Facilities Management Outsourcing Research Articles

Agency problems in facility management (FM) outsourcing in the Ghanaian retail sector

Purpose The aim of this study is to examine the agency problems that arise between retail property owners and outsourced facility management (FM) service vendors in Ghana. Design/methodology/approach This study was carried out using telephone and face-to-face interviews. Nine facility managers (n =9) and six retail property owners (n = 6) purposively selected participated in the interviews. The responses from the interviews were analysed using content analysis. To begin with the analysis, the recorded audio for each respondent during the interviews was transcribed to augment what was written during the interviews. The next step was the development of a coding framework where each of the agency problems was assigned unique codes and grouped under themes. Each response was assigned a predefined code based on the agency problems identified in the literature. The research team discussed the consistency of the thematic codes assigned to each of the responses to ensure that each response was captured under the appropriate agency problem theme it best represents. Findings The results showed that agency problems in FM outsourcing in the Ghanaian retail sector are related to disagreement on expenditure associated with maintenance and repairs and improper tenant information sharing and use by FM service providers. Based on the findings, it is recommended that property owners explore the mixed approach to FM to mitigate the risks of complete outsourcing of FM services. It is also recommended that a clear path on how tenant information can be shared be pre-agreed in FM contracts. Originality/value This study provides new literature relating to agency problems in outsourcing and may be the first of its kind for FM in the Ghanaian retail industry. The findings could serve as a starting point for service providers and their principals to find common grounds to understand each other and mitigate the agency problems that could arise and their overall impact on performance.

A sustainable artificial intelligence facilities management outsourcing relationships system: Case studies.

The purpose of this article was to validate the published artificial intelligence (AI) facilities management (FM) outsourcing relationships system by real business cases in the working environment. The research aims to inspire the modern FM professionals in different industries with some challenging and innovative concepts about FM outsourcing relationships between facilities owners and service providers. First, it will briefly introduce the theory of the FM outsourcing relationships system on how it can help the FM seniors and strategists to design their FM daily strategies wisely and make their business more effective and productive. Second, it will also introduce what the research is practically doing in the stage of case study for test and verification. It is concluded that FM outsourcing categorization may help to define the appropriate relationships. This further detailed outcome generated from the AI can be considered a solid reference to define and explain the existing outsourcing relationships between the stakeholders and the service providers to assign an outsourcing category to the FM relationship between the client and service provider based on the learnt rules.

Facilities Management Outsourcing Options: Evidence from Practices in Sri Lanka

Facilities Management (FM) can be identified as an emerging profession in Sri Lanka, where FM outsourcing has become a new and tactical business approach for carrying out a variety of FM services. It is a way of optimising core function of the organisation by transferring non-core functions to external parties. Generally, FM outsourcing options include managing agent, managing contractor, total FM, bundle service, single service and integrated service. Applicability of these methods depends on the current situation of the FM industry. Presently, these options are commonly used for FM outsourcing practices in Sri Lanka. However, all these methods are not perfectly applicable with the current condition of the Sri Lankan FM industry. This urges the need of identifying the most ideal FM outsourcing option(s) to deliver FM services in Sri Lanka. This paper, therefore, aimed to investigate the current FM outsourcing practices in Sri Lanka to identify the most ideal FM outsourcing options(s) by bridging the knowledge gap in prevailing literature.
 The research aim was achieved through a qualitative approach with qualitative interview survey strategy. Semi structured interviews were conducted as the data collection technique with twelve experienced FM industry practitioners. The collected data was analysed using content analysis method. Research findings revealed that all FM outsourcing options are currently practiced in Sri Lanka and among them, single service option has become the most commonly used method to deliver FM services. However, it was proven through the findings that with the evolution of FM, organisations have to move from traditional methods to modern methods for FM outsourcing. As a result, even though single service option is the most commonly used method, integrated service option was identified as the most ideal and appropriate FM outsourcing option in Sri Lanka based on the benefits from clients’ as well as service providers’ perspectives. The knowledge generated through this study can be used by the FM practitioners, clients and service providing organisations in order to practice most appropriate FM outsourcing option(s) in Sri Lanka by gaining the expected benefits from FM outsourcing.
 Keywords: Facilities Management (FM), FM Outsourcing, FM Outsourcing Options

The Challenges of Sustainable Development on Facilities Management Outsourcing Services: An Investigation in Educational Facilities

(1) Background: Generally, firms are reluctant to report outsourcing failures, no matter what industry they operate within. To eliminate poor performance of outsourced service providers, it is necessary to establish a specific outsourcing relationship model for facilities management (FM). The purpose of this paper is to study the concept of outsourcing relationships in relation to FM and to investigate the design of the critical success factors on sustainable outsourcing strategies through a discussion of four dimensions (ownership of FM assets, control of FM assets, competitive position and long-term plan). (2) Methods: Based on two questionnaire surveys, data were collected from 38 clients and 34 service providers. The study evaluated the FM outsourcing strategies from critical success factors in educational facilities in Hong Kong. (3) Results: This study explains the impact of FM outsourcing strategies on Hong Kong’s four commonly outsourced FM contracts including building maintenance, security, cleaning and catering from the clients’ and service providers’ point of view. (4) Conclusions: This is the outsourcing way forward in order to create a better working environment conducive for all the parties that would result in better sustainability of FM’s future and thus impact the economic objectives of sustainable development, in parallel with adding social and environmental value.

A Sustainable Facility Management Outsourcing Relationships System: Artificial Neural Networks

The Contingency Outsourcing Relationship (CORE) model originated from the Four Outsourcing Relationship Types (FORT) model; the CORE model is used in the globalized Facility Management (FM) industry, while the FORT model is originally used in the global information technology industry. The purpose of this paper is to thoroughly analyse the simulated case studies of the four different categories (i.e., in-house, technical expertise, commitment and common goals) of the CORE model from the perspective of the various clients. This study builds on the previous work on the outsourcing relationships between a client and a globalized FM service provider. It further explores the application of this model with the aid of artificial neural networks (ANNs) towards a sustainable future. A quantitative methodology through a survey is used to analyse eight outsourcing strategies for the four outsourcing relationships. A set of revised rules of the CORE is introduced and discussed regarding the approaches to investigate the four simulated outsourcing relationship systems. The study further reveals that an interesting understanding of the four outsourcing categories can be systematically and efficiently implemented into the FM outsourcing relationships through the methodology of scientific Artificial Intelligence (AI). It is concluded that FM outsourcing categorization may help to define the appropriate relationships. This further detailed outcome generated from the ANN can be clearly considered a strong and solid reference to define and explain the existing outsourcing relationships between the stakeholders and the service providers with the aim to assign an outsourcing category to the FM relationship between the client and service provider based on the learnt rules.

Globalized service providers’ perspective for facility management outsourcing relationships

PurposeThe Contingency Outsourcing Relationship (CORE) model originated from the Four Outsourcing Relationship Types (FORT) model and the CORE model is used in the globalized facility management (FM) industry while the FORT model is originally used in the global information technology industry. The purpose of this paper is to analyze the CORE model through the rankings of relationship between a client and a globalized FM service provider from the perspective of the FM service provider in one of the four categories (i.e. in-house, technical expertise, commitment and common goals) and the application of this model with the aid of artificial neural networks (ANNs).Design/methodology/approachA quantitative methodology using a survey is used to analyze the four types of outsourcing categories. First, the background theory and a set of rules of the CORE is introduced and discussed regarding the proper ways to identify the rankings collected from the survey.FindingsThe study reveals that an interesting understanding of the outsourcing categories can be systematically implemented into the FM outsourcing relationships through the methodology of scientific artificial intelligence. FM outsourcing categorization may help to define the appropriate relationship; as either not too aggressive or too passive.Originality/valueThe outcome generated from the ANN can be considered a strong and solid reference to assess and define the existing outsourcing relationships between the stakeholders and the service providers with the goal to assign an outsourcing category to the service provider based on the learnt rules.

Design of Sustainable Outsourcing Services for Facilities Management: Critical Success Factors

The management problems of Facilities Management (FM) outsourcing relationships occur because of provision of low quality analytical, managerial, cooperative, and professional services. On selection, the ideal service providers for specific FM outsourcing contractual procurement needs is of paramount importance to achieve high quality FM services. This paper aims at reviewing the concept of outsourcing in relation to facilities management and dealing with the importance of outsourcing success. Factors of outsourcing strategies from the perspectives of clients and service providers are examined and analysed through the Delphi technique in Hong Kong. The results reveal four main drivers of FM practice through evaluation of thirty-five outsourcing critical success factors identified by clients and service providers. Evaluation of the critical success factors from FM drivers shows that there is an inclination towards FM competence, measurement of performance, cost effectiveness, etc. from clients, whilst there is an inclination to the core skills, measurement of performance, allocation of human resources, cost effectiveness, customers’ satisfaction, etc. from service providers. The result of the study reveals an interesting understanding that the impact of outsourcing critical success factors can be strategically implemented into the outsourcing strategies in Hong Kong’s FM practice.

Facility Management Outsourcing through Multi-Attribute Auctions

We introduce a multi-attribute auction-based mechanism with an endogenous score as a means to innovate the procurement of facility management (FM) activities in private and public sectors. The mechanism allows the procurer to request bids on several measurable technical and economic attributes of the supply of FM services. The procurer also assigns weights to such features to signal their importance to the sellers, while the score obtained with respect to each attribute is endogenously determined on the basis of the submitted offers for the attribute. The proposed mechanism mitigates the most relevant drawbacks due to the lack of skills and of crucial information on the outsourced non-core activities, while requiring the procurer very little auction design effort. On the one hand, the mechanism can extract from suppliers valuable private technical knowledge as well as the information on the supply cost. On the other hand, it saves the procurer from detailing ex ante both the score which will be assigned to any possible bid for every attribute and the exact value to require for any technical feature of the supply.

Demand and supply of FM outsourcing services

PurposeThe purpose of this paper is to address the structure of the category on client-provider outsourcing relationship in relation to facilities management (FM). The paper aims to rank different outsourcing relationship types according to importance with respect to the four critical FM drivers including co-ordination, quality, competence and adequacy.Design/methodology/approachThe survey design and measures operationalising the constructs allow the use of the analytic hierarchy process (AHP), a technique that tests FM outsourcing in a contingent approach such as a decision processing model. In the questionnaire surveys, a series of structured questions is designed. FM experts used the AHP methodology to analyse the FM outsourcing relationship types.FindingsThe model of the FM outsourcing strategies presented in the paper shows four main FM drivers at FM practice through the priority ratios of outsourcing relationship dimensions for different FM outsourcing contracts as derived by the AHP discussed by clients’ and service providers’ points of views. The result of a survey from the Hong Kong’s higher education industry reveals that the FM service providers can understand the needs of the clients in FM outsourcing contracts, including building maintenance, cleaning and catering. Hence, the service providers’ expected outsourcing performance will be good in these contracts. However, FM service providers do not understand the needs of FM clients in the FM outsourcing security contracts. Thus, the service providers’ expected outsourcing performance in such contracts will be poor. To improve the outsourcing relationships between the FM stakeholders, service providers must understand their clients’ needs to develop appropriate outsourcing strategies.Originality/valueUnderstanding on the demand and supply of FM outsourcing services is now crucial for effective FM on outsourcing relationships between clients and service providers in higher education sector. The examination of current and prediction of future outsourcing relationships between the stakeholders to match the FM services significantly influence FM outsourcing success. This paper provides an intriguing insight into how the demand and supply of FM services can be successfully and strategically implemented into the FM outsourcing relationship in Hong Kong’s universities and tertiary institutions.

Facilities management outsourcing relationships in the higher education institutes

Purpose– This paper aims to test the nine corollaries concerning the determinants of outsourcing relationship dimensions, strategic manoeuvres, clients’ and service providers’ evaluation regarding outsourcing category and outsourcing relationship types.The paper has the purpose of reviewing the concept of outsourcing in relation to FM, dealing with service providers’ performance and its effect on clients before providing a comprehensive discussion of outsourcing.Design/methodology/approach– A conceptual approach is adopted, suggesting that a study of outsourcing relationship between clients and service providers from these theoretical perspectives is used to develop corollaries about the relationships between the strategic manoeuvres identified and the different dimensions of outsourcing relationship. The corollaries are examined using non-parametric tests.Findings– The model of the facilities management (FM) outsourcing relationships presented in the paper shows performance of outsourcing services through evaluation of outsourcing categories on current and future FM contracts of clients and service providers. As a template of outsourcing relationships, the model is the context for predicting the important outsourcing categories to the future four FM outsourcing contracts, such as building maintenance, security, cleaning and catering. On prediction of those FM contracts, there is an inclination to the types of in-house and technical expertise on category of FM outsourcing relationship types from clients, whilst there is an equal inclination to the type of in-house outsourcing category from service providers.Originality/value– Management on outsourcing relationships between clients and service providers is now essential for effective outsourcing in FM. This paper provides an intriguing insight into how the effect of outsourcing relationships can be strategically implemented into the performance of service providers.

KS 시설관리 표준규격을 바탕으로 한 대학시설 FM 서비스 발전방향

Abstract Over the years, great attention has been shown to the function of the campus facilities that should be well-equipped, operatedand maintained to better support university’s two main goals: providing education and supporting research. Properly managing campus facilities is the initial step to be prepared to meet the rapidly changing global educational standard. However, so far, nodefinitive answer has been given to the question of what service level/scope is appropriate for the effective campus facility management (FM) in Korea. Therefore, at the outset, it is imperative to establish the framework for the standardized campus FMservices. The main focus of this research is to provide comprehensive understanding on the campus FM by establishing the framework in the form of FM performance indicator (PI). As the first step, FM standards set by Korean Agency for Technology and Standards (KATS) has been thoroughly reviewedand analyzed to establish the framework for FM standards applicable to campus facility management. Secondly, extensive literature review on the development of performance indicator (PI) for the educational facilities has been conducted to classifyPI types and complement FM_KS. Finally, specific guideline and PIs developed by APPA which is globally well-known association in the field of FM for higher education facilities has been added to the combined PI which is the mixed form of FM_KS and PIs from the previous literature. This research provides campus facility managers and FM outsourcing service providers with framework in the form of PI to support future directions of effective campus FM services.

PORTFOLIO PERFORMANCE BENCHMARKING WITH DATA ENVELOPMENT ANALYSIS

This paper proposes data envelopment analysis (DEA) as a suitable data analysis tool to overcome facility management (FM) benchmarking difficulties: FM performance benchmarking analysis is often unsophisticated, relying heavily on simple statistical representation, linking hard cost data with soft customer satisfaction data is often problematic. A case study is presented to show that DEA can provide FM personnel with an objective view on performance improvements. An objective of the case study is to investigate the relative efficiency of nine facilities with the same goals and to determine the most efficient facility. The case is limited to nine buildings in FM on four inputs and nine output criteria. The paper concludes by demonstrating that DEA-generated improvement targets can be applied when formulating FM outsourcing policies, strategies and improvements. Facility manager can apply DEA-generated improvement targets in formulating FM outsourcing policies, specifications development, FM strategy and planning. FM benchmarking with DEA can enhance continuous improvement in service efficiency and cost saving. This will help reduce utility cost as well as pollution. This paper fills the gap in the research of FM benchmarking by applying DEA which studies both soft and hard data simultaneously. It also contributes to a future research of a trade-off sensitivity test between FM cost, services performance and reliability.

FACILITY MANAGEMENT BENCHMARKING: AN APPLICATION OF DATA ENVELOPMENT ANALYSIS IN HONG KONG

This paper proposes Data Envelopment Analysis (DEA) as a suitable data analysis tool to overcome facility management (FM) benchmarking difficulties: FM performance benchmarking analysis is often unsophisticated, relying heavily on simple statistical representation, linking hard cost data with soft customer satisfaction data is often problematic. A case study is presented to show that DEA can provide FM personnel with an objective view on performance improvements. An objective of the case study is to investigate the relative efficiency of nine facilities with the same goals and to determine the most efficient facility. The case is limited to nine buildings in FM on four inputs and nine output criteria. The paper concludes by demonstrating that DEA-generated improvement targets can be applied when formulating FM outsourcing policies, strategies and improvements. Facility manager can apply DEA-generated improvement targets in formulating FM outsourcing policies, specifications development, FM strategy and planning. FM benchmarking with DEA can enhance continuous improvement in services' efficiency and cost saving. This will help reduce utility cost as well as pollution. This paper fills the gap in the research of FM benchmarking by applying DEA which studies both soft and hard data, simultaneously. It also contributes to a future research of a tradeoff sensitivity test between FM cost, services performance and reliability.

Structural equation model for analysing critical risks associated with facilities management outsourcing and its impact on firm performance

Purpose – This study aimed to develop and empirically test a structural equation model for investigating risk factors associated with outsourcing of facilities management (FM) services and its impact on firm performance (FP). Design/methodology/approach – Using data derived from an earlier study, a conceptual model was hypothesized and empirically tested to clarify causal relationships between risk variables and how they influence FP. Findings – Supported by empirical evidence, the study established that only vendor risk variables have marginal impact on FP. There were however significant positive relationship between vendor risks factors and relationship risk factors, client based factors (CBF) and relationship risk factors, client based risks and vendor related risks, and contract risks factors and relationship risk. Practical implications – The final structural equation model has revealed key risk components that would require standard mitigation measures in order to achieve outsourcing success in the FM sector. It is a sector that is thriving in Nigeria and requires every effort to make it an international recognised market. Originality/value – This paper provides a greater understanding of the interactions between key elements of outsourcing risks associated with FM provision as well as the degree of relationship between them.

Analysis of risks associated with facilities management outsourcing

PurposeThe purpose of this study is to analyse the risk factors associated with outsourcing of facilities management (FM) services.Design/methodology/approachThe study administered questionnaires on 146 registered members of International Facilities Management Association (IFMA), Nigeria chapter, who carry out their professional practice in Lagos, Nigeria. The survey, conducted in February, 2011 targeted facilities managers, property managers, maintenance officers and procurement officers cutting across the three levels of management. A total of 61 of them returned valid questionnaires, giving a response rate of 41.8 percent.FindingsFindings reveal that “poor quality of services” was rated the most critical risk factor associated with facilities management outsourcing, while “security” and “inexperience” closely followed in that order. Also, there was no significant difference in the rankings of the stakeholders on more than 75 percent of the factors.Research limitations/implicationsMost practitioners would have been left out of the survey due to non‐registration with IFMA due to the seeming novelty of facilities management practice in Nigeria.Originality/valueThis paper provides an unambiguous empirical‐based analysis of outsourcing risks from the perspective of facilities management practice in Nigeria.

Technical Due Diligence: Study of Building Evaluation Practice

Technical due diligence (TDD) as an evaluation of the performance of constructed facilities has become an important new field of practice for consultants. Before the financial crisis started in autumn 2008, TDD represented the fastest growing activity in some consulting companies. TDD is usually carried out for buyers or sellers involved in real estate transactions. It can also be part of mergers, including real estate and other assets, or part of facilities management outsourcing. This paper is based on a case study and an interview survey of companies involved in TDD consulting in Denmark and Italy during 2009. The research identifies the current practice and compares it with the recommended practice in international guidelines. The current practice is very diverse and could, in many cases, be improved by a more structured approach and stricter adherence to international guidelines. However, the investigation of the current practice also identifies examples of value-adding practices, which can give the companies in question competitive advantages by differentiation and/or give input to improvements of the recommended practice guidelines.

Knowledge transfer success factors in IT outsourcing environment

Due to the advancement of technology, organizations depends more and more on information technology in order to stay competitive. Thus, there is an increase of IT outsourcing (ITO) activities especially for a non IT companies. There are many types of IT outsourcing namely complete outsourcing, facility management outsourcing and system integration outsourcing. Many of these outsourcing projects are reported facing with risk due to the technology and market shift when exercising ITO. This include loss of knowledge when the outsourcing consumer (OSC) are left with little or no knowledge on the product developed, implemented and maintained by the outsourcing service provider (OSP). Thus, this paper addresses the importance to protect and ensure the organizational knowledge is transferred and shared throughout the organization in order to stay competitive. In doing so, some influencing factors were identified in the success of knowledge transfer processes (KTP) within the context of ITO environments. Seventeen attributes are proposed based upon the predetermined key factors. The key factors are Knowledge provider (vendor), Knowledge to be transfer, Knowledge Receiver (client) and the Knowledge Infrastructure. In order to validate the framework, data are collected using survey and later statistically analyzed. The refined framework incorporating best practices yielded four key factors with two influencing attributes specified for the first factor, three influencing attribute for the second factor, two attributes for the third factor and six attributes for the fourth factor. This framework can be seen as an integration of several important elements involved in KTP, which need to be considered as an important aspect in facilitating KTP in an ITO environment.

Facilities management outsourcing in the UK: Avoiding ’elephant traps‘ in the legal jungle

The UK has in recent years seen considerable growth of facilities management (FM) outsourcing across a range of industries. This paper considers the legal problems and risks inherent in FM outsourcing. It also suggests ways to facilitate the transactional negotiating process and discusses the methods by which business and legal risks can be fairly apportioned (between the user and the provider), how to ensure good contract management and, importantly, managing risks on contract termination and exit. The paper is relevant to both users and providers in terms of best negotiating practice and risk management. From a legal perspective, both the UK (and the European Union) are more highly regulated jurisdictions for FM deals than are the US and Canadian markets, and this paper focuses on UK (and European) issues. Cross‐border legal issues are also considered.