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Roadmap

Optimize Your Facilities Outsourcing Arrangements

Decision Support
Determine the feasibility and viability of outsourcing a function

Facilities oversees a variety of functions and responsibilities, some of which cannot or should not be outsourced. Leaders therefore need to carefully evaluate possible outsourcing opportunities to ensure that some benefits (such as financial savings) are not outweighed by other costs like a reduction in response time to customer calls.

Six considerations before outsourcing a function
Perform a comprehensive value for money analysis
Many institutions consider the potential cost savings of outsourcing a function, but this often represents only a partial analysis. A Value for Money analysis will identify actual valuations and potential valuations.
Identify the level of complexity of the function
Functions with either low-complexity (e.g., custodial services) or high-complexity (e.g., HVAC maintenance) tasks are good candidates for outsourcing because employing both require extensive personnel funding.
Consider the value of incremental improvements (or decreases) to service levels
Institutions must evaluate the service level they require from the function, as well as how outsourcing might impact its performance.
Calculate the expected frequency of the activity
Institutions should evaluate how frequently they anticipate functional demand (e.g., seasonal leaf blowing or snow plowing) when deciding whether to outsource it.
Understand the function's current staffing burden on human resources
While all functions require HR support, certain roles, such as those with high turnover rates, demand more from human resources and are often good outsourcing candidates.
Match the strategic value of the function to institutional goals
All Facilities functions contribute directly or indirectly to institutional strategic objectives. Before outsource a function, institutions should first identify the strategic goals the function impacts.
Additional Tool

Leaders seeking step-by-step guidance to evaluate the viability of an outsourcing arrangement can use EAB’s Facilities Outsourcing Decision Worksheet. The worksheet quantifies ten separately weighted criteria to provide an outsourcing possibility score.

download the worksheet
Decision Support
Evaluate potential outsourcing service providers

While cost and service levels considerations often drive the search for a vendor, it is important for institutions to find outsourcing partners with proven higher education experience, clear and transparent processes, and a deep bench of managerial talent. Vendors will provide case studies of their past performance, but leaders can independently evaluate potential partners using the following questions.

download the interview guide
Action Support
Avoid detrimental language in outsourcing contracts

After selecting a partner, leaders must craft a contract that establishes service levels and governs the outsourced relationship. This is critical to do correctly, as a poorly defined contract can prevent the partnership from succeeding.

Avoid the following five mistakes
Giving up strategic and managerial control
Arrangements are most effective when the institution retains its ability to set goals, specify service-level targets, and prioritize particular campus spaces and evaluation metrics.
Leaving expectations and responsibilities vague
Contracts often collapse when institutions assume vendors will procure their own supplies or when service providers have different understandings of service level requirements.
Focusing on operations (instead of results)
Institutions should spell out their desired results—even going as far as to include photos of service-level achievement in the contract—and let vendors determine how best to accomplish those results.
Misaligning institutional and vendor goals
Leaders should vest the vendor in the success of the institution overall, and ensure contracted staff are integrated into the campus community. Shared goals include reduction in deferred maintenance and joint cost savings from improved efficiency.
Committing to unnecessarily long time frames
While long-term contracts frequently offer upfront financial benefits, these contracts can lock institutions into problematic or unsatisfactory arrangements without recourse to renegotiate. Limit contracts to five years with options.
Action Support
Implement oversight processes to manage vendor relationship

While a well-structured contract lays the foundation for an effective working relationship between the institution and vendor, it alone is not sufficient to ensure the relationship proceeds smoothly. Successful outsourcing partnerships require management on a monthly, weekly, and daily basis. The essential components to vendor management are contract managers, quality assurance, and communication.

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