Navigating the Hurdles of Outsourcing

12/14/2023

The myriad staffing challenges that maintenance and engineering managers have faced for years are just one reason that outsourcing remains a viable option in many facilities. Beyond that issue, managers also must contend with tight budgets and advancing technology that puts pressure on in-house staffs to make sure their skills keep pace. 

The process of outsourcing — determining whether and how to turn over maintenance and engineering duties — to an outside provider itself is fraught with potential problems. To ensure a successful result for the department and the organization, managers need to be aware of several key considerations along the way. 

Identifying opportunities 

The first step in the outsourcing process often is determining which duties a department should consider outsourcing. But managers also might consider just how broad the scope of the process should be. In some cases, outtasking — turning over a specific maintenance task — might be more beneficial. 

“We delineate between outtasking, which are tactical elements of facilities operations broken down into their areas, compared to outsourcing, which is a little bit more holistic in its approach, a little bit more all-encompassing,” says Ben Bailey, executive leader with JLL’s insurance business segment. “When I think about outtasking, it's the first step in the evolution. It allows an organization to release some control but still provide supervision and oversight and create more flexibility. These can be things like janitorial, landscaping, engineering functions, preventive maintenance, and even concierge services.” 

In contrast, outsourcing often is broader and, as a result, can give managers more time for other responsibilities. 

“When (managers) have more complete, holistic outsourcing, it allows them to streamline their focus on planning for the future,” Bailey says, such as the types of policies they want to put in place to support the facility and the workforce and the performance management measures and financial management measures they need to put on top of the service providers. 

Whether the decision is to outtask or outsource, managers need to understand the capabilities of in-house staff before making a decision. 

“You've got to look at your in-house capabilities and the availability of staff with the expertise to do that work,” says Michael Heroux, an energy engineer with FST Technical Services. “Then you're going to look at your process. Can you justify the additional staff? You’ve got to look at the pros and cons of each area that you're looking at outsourcing.” 

Managers also need to take a close look at what the decision to outsource might mean for their workload. 

“Managers think, ‘If I outsource that, I don't have to manage it,’ Heroux says. “The problem is you do still have to manage it because you’ve got to make sure the contractor shows up on time with the clearances and all the tools he needs. 

"You think that you're taking that management and putting it on that company that you hired to take care of that problem. In a lot of cases, we find that (service providers) haven't taken care of the problem. It occurs all the time. In a lot of cases, the companies — especially small companies — don't do commissioning after the fact, so they don't know exactly what they got. They think they got what the designer laid out. But contractors — I hate to say it — play the game of running it through the warranty, and when the warranty is done, that's it. They walk away.” 

Avoiding mistakes 

Because the outsourcing process has so many moving parts and interested parties, managers can easily stumble at some point. To avoid mistakes, Bailey advises managers to explore their goals. 

“The first thing that is critical and can be a mistake when people miss it is making sure you start out with your strategic drivers,” Bailey says. “What are you trying to accomplish with outsourcing? That is going to set the structure for the entire effort.” 

Another big-picture mistake is to be too cautious. 

“Mistake two is not going far enough and not taking full advantage of all that is out there from a service provider perspective,” Bailey says. “What happens sometimes is that, especially in a first-generation outsourcing where they haven’t outsourced before and where they have a large internal team, they tend to keep that internal team, and that team will remain tactically focused.”  

The differing visions of the in-house management and service provider can also cause problems. 

“Now you have two individuals doing the same job,” Bailey says. “That creates a lot of additional work and a lot of unnecessary waste.” 

Managers also must pay attention to the people actually doing the work. In the case of contract technicians, Heroux advises managers to assess the skills for the contracted work. 

“Our technicians out in the field are not getting the training they need,” he says. “A lot of technicians are brought into the field and the industry, and they can install, but they can't troubleshoot. There’s a big difference. A lot of the mistakes are related to troubleshooting the unit. They're trying to make the fix, but it's costing you a lot of money.” 

 Bailey advises managers contemplating outsourcing to ensure in-house staff understand the process and its goals. 

“Anytime you're making a change like this to an organization, you've got to make sure you're investing in getting the team members bought into where the organization is going and what their responsibility will be,” he says. “What (technicians) need to be doing is reorienting their focus all together on things that are more important. That investment in change management actually sets up the team for success.” 

Selecting a partner 

Perhaps the most challenging outsourcing decision a manager faces is selecting the service provider, who has to demonstrate high-level skills related to reliability, cost-effectiveness and communication. 

“You want to look for providers to be in partnership with,” Heroux says. “You want to be comfortable because they might end up interfacing with your internal or external customers. You want to make sure that you've got a provider that can deal with that and has communication skills. You want to research the provider to make sure they don’t have any court actions or litigation.” 

Managers also need to be certain that a provider has a proven track record of performance in similar facilities. 

“Anytime you get into one of these outsourcing partnerships, you are trusting that provider with your career to make no mistake,” Bailey says. “Immediately, your successes become bound up with each other. It's an investment on both sides of the table. 

“It's more than just a financial investment. You are investing a lot of your reputational capital, so you want to work with an organization that has a proven track record with similar companies, similar facilities and has shown that they can deliver.” 

Learning about the provider also should include checking references. 

"You don't want to go in with someone who's not well reputed or new to the game,” Bailey says. “You also want that provider to have a vast provider network that they can tap into. You want to make sure that they're bringing the best quality and the best the industry has to offer in each one of those categories to deliver on your day-to-day requirements.” 

Often overlooked in the process of screening potential outsourcing partners is understanding their ability to operate in the digital era. 

“Make sure that they can interface with your computerized maintenance management system,” Heroux says. “If they can do that, you're getting all that data on each piece of equipment they service. You have records to know what's been done and what hasn't been done. You have a record of how much you've paid and how much labor you’ve put into that piece of equipment.” 

Given the complexity of the outsourcing process and everything that leads up to it, it would be easy for managers to compromise and take the traditional — and easy — approach. Bailey reminds managers that one potential benefit of outsourcing is that it can bring a fresh perspective to facilities management. 

“One thing to be thoughtful about is challenging the status quo,” Bailey says. “If an organization is either largely self-performing or has worked with the same provider for a number of years, it's very easy to just continue on that with that kind of that inertia in terms of where and how that support has been provided, how it has been delivered. 

“It's important to consider adding a service provider that's willing to challenge you and ensure that you're not being stagnant in your thinking. That becomes a win-win situation where we're able were all able to work toward the overall strategic objective for the organization.” 

Dan Hounsell is senior editor for the facilities market. He has more than 30 years of experience writing about facilities maintenance, engineering and management.