Much commentary supported by case studies exists for ‘Outsourcing’ within the FM Market, but I would challenge that the subject of outsourcing is so wide and varied, classifying it under one title does a disservice to the options available. Outsourcing is a journey that the FM industry as a whole is taking, not only in the Middle East but also internationally: this journey includes both clients and service providers.
Often conversations start with the benefits of different contracting models and need for outsourcing in general. All organisations that require or provide Integrated Facilities Management require a level of outsourcing; if nothing else but to provide specialist systems support or to comply with the local legal and licencing obligations. This journey starts with the customer, the first stage of this journey is ‘Tactical Outsourcing’, traditionally known as an insourced model but even when a large percentage of services are delivered in house the need for specialist service contracts still exists. The traditional route takes us through ‘Labour Outsourcing’ where all management is retained in the client’s organisations and labour suppliers are used to fulfil the requirements largely on an input-based contract. The next step would be ‘Single Service Outsourcing’
whereby clients have specific requirements and outsource each service line to varied suppliers with contracts starting to become more output based. Then there is ‘Service Outsourcing’ whereby the FM provision is outsourced by the client to a single organisation, largely driven by outputbased requirements.
However, the next tier in the provision of FM Services is often overlooked, being the first tier contractor. Are they a managing agent type organisation that they themselves outsource the service via one of the models above, or are they an Integrated Facilities Management Company that offers all but the most specialist of services in-house? Or do they operate a hybrid business model whereby some services are inhouse while others are subcontracted out, so this continues throughout the supply chain?
The choice of these models by the customer on the level of outsourcing is further compounded by their selection of service provider and the type of model deployed. For each organisation’s needs, sector, goals and strategic intent, the various business models have differing suitability. The evidence is such that increased levels of outsourcing can drive cost benefits to a business while providing strategic advantage, allowing businesses to focus on their core business. The benefits of not being distracted by their contextual needs for FM services are clear.
As an outsourcing market, the various regions in the Middle East are at differing stages of development, with some organisations taking initial tentative steps on the outsourcing journey while others are striding forward with great ambition. Having said this, the fact remains that outsourcing levels within the FM sector will increase into the future leading to a growing market and requirement for competent service providers.
The future remains one of exciting possibilities. As a provider of Integrated Facilities Management Services, Emrill works with a range of customers delivering ‘Single Service Outsourced’ contracts through to ‘Service Outsourcing’, and many hybrids in between. To truly drive an integrated approach to delivery, Emrill endeavours to“insource” as many services as possible in order to deliver a cohesive, quality service to the end user, while ensuring that the Emrill Centre’s of Excellence delivers stafftraining and subject matter expertise in each of the services offered. But suffice it to say, Emrills’ journey does not stop there.
To achieve full scale outsourcing, I firmly believe that formal partnerships are required. For example, two organisations working as one for a common set of goals, where KPI’s are lean and focused on what really matters, and always centred on the strategic objectives of the client. To achieve and maintain these types of partnerships, maturity and trust from both parties involved is required. ‘Partnership Outsourcing’ is a set of behaviours more so than a written agreement, benefiting all parties and with objectives clearly aligned on the end game of the delighting the customer and end-users.
The seeds of such partnerships have definitely been sown in the Middle East region but all industry stakeholders must focus on the advancement of these models and partnership options to fully unlock the full benefits possible from the outsourcing journey.
(The author, Alex Davies is the Managing Director of Emrill Services LLC)