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Strategies: Approaching the Outsourcing Decision

By Net Assets posted 15 days ago

  
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Cost alone should not drive decisions to keep services in-house or not — consider a more complete value proposition.

Article by Theodore J. Weidner, Purdue University

From the May/June 2020 Net Assets magazine

So, your school is considering outsourcing some or all of its facilities services. How do you decide if it’s the right choice? If the compelling reason is cost, you’ll likely be disappointed because companies’ cost structure is likely not much different from your school’s costs if the service is up to snuff. In my experience, outsourcing is most successful when companies can provide better management of custodial operations, meaning they measure and track performance, and retrain and discipline employees in accordance with clear metrics and policies.

A tool that can help schools think about these decisions is the Facility Management Standards developed by the International Standards Organization and last updated in 2018. These guidelines help organizations consider the value proposition of any facilities service, be it in-house or contracted. Here are some highlights from the standards.

It is often assumed that whoever is managing the services can identify, define and communicate metrics to measure and validate the services delivered, but it is a complex task

1. Articulate goals

It’s important to remember that facilities exist to serve the programs that take place inside them. First focus on what a facility fundamentally needs to accomplish and the compelling reasons for the services. Is it quality education for students? Providing a learning-conducive environment, with appropriate temperatures, humidity, fresh air and lighting? Healthy conditions with clean contact surfaces, such as door hardware and light switches, and sanitary restrooms? How can each of these be goals quantified? Tracking how well these goals are met provides valuable information.

It is often assumed that whoever is managing the services can identify, define and communicate metrics to measure and validate the services delivered, but it is a complex task. The manager must be able to articulate expectations and outcomes to both administrators and service employees. Here additional standards can help — APPA: Leadership in Educational Facilities has developed a five-level scale for facility services that can clarify standards and steer productive conversations about performance.

2. Articulate requirements

School leaders should also determine what is required of facilities service employees (e.g., background checks, attendance, compliance with substance abuse policy, etc.). Facility employees working among children must be sensitive to faculty, parental and societal concerns.

3. Consider compliance and performance evaluation

Next consider who will oversee the contract if you decide to outsource or who will oversee compliance if services are kept in-house. This person should be experienced in managing operational contracts, and it may be their full-time job. The manager must have a system to check compliance periodically, through inspections or other means, and then meet with the service provider to review compliance and performance.

4. Consider employee policies

What training is needed to ensure the service provider meets regulatory mandates and other needs? Is the training done as part of the service or an extra cost? Are employees identifiable by a common uniform? Do they need to have an ID? What security is associated with wearing a uniform or holding an ID? How are these items retrieved when the employee separates from the employer?

5. Consider auxiliary demands

Every educational facility has uses beyond education, such as meetings, extracurricular activities, special events, performances, athletic events and so on. What additional services are needed for auxiliary programming? How will they be handled? Will they be an extra cost or included in normal services?

Whether an organization decides to outsource facility services or keep services in-house, these and other questions must be answered. Additional information may be found in the ISO and APPA standards mentioned above. It’s important to note that none of these points focus solely on cost. Multiple factors contribute to value proposition, which, when stated correctly, will address many concerns including cost. Recognizing what delivers value to the school helps determine the service expectations. Focusing on the value returned through the service provider demonstrates the effectiveness and importance of facilities without ignoring the fundamental mission of the school. 

Theodore J. Weidner, Ph.D., PE, RA, DBIA, is associate professor, construction engineering and management, at Purdue University.

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To share a strategy that makes your business office more effective or efficient, email netassets@nboa.org. In the subject line, type STRATEGIES.
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