Smart Outsourcing: Strategies for Effective Facilities Outsourcing

Companies have outsourced business functions with the hope of reducing headcount and associated costs. The outsource providers were assumed to have lower wage rates, better processes, and other efficiencies. Over time, the logic morphed into the more you outsource together (bundle), the better value you get from suppliers.

Have you wondered if outsourcing delivered cost reduction and service improvements?

Cost reduction, which is perceived to be the primary benefit from outsourcing, has not been realized. Our team recently interviewed 40 large companies across different industries that have outsourced facilities management. They found that 80% of the firms continue to emphasize the need for cost reduction.

Many of the fundamental assumptions behind the outsourcing deals were wrong. The increase in scale did not reduce costs and processes that worked for one company did not work for others.

This book provides information about evolving nature of the Facilities Outsourcing industry and how sourcing organization can help companies make smart choices. To reduce cost and improve service, it may make sense to bring some of the work back in-house, use technology to manage suppliers instead of using an outside provider for oversight, and create value by collaborating with other companies, where possible.