Outsourcing can really be what we call in Holland “een hoofdpijndossier”, which basically means “gives us a headache”. But: it can really also lead to an amazing collaboration or even partnership with big benefits. Many of us are used to selecting the cheapest supplier because that's the story of our lives, right? We're always on a budget. But does that lead to contracting the best supplier for the job? And so we felt that it was about time to share our experiences on: how to select the right supplier to support your team?
1. Use non-quantitative selection criteria in addition to quantitative ones
It all starts with the selection process in the first place. Especially when you are in the market for an integrated facility management contract, or any larger contract in general, we always advise you to look beyond costs. It's as simple as that, and you may think like that's captain obvious. But honestly, we've not seen many organizations in practice that áctually procure services beyond just costs.
Let's take a look at the integrated facility management example. That means that you outsource all tactical and operational management of your facilities. Pretty big deal if you ask me. These contracts are often long-term up to 10 years so you will be working together for a long time. Also, this will basically be your in-house team: in an IFM contract, the supplier is taking over probably 80% of the facility department. So, you're basically choosing your new colleagues for a very long time. Does it make sense to do that based on money alone? Would you hire a new co-worker based on their salary? You would not, right? I hope 😉
And so we always advise to use a very extensive list of selection criteria that also involve non-quantitative data. Such as: what is the work attitude and culture of the supplier, does that match yours? What type of people are working for this supplier, and what's their expertise etc. And again: unfortunately we see still don't see this very often!
2. Transparency in the procurement process
Only if you communicate in an open and transparent way, you will achieve the results you're looking for. This goes for both parties: facility manager ánd supplier. For the facility manager it's important to be transparent on two things: the scope and the expectations. We often see that there's a scope on paper that turns out to be different in real life. A thing or two have been “lost in translation” and need to be added when the contract is already in operation. Sometimes big things and that means big trouble. Also, making clear what the expectations are is extremely important. Leave little room for misunderstandings. Set up quality guidelines, KPI's and audits.
It's then up to the supplier to be honest as well. It happens so often that suppliers take on contracts knowing they can't live up to the agreements that are in place and this gets both parties into trouble. Here in The Netherlands for example, it's very common to fine a supplier if he's not living up to the agreement. Loss of money + unhappy client = not the situation we want to be in! 😉 This can only be avoided when there's a clear an open conversation during the procurement process from the very start. This will also lead to having more in-depth conversation, which will help the facility manager to understand which supplier is the best one for the job.
3. Evaluating your list of suppliers
If you are already working with a few suppliers, you still want to evaluate whether they are fit for the job. As organizations start outsourcing more and more of their facility services, we often see an increase in the list of suppliers. This happens for several reasons: one supplier for every service, one local supplier for every country you're located in, etc. Obviously, this can be a very well-considered decision, but often it's not. Does your list of suppliers still match your needs?
So, what to do? Regularly think about the coverage that you need. Do you have one supplier for every service? Then evaluate: is this necessary? Do we have the best specialist supplier for each service? Or can we decrease the number of suppliers because the cleaning supplier also offers catering and security? Same goes for the one supplier in every country situation. Can you contract a global party that can cover all countries under one contract? In that case, you can decrease the number of contracts, decrease the number of contact persons and therefore you may be able to optimize the collaboration and increase the service quality.
Do you already live up to these three tips? And what is your golden tip to share with others? Comment below! Also, if you'd like to learn more about the topic of outsourcing you can read our outsourcing blogs here of learn more about our training course here.