1. Reduce or control maintenance costs
In today's competitive global environment, companies must constantly strive to reduce cost.
For non-core activities, such as facilities maintenance, outsourcing can prove cost effective
and provide a competitive advantage. Three reasons are generally attributable to realizing
cost savings through outsourcing: 1) lower cost structure - an outside provider realizes
economies of scale that are created by serving multiple customers for the same need, resulting
in better service at a lower cost, 2) specialization - focusing on a single core activity,
and applying those skills across multiple diverse clients, creates an ever growing knowledge base
of tactics that can be applied to drive down costs, 3) research and development
- all research
and development is focused on a single core competency, facilities maintenance.
By partnering with an outside specialist, the company can leverage the contractor's significant
investment in improved technology and field-specific advancements to remain at the cutting edge,
without sacrificing its own internal resources. These improvements drive down cost for the company,
without significant investment or risk.
2. Improve company focus
Outsourcing lets a company focus on its core business by having operational functions assumed by
an outside expert. Freed from devoting energy to areas that are not in its expertise, the company
can focus its resources on meeting its customers' needs.
3. Gain access to world-class capabilities
World-class providers make extensive investments in technology, methodologies, and people. They gain
expertise by working with many clients facing similar challenges. This combination of specialization
and expertise gives customers a competitive advantage and helps them avoid the cost of chasing technology
and training. In addition, there are better career opportunities for personnel who transition
to the outsourcing provider.
4. Free your internal resources for other purposes
Every organization has limits on the resources available to it. Outsourcing permits an organization to
redirect its resources, most often people resources, from non-core activities toward activities that serve
the customer. The organization can redirect these people, or at least the staff slots they represent,
onto greater value-adding activities. People whose energies are currently focused internally
can now be focused externally on the customer.
5. Resources not available internally
Companies outsource because they do not have access to the required resources within the company.
Outsourcing is a viable alternative to building the needed capability from the ground, or investing
to expand a current capability. Again, economies of scale provide an advantage for outsource providers.
6. Gain better management and control
By serving many clients in several different markets, outsource providers bring a depth of knowledge and
experience which is difficult for companies to duplicate. Knowledge of industry best-practices, cost-saving
and capital-preserving techniques, as well as how best to implement them, allow outsource providers to deliver
results which are typically beyond what a company might be able to achieve alone. In addition, the company
can set aggressive goals, knowing they have an expert partner to implement and achieve them.
7. Share risk
A good outsource provider will deliver its services for a fixed, budgetable price. In this arrangement,
the outsource provider assumes financial responsibility should the
program's cost exceed the budgeted price.
By sharing its risk with an outside provider, the company can more accurately budget and predict its costs,
and free up capital reserves.
8. Navigate complex regulatory environment
Facilities professionals must understand multiple regulatory and compliance laws, and stay abreast of frequent
changes and new developments. Outsource providers invest significant resources to train their employees and
develop best-practice processes and procedures for navigating these issues. By outsourcing, a company
places this responsibility in expert hands, without sacrificing its own resources for training, technology,
or process development.
9. Improve flexibility
The economies of scale that arise from serving multiple clients for the same purpose create a broad skill set
for the outsource provider, which can be rapidly transferred between the clients it serves. By outsourcing
facilities maintenance, a company immediately increases its flexibility by increasing its skill set and
knowledge base. Tasks which were previously out-of-scope can be quickly assimilated. And emergency situations
can more rapidly be addressed.
10. Soft cost savings
In addition to the hard cost savings, companies that outsource typically realize additional
soft cost savings beyond the direct impact to the facilities maintenance budget.
These include hiring costs, training costs and employee benefits. Additionally,
administrative burden greatly decreases by removing several duties,
such as processing work requests, generating and reconciling purchase orders for materials,
and several other administrative activities.
