By Wayne Lim, Manager, C&W Services Singapore
Decision makers are overwhelmed with choice for commercial real estate (CRE) and facilities management (FM) outsourcing partners. In a market where every other sales pitch is lined with the necessary bells and whistles, how can you cut through the marketing fluff and select the right partner to win with you?
In this article, we discuss key topic areas and questions you should ask to get the most out of your business process outsourcing.
Getting More Value Out of Capex
For buyers embarking on their maiden CRE/FM outsourcing exercise, it can be a little daunting to venture into commercial and operating models that are unfamiliar to them. It is often tempting to roll out Request for Proposals (RFP) with prescriptive scopes of work and deliverables that mirror existing business operating processes of the in-house teams.
On the surface, prescriptive Requests for Proposals also have the added benefit of making tender evaluations more manageable due to apple to apple comparisons of bidders’ packages. However, this can turn quickly into a race to the bottom on fees, reducing the outsourcing exercise to a quest to find the service provider at the cheapest possible rate.
Mere bundling and shipping out-of-job tasks put the brakes on creating value through operation re-design and service innovations.
The conversation for seasoned buyers is often a lot more complex, from the starting point of setting strategic goals and an honest review of current challenges and business processes. Thus, it is ideal to have an open exchange, or what’s called “yellow pad sessions” with the service providers on site. The input from these sessions will then shape the eventual outcome-based RFP.
The buzz words of data analytics, Internet of Things, blockchain, etc. have made their way into Facility Management pitches. Be very discerning about claims to use data to make informed decisions.
Buyers need to be mindful that while there are genuine possibilities and potential in technology adoption, these innovations are often at varying stages of maturity in terms of reliability and cost benefit ratio.
It is important to drill down into proven case studies illustrating the success of applying technology, translating into tangible and measurable benefits in operational efficiencies, bottom lines and enhanced end user experiences.
Specific questions for service providers can include:
- What innovations will be implemented for this account and what are the expected benefits?
- Can you provide a list of data points that are proposed to be tracked and analyzed, and the associated decision trees that this information/intelligence will influence?
- What are the IT risks involved and mitigation strategies?
- What FM processes will be delivered with the proposed technology/innovation? How will these be delivered?
With the pace of today’s technological innovations, it is becoming increasingly important to have a more holistic, digital CRE/FM strategy and route map in place. As it is, there are a lot of off-the-rack products and solutions in almost all sub-service lines in the facility management domain. However, piece-meal adoption of bells and whistles will only marginally impact operations and profit lines.
It’s important to differentiate service providers who are ready to display their tech toys in the value add sections from the ones who have re-designed service delivery models.
In sizing up the capabilities of service providers, buyers often ask for track records of projects. This traditional by proxy approach may have been effective in sizing up abilities for business as usual operations. In the age of disruption, this has become increasingly less crucial with fresh challenges and needs surfacing at an unprecedented pace.
Ask for case studies and end user testimony on the service provider’s ability in dealing with greenfield items they have had no prior experience with. Have candid conversations on failed endeavors, damage recovery process and key takeaways.
Getting an understanding on how the service provider deals with issues they are unfamiliar with will provide more insights into their ability to adapt, innovate and grow with you.
Ask What’s Next
Have the service provider share their market projections, strategic pursuits and how they envision joint value creation beyond the specifics of the current scope or mandate. Focus the discussions on possibilities away from a lengthy showcase of past trophies.
Ask specifically for their technology and service innovation plans and how it will be mapped to your project account. Explore co-creation opportunities for new service options for your staff, guests and even customers.
If you would like to take this conversation to the next level, get in touch with us.