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9 September 2020 

PARTNERSHIPS IN OUTSOURCING: DREAM OR REALITY?

Outsourcing often does not equal partnership in Facility Management land. We always feel that a partnership can be very well compared to marriage: both parties need to adjust to make it work. While organizations that do not see their suppliers as their partners often feel that only the other party needs to change. And if that doesn’t happen, they will file for divorce 😉 In that sense it doesn’t sound that logical anymore, does it? Especially parties who you’re working with for years, there needs to be an investment on both ends – whether that investment would be time, effort or money.

 

What is a partnership?

We always explain a partnership as follows. A partnership is a long-term relationship between a customer and a supplier. Not only just with the aim to work together to deliver Facility services but also with the aim to innovate and develop together, to get to know each other thát well that the quality of service delivery will go up substantially. Also, there needs to be a good (cultural) match between the supplier and the customer: they really wánt to work together. This process already starts at the procurement phase, where the customer not only procures for the best rate but also weighs in on the supplier’s action plan, morals and values, and work structure. And, like we said, it requires hard work from both ends. Both need to be willing to invest in the partnership, all with the same goal: deliver the best results possible.

 

Partnership = letting go of KPI’s

NO! That’s a hard no. Even though it might sound like a partnership is all fun, you still want to put measurements in place to check if your partnership delivers what you aim for. So never ever let go of KPI’s! However, we feel that it is true that they become less important. Or, share the top of the priority list with other elements if you will. In a partnership, KPI’s become part of the bigger picture. A partnership can only exist if the supplier cares enough to meet the KPI’s and other goals. This leads to flexibility and trust, which is of incredible value and gives more parties more wiggle room for development, new initiatives and innovation.

 

The benefits of a partnership

Why should you want to engage in a partnership with your supplier? Here’s why:

  1. Continuous development and improvement. Suppliers are the subject matter experts, so use that. They often are far ahead in new developments and how to use that for your organization. A good partner will not just tick off the KPI list. They will continuously seek for ways to amend their business to yours and a partnership often gives them the authority to do that and make your Facility services even better.
  2. Long-term commitment. No need to re-procure a service every two or three years. A partnership usually last longer, even up to 10 years for Integrated Facility Management contracts sometimes so you just need to focus on solidifying the relationship instead of looking for a new one.
  3. If you want to go fast, go alone. If you want to go far, go together. A supplier can do it on its own: that’s exactly what we’ve seen in traditional collaborations over the years. But when the customer supports the supplier and really enables them to step into their role, they will achieve better results. Simply because both parties are better able to understand each other and the main goals.

 

Sounds like a fairytale?

Right?! Well, almost. We think that there is so much to learn from a customer/supplier partnership and it could benefit many organizations big and small (will get into that in a bit). But what are the downsides that we need to look out for?

  1. The obvious one: it takes a village. Remember the marriage comparison? You both need to keep working on it, so the investment – definitely time-wise – is a lot bigger than with a traditional customer/supplier relationship. But: the supplier does the exact same thing. We’ve witnessed suppliers in The Netherlands achieve cost reductions for their clients even though this means that they will make less of a profit themselves. That’s what a partnership is about: really focusing on the best possible result, even though both parties suffer for that sometimes.
  2. The supplier gets lazy. This really doesn’t sound very nice does it? As the supplier just signed a long-term deal with you, they’re probably stoked. But you do need to keep them on their toes to prevent them from slacking. Not saying all suppliers will, don’t get me wrong! But daily work happens and it’s easy to get distracted by daily operations. How to prevent it? Make sure to keep KPI’s in place and follow up on them, that way you can still steer on results besides on the soft side of the partnership alone. You can also work with a bonus system for new ideas and innovation to stimulate the supplier at all times. Note: this bonus doesn’t necessarily have to be monetary! It can also be an extension of the partnership.

 

Focus

Every Facility department has a certain focus: this can be end-user centricity or personalization, but it can also be efficiency or innovation for example. A partnership can help you towards this goal and strengthen your focus. We roughly separate four different focus areas:

  • Optimization: the focus will be on optimizing service delivery. Usually this is done by seeking for efficiencies in business processes, faster service delivery or seeking agility.
  • Transformation: if you want to focus on high levels of personalization or adjustment to your end-user, you probably want to combine that with innovation. But: for many organizations, this is a big step which is why we refer to it as a total transformation. It often includes transforming business processes, creating new services or designing totally new solutions.
  • Maintenance: if your focus is on getting it right in the maintenance department and creating an efficient maintenance service, we often see that the partnership is focused on standardization. With maintenance specifically, standardization can prevent a lot of corrective maintenance.
  • Management: when the focus is on business efficiency as a whole, the partnership will be designed to use best practices and support process efficiency (and in management especially with a top-down approach).

 

Partnerships for all

Are partnerships for everybody? Well, we do see that customer/supplier partnerships are often linked to organizations with an Integrated Facility Management structure. Why? Because so far, we mainly see true partnerships when the Facility department is more developed, and more services are outsourced (and more money is on the line). And so usually that’s when organizations are more likely to want to engage in a partnership with a supplier. Should you stop reading if you’re not one of those organizations? Not so fast! Every organization can apply partnership practices for a higher quality standard and overall more effective Facility department.

 

Big or small: what any organization can do

We have said it before: we mainly see a partnership with Integrated Facility Management strategies. Which makes sense, because the stakes are higher with higher scope and budgets so you will need a reliable long-term partner. But: a partnership can work for any organization. Because it helps you achieve your goals including being more innovative, reducing costs, increase employee retention, etc. Sidenote: both you and the supplier should be ready for this because it is a totally different mindset from the traditional customer/supplier relationship.

 

At the end of the day, a partnership is not just about being the big boy spending the big bucks. Because 80% of a partnership is about trust, flexibility and most of all respect for each other. With that, you will really work together side by side and achieve the best results possible. How to take the first step? Start treating your supplier as an expert and change your mindset and communication. You will notice soon enough how it will make all the difference in the world.

 

About the author
We of The World of YES are helping you as a facilities manager to develop yourself or your organization to make the next step. We do so by giving you the best tips, tricks and newest trends via our blogs, video's and training courses. Lastly, in our community we connect Facility Managers from all over the world to share their stories and successes to help each other even further.
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