

Many managers outsource non-technical services (i.e. janitorial, security, landscaping etc..), however, historically have attempted to accomplish the more sophisticated technical service requirements with internal resources. These internal resources are typically limited and are often supplemented by outside contractors. The firms that have chosen to outsource simply consolidated the responsibility and accountability of these services. These owner / managers are now able to focus on management responsibilities of achieving the desired performance standards for their property.

The keys to a successful outsourcing relationship are to identify a service provider with the resources and expertise to meet the specific requirement of your own organization. The service provider must be managed as a partner in the process of meeting your corporate objectives. The past practices of "bidding " vendors to a limited and ambiguous specification had yielded a low cost, ineffective approach to operating properties. Additionally, these practices inherently separated the accountability and responsibility of the performance standards for the property. Corporations are looking to reduce the number of sub-contractors and vendors, and replace them with "qualified partnering companies" that are capable of meeting the log term operational and financial objectives of the property.

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