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6 Principles to Adding value to FM Service delivery.

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6 Principles to Adding value to FM Service delivery.

6 Principles to Adding value to FM Service delivery.
Comparison between services giant Interserve, recently showing further signs of difficulty, and Carillion which collapsed in the first weeks of 2018 is inevitable. There are similarities in size, scale and scope, but these are different companies, and there are different facts.

But what this shows yet again, is that a drive for low margins combined with poor procurement practice has led to an over-reliance on these mega businesses. Add to this the mode for thinking about facilities management as a cost centre to be cut rather than as a factor for added value and you have a recipe for risk. This was the point Chris Moriarty emphasised recently on BBC Breakfast, speaking in the context of the Interserve debt news.
In a way, outsourcing has become a victim of its own success because it has been good at providing a rationalised and efficient service which for years has provided great savings. But when there is no fat left to trim, and margins are targeted, problems arise.
This is not to vilify outsourcing per se; there are many examples of outsourcing firms delivering excellent services driven by value. And these firms are bringing added worth to client businesses such as access to expertise, technology, innovation and information management, delivered efficiently by high-quality people.
As we said at the time of Carillion’s fall, putting social value at the heart of procuring and delivering services is key in getting from lowest cost to best value. This won’t happen overnight, but it is essential that a uniform framework is embedded, and government works with suppliers to achieve this. This will also set the tone and create the space for the rest of the supply chain, especially in the public sector.
There is no single approach to restoring public trust in the outsourcing model. But here are six guiding principles that might steer us in a good direction.
1. A value driven approach, incorporating quality and social value, which delivers for all stakeholders
2. Enabling realistic margins
3. Up-skilling for professionalised procurement processes, with shared objectives, shared data where possible, and a partnership approach
4. Consistent prompt payment
5. Wide ranging minimum standards underpinned by a code of conduct
6. Transparency about the service delivery, which enables trust between partners. The role of technology and data driven innovation should be promoted here.
It’s encouraging to see Government departments recognising these principles and beginning to implement a value-based approach including by giving more weighting to the quality element in bids, requiring the social value element to be evaluated in contracts, providing more opportunities for small suppliers and extending the time limits for tender applications. We need to see these principles incorporated widely.
Linda Hausmanis was interviewed on BBC5 Live’s Wake up to Money on in December and Chris Moriarty appeared on BBC Breakfast.
*These principles have been distilled from discussions between senior FM professionals on both client and service delivery side as part of gathering evidence for post-Carillion Parliamentary Inquiries.


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