FM outsourcing: how the business environment is causing a transformation
The increasingly volatile, uncertain and ambiguous business environment towards 2020 requires organisations to articulate sharply defined strategies and form partnerships that enhance their competitiveness and agility.
Organisations have become increasingly interested in pursuing new models of FM outsourcing with a higher degree of collaboration that fulfils outsourcing goals and expectations. Typical goals and expectations include: cost flexibility and cost savings, innovation, growth, brand protection, and access to both talent and new markets.
Outsourcing within FM is transforming and being driven by development operating on three levels: megatrends, trends in outsourcing, and trends in FM outsourcing.
Now and in the future, organisations will be required to engage with megatrends in some capacity in order to maintain and further their position in the market. Megatrends will reshape the outsourcing industry in a number of ways, including: change the way in which providers differentiate themselves and compete; create new service provider relationships; introduce new contract forms; and open up service areas for outsourcing.
Likewise, towards 2020, there are three key trends that are transforming outsourcing: outsourcing is becoming more strategic; relationships between sourcing firms and outsourcing providers are evolving from being transactional towards a spectrum of relationships based on various degrees of interdependence; and outsourcing is pervading more regions globally. While the impacts will vary by industry, process maturity and region, they reflect the general tendencies and changes in outsourcing towards 2020 and beyond.
In many ways, FM and workplace management form the cornerstone of business – an ever-evolving array of increasingly strategic support processes dealing with the integration of corporate real estate, facility services, talent and asset management, among other things.
There will be significant potential for FM outsourcing over the coming decade. FM will focus on supporting talent management, creating dynamic workspaces, and driving behavioural change among employees in customer organisations, while reducing FM’s labour intensity and improving its ability to use data analytics to drive service delivery.
In light of the megatrends and the range of trends in outsourcing, there will be increased emphasis placed on personalisation and on business innovations in FM outsourcing, transforming the industry.
ISS has identified five emerging sourcing approaches that could change how outsourcing partners interact over the coming decade:
- Crowd sourcing: The process of obtaining needed services and solutions by soliciting contributions from a large group of people through third party platforms, rather than from in-house employees or service providers.
- Solution sourcing: A form of B2B crowd sourcing, where client organisations solicit solutions and select a partner from a large number of external service providers, placing a strong emphasis on value-based business outcomes.
- Network sourcing: An approach for obtaining and delivering needed services and solutions within and between value networks.
- Co-sourcing: A long-term, one-to-one business arrangement wherein business functions are maintained through a combined effort by internal and external partners, both with a mutually vested interest in the outcome of the collaboration.
- Mesh sourcing: A highly collaborative, networked eco-system approach to outsourcing and service provision. Business interests and operations are meshed across several organisations, sharing mutual interest in profit, values and social change.
For a more in-depth analysis, download the white book from ISS titled, ‘Future of Outsourcing and Perspective for Facility Management’