In January of 2020, Ingrid Fenn, President & CEO of SIREAS, participated in a panel that discussed trends in outsourcing CRE & facilities services. The video below contains an excerpt from that discussion, and the following article summarizes her comments. This is the second installment in the series.
An important concept that is rarely talked about in outsourcing concerns value. Too often, when people talk about outsourcing, they talk about it as if it means just one thing. But if you look at outsourcing in terms of how your organization defines value, then it becomes clear that outsourcing can’t be the same for everyone. Just as value means different things to different organizations, outsourcing – when seen through the lens of value – will mean different things to different organizations.
Potential Sources of Value
When you look at potential sources of value, the one that comes to mind first for many is cost savings. Cost is an important consideration, but it deserves a word of caution. Too great a focus on cost savings can be counterproductive. When a company takes that focus to the extreme and under-invests in their assets, it can degrade the value of those assets, resulting in costly repairs or even more costly business interruptions.
Value Means More Than Cost Savings
Rather than focus exclusively on costs, focus on what is important to you. How does your company define value? It’s not just about savings. It’s not just about targeting the category with the highest spend. Instead, it’s understanding value from the perspective of what it costs balanced against the risk if I don’t make the investment.
So, what other sources of value should you consider? Of course, it will depend on your business model, but some common sources of value include:
- Talent acquisition & retention
- Proximity to customers & prospects
- Portfolio location & composition
Align Your Services Delivery Strategy
Once you have a solid grasp of how your organization defines value, align your service delivery strategy to meet those objectives and create value. This is the context in which you should go to the marketplace to seek service providers who will deliver to your definition of value and can help you meet your objectives.
If you have a particular challenge or strategic initiative you would like to discuss, we invite you to schedule a call.