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In-House Facility Management - What to consider.

Updated: Jul 19, 2023

Deploying your organizations resources to cater directly for facility management needs comes with careful considerations of some factors like financial, human resources, core business strategy and overall size and scope of your facility.


RP Facilities Limited inhouse and outsource facility management option

In my over-a-decade experience in real estate and facility management services, I have noticed, as an entrepreneur in Nigeria, that many small and medium sized organizations tend to have an inhouse facility management for cost-saving reasons. This is quite understandable but also can be a blunder as trying to keep an eye on the facility management may constitute a huge distraction for the entrepreneur or business owner.


On the other hand, large corporations with complex facility management scope and size oftentimes prefers to outsource their facility management services to third party facilities management company. This may provide short term disadvantages like mismatch of culture or quality service but guarantees long term benefits when they try to blend the process and integrate the external facility management company into their work ethics, culture, and internal processes.


Here are 5 vital questions organizations must consider before deciding whether to have an inhouse facility management or outsource or have an hybrid – a combination of inhouse and outsourcing model.


1. What is your organizations primary goals, culture and strategy?

One of the benefits of outsourcing facility management services is to allow organizations maximum focus on its core business. Deciding to keep your facility management inhouse would be premise on the degree it affects your core business objectives. Organizations, especially smaller organizations, with less facility management services needs may consider keeping their FM inhouse. There is no point hiring a big sized FM company to manage your few FM needs. The cost may outweigh its benefits.


2. Is your facility management a standalone department or a unit/separate function under a department head?

When you choose to house your facility management professionals, it is a great deal to consider where they feature in your decision-making echelon. As we know it, some key functions in an organization may suffocate if they are wrongly attached in the organogram. The question you want to ask yourself is, where in your organogram can best give your organization the most ROI on your facility manager and facilities management team. Make sure they have the right amount of voice that would match your expectations to justify why you set up the function/unit in the first place.


3. Where is your Facility management unit/department located? Is it at your HQ or where you have the most need of it?


For many multinationals, it is common practice to centralize some key roles at the HQ for consistency and standardization of policies, strategies and processes. One of facility management’s key functions is legal and regulatory compliance which is usually industry or locally stipulated. This requires management to embrace the idea of “thinking globally and acting locally”. For best results, you might want to have an onsite inhouse facility manager who will interface more directly with your facility on a day-to-day operational basis. This inhouse facility manager expert will be your local policy implementer at the branch or regional office(s).


4. What is the competence and experience level of your facility management team?


Whilst it is easier for large corporations to attract and retain well trained and experienced facility manager, smaller organisation often struggles with the cost of recruitment, attracting and training experts in the facilities management field. The challenges even become tougher when they have to build a formidable team to cater for complex or highly specialized facility management needs. There are ever changing technological advancement which sometimes quickly outdates our ways of doing things, this often increases our cost of training and deployment of technologies. Business leaders must know when to retain inhouse facility management or give it up and engage an external FM company to address the complex facilities management requirement of their business.


5. What is the cost, scope and size of your organization’s facility management needs?

A decision to have an inhouse facility management comes with a series of steps taken by management to determine the best option or course of action to meet their facility Management needs. In doing this, they usually consider the cost benefit analysis, the scope or scale of the facility management service required and the facility size.

In conclusion, Sullivan 2015, argues that the decision to outsource or in-source the facility management service comes down to competence, quality and cost. There is however no standard rule as to how organizations should respond to these facility management needs.


Advantages and Disadvantages of in-sourcing (Inhouse facility management) and outsourced facility management services.




In-house

Outsource

​Advantages

  1. ​Staff own their work

  2. Favors Long -term financial analysis

  3. Improves employee and customer satisfaction (Wise, 2007)

  1. Saves costs

  2. Expand services and expertise

  3. Improves employee productivity and morale

  4. Greater potential towards sharpening corporate image

  5. It brings in a business-like approach

  6. Introduces new ideas, technology and new findings which may result in innovation

  7. Best suitable for estate owners, homeowners’ associations, residential/tenant associations or estate association.

​Disadvantages

  1. Poorly defined scope often lead to management problem and lowering customer satisfaction

  2. Measuring performance of inhouse staff may be biased

  3. Threat of complacency which can lead to loss of value

  4. Inability to attract experienced and competent experts especially for small organizations (Atkin and Brooks, 2005)

  1. Lack of Flexibility

  2. Variance in work ethics

  3. Inadequate or unclear performance measures

  4. May cost more


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