As a facilities leader, you understand better than anyone that choosing the right facilities provider or facilities management company for your organization is a high-stakes proposition. While budget pressures will push cost reduction high on your list of requirements, you know you don’t want lower pricing to come at the expense of quality, reliability, and staying competitive.
You’re also aware that the expectations for facilities management have never been higher or more complex. A series of rapid-fire crises, from the pandemic to more frequent and severe weather events, have tested every facility team’s ability to adjust and respond rapidly to emergencies in recent years. Not to mention all the other demands that are placed on the facilities management teams :
- Improving sustainability and energy performance
- Dealing with labor shortages, especially for skilled technicians
- Responding to changing customer and employee expectations
- Playing catch-up on technology capabilities
It’s no wonder that more organizations than ever are outsourcing facilities management functions. According to McKinsey, outsourcing services now make up more than half of the total facilities management market in North America, Europe, and the Middle East.
So how do you go about choosing a facilities management company? One that will help you achieve the right balance between costs and service while optimizing facility operations and meeting the demands above? Here are some of the most important elements to consider .
10 Key Factors to Consider When Selecting a Facilities Management Company
- Delivery model that delivers consistent service quality
- Industry experience
- A commercial model that aligns with your required outcomes while delivering cost effectiveness and demonstrated savings opportunities
- Local coverage
- Strong execution on core facilities management functions
- Innovative solutions leveraging technology enablement that deliver results aligned to critical requirements
- Engineering expertise and depth
- Energy management and sustainability commitment
- Disaster planning and emergency support
- Agility to respond to rapid change
1. Delivery Model That Delivers Consistent Service Quality
Facilities management companies tend to operate based on three main models. Choose the one that’s most effective for your organization:
- Fully outsourced: In this model, you contract with a third-party facilities company that manages all your services through multiple vendors. While this can provide strong rate negotiation, it lacks accountability and direct quality management, which can lead to repeat service calls and higher costs over the long term.
- Hybrid: This type of facilities company self-delivers some services with its own employees and manages other vendors for the rest. This results in similar challenges of accountability and quality, with technicians moving from one customer to the next.
- Integrated self-delivery: Also known as integrated facilities management companies, providers that follow this model use a holistic strategy where one provider fulfills all your facility needs from end to end, with the majority of services self-delivered. By focusing on total cost of ownership, integrated facilities management (IFM) can achieve cost reductions through efficiencies and technology innovations while delivering an enhanced customer experience.
2. Industry Experience
You want a partner who brings a solid track record managing facilities similar to yours. Many industries have special facility needs, such as refrigeration expertise in grocery and convenience stores, that require advanced skills in those areas. In addition, deep industry knowledge can help you stay competitive.
3. Cost Effectiveness and Demonstrated Savings Opportunities
Look for a commercial model that aligns with your required outcomes while delivering cost effectiveness and demonstrated savings opportunities. Ask for testimonials and case studies that detail how the facilities management company generated cost savings for other clients, for example through energy management and predictive maintenance technology enablement.
4. Local Coverage
To ensure faster and more consistent service quality, the provider should have strong technician coverage for your area. This helps keep response times to a minimum and minimizes critical asset downtime..
5. Strong Execution on Core Facilities Management Functions
The company should have solid strategies, structure, systems, and processes for delivering on the three main tasks of facilities management:
- Preventive maintenance to maximize uptime and extend equipment life
- Reactive maintenance with fast, effective service
- Optimizing asset management and capital planning
6. Technology Capabilities Innovative Solutions Leveraging Technology Enablement
To be effective in today’s environment, facilities teams need to utilize technology enablement effectively to deliver results aligned to critical requirements such as improved asset uptime and optimized operations. If you want to use your current facilities platforms, make sure the services company can integrate with your systems seamlessly. On the other hand, you may be looking for an FM partner that can bring more advanced technology to help you take advantage of capabilities and innovations without having to invest in upgrading internal IT systems and skills.
7. Engineering Expertise and Depth
Does the company have seasoned engineering leaders who can manage projects, from renovations and retrofits to new construction? Do they have a team of skilled technicians supported by clear processes, systems, and continuous training?
8. Commitment to Energy Management and Sustainability
With rising energy prices and focus on sustainability initiatives, a forward-looking FM partner can help you develop and execute on an effective energy management plan to control costs and lower your environmental impact for the future.
9. Disaster Planning and Emergency Support
As the risks of extreme weather events increase across the country, be sure that your FM company is ready and committed to provide essential disaster preparedness and storm recovery services. A dedicated partner will prepare and protect the safety of your people and facilities. Look for a company capable of preparing your facilities pre-storm and rapidly deploying recovery teams to execute repairs so you can get up and running quickly post-storm.
10. Agility to Respond to Rapid Change
Look for a partner who is flexible and able to adjust quickly to the changing needs of the market and your organization. Instead of the status quo, you want a company that will bring fresh ideas and evolve over time to meet the current and future requirements of your organization.
Striking the Right Balance
Facilities management is a complex and important role , representing 10 to 25 percent of total indirect spending for companies with asset-heavy distributed operations found in retailers, manufacturers, transportation, and logistics companies, according to the McKinsey report mentioned above. While there are clearly opportunities for cost reductions, it’s important to keep all your requirements in perspective.
As you weigh your options, consider this guidance from Andrew Atkinson, West Coast President of City US, who has been on both sides of the table in facilities management services negotiations.
“It’s really about finding a balance between strategy and costs,” said Atkinson, who managed facilities for a leading grocery retailer before joining City. “Lower costs in the short term may equate to cutting down on vital preventive maintenance needs. But with the right long-term strategy, your business can get better results and generate more cost efficiencies.”
With the right long-term strategy, your business can get better results and generate more cost efficiencies.Andrew Atkinson, West Coast President at City
The approach that City takes with integrated facilities management is to develop a plan customized to the client’s needs. The client agrees on a budget that provides cost certainty, plus City passes on achieved savings to the client.
“We take a long-term view that focuses on creating the right balance between cost, time, and results,” said Atkinson. “The result is a true partnership that fits the client’s needs not only for the present but for years to come.”