A decade and a half into the millennium our dependency on computers and technology continues to intensify and yet we are increasingly a world at war and addicted to fossil fuels. Our citizens are deeply concerned about corruption and whether the economic system, that has been with us since the industrial revolution, is still relevant. All you have to do is look to recent mistrust in our banking systems and movements such as Occupy Wall Street, Wiki leaks and the ‘Anonymous’ cyber hacking group.
The world of business is increasingly characterised by a vulnerable present with an uncertain future and we need to accept that this is a permanent condition. Companies increasingly do not possess all the skills or knowledge required inside our organisations to achieve all of their strategic objectives.
With more things to consider, additional workload, complexity, profound confusion and uncertainty in our lives, the more we realise that we cannot go it alone or keep doing what we have been doing and expect different results the better. After all, that according to Einstein, is the definition of insanity.
There will, therefore, continue to be a greater demand for help, advice and innovation from outside our organisations and in order to make full advantage this, organisations will need to develop a greater capacity for deeper relatedness and authentic partnerships with specialists that can help them achieve their strategic objectives.
This permanent vulnerability to change and uncertainty, demand a level of relatedness that is based on listening, authenticity, understanding and acceptance by enterprises that they do not have the requisite set of skills or knowledge inside their organisations.
This will make the all-too-familiar, master and slave behaviours that are so often involved in procurement lead, supplier relationships, increasingly obsolete. This command and control behaviour is born out of a lack of understanding of how to procure and manage service-based operations. To counteract this we need a realisation that a co-creation and co-collaboration mindset between the client and the outsourced entity is a necessity in order to meet these new challenges.
Companies that understand this new reality are rare but we’re going to need to develop our capacity for a deeper relatedness and true partnership with players outside our organisations if we are to progress. BS 11000 -Collaborative Business Relationships is already recognising this by providing a framework around how suppliers and clients can collaborate to find better answers to increasing more complex problems.
The world is getting smaller and Globalization is becoming more proliferate and as a result outsourced services will either become more commoditized or more highly differentiated.
According to many customer surveys, the primary reason for outsourcing is centred around cost savings, thus applying commoditising pressure upon the existing service providers. Perhaps counter-intuitively there is plenty of evidence from surveys conducted in the USA, Europe and Australia that suggest outsourcing is also used as a strategy to achieve
• Access to specialist skills
• Optimisation and Variablisation of fixed costs
• Process improvement
• Service differentiation
• Competitive Advantage
• Focus on Core Business
• Function out of control
• Liberation of resources
• Risk Mitigation
The FM outsourcing industry understands the need to reduce costs particularly in non-core services, after all, why would you want to pay more for those services? However in order for price competitive tendering to be effective it requires that the client has a degree of knowledge of FM to be able to list and define the assets, the maintenance philosophy, specification and service methodology in the tender documents in order to allow the tenderers to be able to submit prices.
It is unlikely that these skills exist within most client organisations, and so a more mature and collaborative approach that has a far more transformational approach rather than a transactional one, will provide maximum benefit, to the Client and its stakeholders and it is this approach that would fully enable the Client to achieve their strategic objectives.
I will elaborate more on this approach in future blog posts.
What has been your experience in the outsourcing of non-core services?