Downturns can be healthy
June 1st 2008

Switch on the television or pick up a newspaper – it's impossible not to notice the financial concerns facing the United Kingdom.The nation's in an economic downturn but, says MITIE cleaning business sales & marketing director,David Noel, this isn't necessarily bad news for everyone

Both the public and private sectors are now looking at their costs in even greater detail than before, with an eye to preserving vital cash flow. Outsourcing was born in a downturn and for the best part of three decades has been a recognised way of reducing costs and bringing a number of additional benefits to the organisations involved.These include the ability to concentrate on their own core activities, the application of innovative techniques, cutting edge technology and focused management; these all allow a focus to be given to the outsourced activity that would not have been there within an organisation whose primary objective is not concerned with delivering those services.

There has been a dramatic shift over the past thirty years in businesses choosing to outsource their services,with the cleaning industry being at the forefront of this movement.However,when times are good, organisations have less motivation to change, to save costs and go through the process of transferring their staff to a specialist provider.The economic climate is forcing companies to reevaluate their cost base and find new ways of reducing costs.This provides opportunity for FM companies as one way that organisations can save money through outsourcing is to increase the scope of the contracts that they put out to tender.The move towards larger multi-service and national FM contracts reduces costs for organisations on several fronts.With fewer suppliers to monitor, you have fewer invoices to process, fewer quality and health and safety systems to evaluate, reducing the costs of monitoring your suppliers.

The removal of the layers of management that occurs where a multitude of services are found together can also reduce the overall FM spend.Why have five people when you can have one experienced person taking control? Service delivery on a client's site can also improve when combining service lines.Teams provided by the same supplier can work more efficiently together, cross training on simple tasks and enhancing the communication between service teams.On larger contracts, the quality of the management will also improve, bringing new impetus for an improvement in service.

Ultimately, the best result for organisations can be the full outsourcing of the FM function, not simply the multi-service contracts monitored by an in-house FM team.Companies then need a smooth transition from the in-house FM team to a competent FM organisation.

The issue here moves away from merely cutting costs, although cost will always be high on the agenda.Here we are discussing embedding an outsourcing supplier into the strategic planning of an organisation's assets i.e. its buildings and its people.

It should always be born in mind whether the supplier has a proven record in a number of areas.Are they experts in health and safety or energy management? Do they carry out carbon footprint assessment and impact management? Space planning and development is important as well as people welfare issues – these are all critical issues and should be looked at in detail; do they offer this? The chosen FM supplier must clearly demonstrate what they can bring to the table.They have to fit into the way a client operates as well as reflect their goals for the short, medium and the longer term.This will surely deliver best value for clients' scarce cash.This is surely at the heart of the decision made by companies exploring this option. How 'best value' is defined is the key to that decision making process.

More articles from MITIE Cleaning & Environmental Services Ltd: