Evaluating Facilities Outsourcing Options

“With everything going on in the world today, one of the big topics of discussion for facilities leaders right now is evaluating outsourcing,” said Brian Reyes, SVP of Higher Education for C&W Services, as he kicked off an informative session on outsourcing at HEFFv 2.0. 

“What are the options? What are the key drivers? Why would you outsource, and what do you outsource? Who are the stakeholders, and how do you engage them? What are barriers you might run into, and how do you look to overcome them? What are some success stories, and what didn't work so well?” 

In a discussion led by Reyes, Nicolle Taylor, Chief Business Officer at Pepperdine University, and Dave Irvin, AVC for Facilities at Florida State University, answered these most pertinent questions to consider when evaluating outsourcing options, and also shared their own advice and best practices for successful partnerships.

Identifying Key Drivers

While reducing costs may frequently be a catalyst for the outsourcing conversation, Taylor and Irvin both emphasized that cost shouldn't be the primary driver.

"I think outsourcing always begins with a conversation about how to lower costs, and I actually think that is the last thing that ought to be on your list," Taylor said. "That's something that, in my experience, has typically been a byproduct of outsourcing."

Instead, they offered some ideas on what purposes the outsourcing partnership should be serving: 

• Freeing up personnel resources.
• Taking advantage of a third party that has expertise beyond your own in-house capabilities.
• Managing a remote campus that is difficult to access from the main campus.
• Staffing up and down as needs for certain services, such as custodial services in a COVID environment, increase and decrease sporadically.
• Managing an area that has some risk management issues or training issues.

Whatever the key driver ultimately is, it's critical that the move is strategic and not solely motivated by a desire to drive down costs.

"Any time you're looking at outsourcing, it needs to be part of a broader conversation of how best to serve the mission of the university," Irvin said. "What is the core mission of facilities? What are the things that are critical to your campus? That’s where you need to put your manpower, your labor, and your resources."

Engaging Stakeholders

One of the best ways to have successful outsourcing is to have the support of your stakeholders before you start. The broader you can make that congregation of stakeholders and the earlier you start having those conversations, the better, both Taylor and Irvin agreed.

Florida State University

There are the obvious stakeholders like facilities, design, construction, finance, and the board, but there are also less-obvious stakeholders, too – professors with certain needs that are affected by facilities, athletics, IT, housing, president's life – all of these groups have hands-on relationships with facilities staff."They need to understand how the services that you may potentially outsource impacts their operations or the success of their areas," said Taylor. "They need to see that you are not diminishing the importance of the service by outsourcing, but that you're trying to do something strategic for the university."

It’s best to cast a wide net in the very beginning to get as much input as possible from as many stakeholders as possible. Once that is done, the decision-making process needs to be narrowed down so that it is effective and efficient, but it still needs to be communicated to the broader stakeholder community, including – especially, even – facilities staff."HR and the general counsel's office will be good partners as well, as they help structure an arrangement that can be beneficial in those particular areas, making sure from a personnel standpoint that you're well-positioned to move forward," Taylor added.

Pepperdine University

"They need to understand what's going to happen, and you need to make sure you're doing this in a humane and comprehensive way, because that's what we do in higher ed: we don’t just throw people aside," said Irvin.

Advice for Best Outcomes

There are many different strategies to ensure a successful outsourcing partnership, but first and foremost it is integral to understand that outsourcing doesn't mean offloading.

"What you're really doing is not outsourcing the management of a service; you're outsourcing the performance of it," said Taylor. "You've got to have someone that is on your staff who is able to articulate the leadership, the culture, the expectations, and manage the service that is done with an outside partner."

In order to make the most of your outsourcing partnerships, here are some things to consider:

• From the beginning have a firm understanding of what your needs are by using tools like Sightlines that help you understand your own data.
• Try benchmarking some "aspirational" schools for comparison.
• Clearly define your expectations, from level of service to scheduling, in the RFP process.
• Utilize APPA standards to help define those expectations and the scope of work.
• Have potential outsourcing partners visit your campus, specifically those within the company responsible for managing the work on the campus – there is a big difference between seeing the scope of work on paper versus seeing it in person.
• Be sure to articulate your culture and mission to the vendor partner, and set the expectation that they understand and integrate into it.

Once the proposals are submitted, be sure to:

• Thoroughly examine proposal responses to make sure that vendors are considering all the things that could affect pricing, service, and delivery, such as changing labor costs and rising minimum wages.

And once an outsourcing partnership has been established, it is critical to have regular follow-up.

• Have benchmarks and matrices of how you're evaluating the performance of the contract and delivery of services.
• Schedule regular meetings with your partners to review expectations and benchmarks.
• Utilize tools like Sightlines criteria to help in shaping these benchmarks.

Regardless of what decision you make, Taylor and Irvin both recommend using this opportunity to initiate conversations with your own teams based on the same benchmarks and data you used to evaluate outsourcing partners.

• Have your in-house team think about what would they put together if they were a company bidding against other vendors, in effect bidding as another company.
• Conduct an internal evaluation to make sure that your costs, procedures, and best practices are in line with what outside vendors were considering.

Irvin recalled a time when he did exactly that at another university for plant operations, and ultimately decided to stay with the in-house team.

"The whole process worked well because it really helped us define what we need to do in-house and ensure we were using best practices," he said. "It helped us do a better job of aligning ourselves with our university."

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What are some other reasons campuses are seeking outsourcing partnerships? Read more from C&W Services here.