Facility Management and Outsourcing

Facility Management and Outsourcing

Alexander Redlein & Michael Zobl

IFM, Vienna University of Technology, Austria

Abstract

Introduction and background

Outsourcing is a common practice for companies and an important element in business strategy. Also in the area of Facility Management (FM) the facility services/activities are contracted out to external service providers instead of carried out in-house. Organizations may expect to achieve different benefits such as cost savings through successful outsourcing. Although there are significant risks (e.g. poor performance/quality, less flexibility) that may be realized if outsourcing is not successful. The pros and cons of outsourcing have become a frequent topic in the literature. Therefore the Vienna University of Technology carried out research in the area of FM and Outsourcing. Every year a large sample of companies is interviewed and the data (answers) statistical analysed. The main goal is to identify the outsourced FM services and the (possible) advantages and disadvantages of this strategy.

Task description and methodology

The research is based on the Mixed Method Approach.The goal is to draw from the strengths and minimize the weaknesses of both research methods (quantitative and qualitative) in single research studies and across studies. Its logic of inquiry includes the use of induction (discovery of patterns), deduction (testing of theories and hypotheses) and abduction (uncovering and relying on the best of a set of explanations for understanding one’s results). The qualitative steps had the purpose to prepare the next quantitative steps. Based on the results of the qualitative steps, the questionnaire for the following quantitative steps has to be developed. The quantitative studies had the goal to validate the results of the qualitative steps done before. The qualitative studies (literature review, brainstorming, expert interviews and group discussions) were used primarily for the collection of the potential benefits and efficiency of FM. Based on the quantitative studies (facility management surveys since 2005) the results of the qualitative studies were analyzed and validated. Also the mixed model research was used. The qualitative and quantitative approaches are mixed within a research phase. The questionnaire used for the data collection included opened and closed questions. The population for the survey are the Top 500 companies published by Austrian journal “Trend”. Interviewees were the Facility Managers themselves or the persons responsible for the FM tasks. The standardized questionnaire analyses inter alia the areas FM organisation, Outsourcing and cost savings. Tools for the survey were phone and/or E-Mail. The data were entered in a MS Access database and afterwards exported into statistical programmes and analyzed and evaluated.

Conclusion

Even though FM does not equal outsourcing, outsourcing is an important method within FM. The most outsourced facility services are cleaning, winter service, heating/ventilation/air condition and outdoor area. Most of the companies had between 3 to 10 external service providers. But between the number of external service providers and the annual savings is only a (weak) moderate correlation. Also an increasing outsourcing percentage/outsourcing degree does not automatically lead to more cost savings, so savings are not a given.

Keywords:Outsourcing, cost savings, Facility Services, external service providers