January 28 - 29, 2020
The Westin Fort Lauderdale Beach Resort, FL
The CPO's Corner
Management, Do we go global or regional with our Outsourced Facilities contracts?
There are many voices urging us to “go big”. Every day, the news is full of companies striking global partnerships.
There are goods that are produced to single standards and shipped across the globe – chemicals, for example. Laptops, too, save for adjustments in local power requirements.
That’s because goods can be replicated in different regions if they are produced on identical equipment, using the same processes, materials and standards. Vary one of those – try buying a New York bagel in a different state using local water – and you don’t get the same end product. But keep them consistent (produce in one location and ship globally, perhaps) and your clients across the globe have the same experience.
In outsourced facilities? Not so fast.
Because it’s all about the service. And that depends on the one input you can’t duplicate identically in every facility – people.
Facilities management is all about keeping employees safe, comfortable, and productive. FM providers might do it by insuring that snow is appropriately removed or that the HVAC and lighting are working the way they need to, but the ultimate success or failure of a facilities team depends on their responsiveness to the culture and needs of the people working in the buildings they manage. How many global companies have equally strong, focused people in all their teams, in every country?
That doesn’t mean that outsourcing to a global firm is the wrong thing to do. They will have resources, training, and processes that a small regional provider may not have. They’ll have leverage too – although that is also likely to be with global entities so you’ll have to judge if it works for your firm.
To do it right, consider the global provider’s strength and weaknesses in every region. Yes, that’s a lot of work but you have an obligation to your employees at every site, not just at headquarters. Don’t just talk to their big global clients, also speak with smaller clients and try to get access to a few clients for whom outsourcing didn’t work.
If you’re convinced that a global FM provider is what you want, remember the people aspects as you choose the provider and negotiate the agreement. Agree that your company will have the deciding vote on team leaders for every one of your facilities. Make sure your communication lines are open to the account lead, and ensure an escalation process is defined for when problems occur. Move quickly if there is an issue at one of your sites. And create a contract that allows you the flexibility to pull out some sites from the global agreement if the FM company cannot bring a satisfactory team to each and every one of your facilities.
Joanna Martinez is a global procurement / supply chain leader and the founder of Supply Chain Advisors LLC. She is a frequent lecturer and blogger on procurement topics and also provides coaching, strategy development, training, and cost reduction opportunity assessment. Her clients range from Fortune 100 companies to technology startups.
As either regional or global CPO, Joanna has led transformation initiatives for companies in many different sectors: among them Johnson & Johnson (consumer products), Diageo (beverage), AllianceBernstein LP (financial services) and Cushman & Wakefield (real estate services, property management). She has also held client-facing roles, effectively giving her the opportunity to “sit on both sides of the table”.