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Procurement under pressure

Interserve survey finds managers are struggling to reconcile the conflicting needs for cost savings and innovative service delivery

required, according to the FM Market Survey 2012, a new research study commissioned by Interserve and undertaken by Sheffield Hallam University in conjunction with i-FM. The survey, in which 585 service buyers


and providers were surveyed from across the UK, found that most organisations now have clear expectations when they outsource facilities management services, with cost reduction remaining the key driver. Yet innovation in service delivery is only reaching its objectives in just over 50 per cent of cases. Questioned around their reasons for

outsourcing, respondents indicated that financial savings (70 per cent), service level improvements (61 per cent), access to better technical expertise (60 per cent) and risk sharing (57 per cent) all take precedence when choosing a supplier. And the study has revealed that more than 70 per cent of organisations believe they have achieved these objectives in each case. Innovation, in contrast, is falling short at

56 per cent, with organisations citing internal pressures such as financial barriers, resistance to change and a lack of board level support, alongside issues such as a lack of supplier investment as the main barriers to delivering innovation.

Bruce Melizan, executive director at

Interserve, said: “All business disciplines are under pressure to perform and facilities management in particular is often required to deliver ‘more for less’ in the post-recession economic climate. Over 85 per cent of the respondents in this survey are experienced buyers that have been outsourcing for more

SHOPPING CENTRE FEBRUARY 2013 Bruce Melizan Horses for courses

Respondents described the core benefits of each procurement model:

• In-house: flexibility of in service delivery and service quality

• Single services: service quality and access to technical expertise

• Bundled services: reducing costs • Integrated facilities management: value for money

• Total facilities management: value for money and cost reduction

• Total facilities management and property services: value for money, reducing costs and improved management information.

cost-conscious, service-led approach to outsourcing facilities management is delivering value but may be failing to achieve the levels of innovation

than three years; and so it is encouraging to see that organisations are now reaping the benefits of improved cost and service efficiency through an outsourced facilities management model. “However, there is also a clear expectation

that facilities provision should now be delivering much more than cost savings alone; meaning that our industry must ensure it continues to adapt by providing a service that adds value to the client’s brand, business performance and reputation.” The survey also revealed that performance

pressure is here to stay. When asked to rank objectives in order of likely importance in five years’ time, respondents listed the top five as: value for money, reducing costs, service quality, flexibility of service delivery and added value/innovation. The standard three-year contract term is also being questioned. Although a third of organisations still opt for this term, almost a quarter are now using five years or longer and slightly more do not apply a standard term for their contracts.

585 individuals responded to the research,

undertaken by the Centre of Facilities Management Development at Sheffield Hallam University and partnered by i-FM. 66 per cent of respondents were from the private sector. Over 50 per cent of respondents work in London or the South of England and 10 per cent outside of the UK. Organisational size was split fairly between those with budgets of less the £550k, those between £500k and £3m, those between £3m and £25m and those with over £25m.

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