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Deal or no deal

TFM has had mixed reviews in recent years, but it remains a staple part of the FM mix. We bring together an FM integrator, single service supplier, specialist contractor and TFM provider to argue for and against the TFM model

Total facilities management (TFM), where a service provider takes responsibility for the delivery and management of all FM services, has been called into question with warnings that bundling a mix of services into one large service contract could result in a race to the bottom as suppliers vie to win tenders which fail to meet a high level of service.

Yet according to the latest AMA Facilities Management Outsourcing Market Report 2018- 2022 (see References, note 1), TFM continues to appeal to clients as a way to consolidate supply chains and reduce costs. In fact, the report found that new areas such as energy and workspace management are becoming an increasingly common component of many bundled TFM contracts.

The report predicts the greater use of FM providers in a more integrated way, linking FM service provision with company objectives more closely. But as i-FM’s FM Audit report 2019(2) revealed, there is some confusion in the marketplace over exactly what TFM means, and a number of contracts that might have been given that label at one time are often now put into the category of ‘integrated’.

The Integrator is a service delivery model developed by KBR. Mark Sutcliffe, MD of The Integrator, comments: “As the global outsourcing market develops, it is also growing in sophistication and moving from traditional activities into idea generation and innovation. While TFM has distinctive benefits, especially in larger organisations requiring a host of services, its downsides cannot be ignored. As such, it is crucial for an organisation to understand where it is appropriate to use a TFM contract and what the alternatives are.

“TFM, if managed well, offers significant benefits which can leverage an organisation above its competitors. Simplifying the outsourcing process allows an organisation to focus on its core business with the additional benefit of saving money in most cases. Businesses looking to streamline, expand, or focus resources on core developments and innovations can gain significantly through such a contract. A single service contract also helps to standardise compliance and culture. Management information is simplified by cutting down on bureaucracy.

“However, TFM contracts can leave an organisation severely lacking in intelligent client function. Being wholly dependent on a single organisation for all supporting services increases risk. Despite a contract with a single organisation, there is no guarantee that the contractor will actually carry out all of the services promised. A number of TFM providers subcontract aspects of their product out to other companies. As such, there is no direct control over which organisations provide services. A TFM contract, which may have begun as a cost-cutting exercise, may lead instead to lack of oversight and compliance.

“They also preclude highly specialised providers, often in the form of SMEs, able to work closely with the organisation, often sharing knowledge alongside the service. This may mean that hard FM specialisations cannot be delivered at all.

“Previously, organisations have had to balance the benefits of TFM with those of insourcing or using specialist service providers who can work in a close partnership with the company and provide technical expertise. However, the market is rapidly evolving to bring together the benefits of each model.

“The Integrator model offers an additional service which can work alongside any or a mix of traditional outsourcing models. It is designed to sit between the client and supply chain as a single, independent point of information. Insourced and individual or bundled outsourced services can all be incorporated into the supply chain. The Integrator then provides impartial information on supplier performance, estate and assets, finance and cost control, workplace experience, and FM compliance.

“In a period where organisations are undergoing rapid digital transformations, failure to utilise readily available, independent, real-time data is a massive oversight. An intelligent service delivery model can aid in procurement, auditing, and benchmarking of independent suppliers. It also offers an opportunity to agree and deliver broader or higher-level outcomes through its independent management and data-led approach.

“TFM has several benefits that need not come at a trade-off for organisations requiring a simple FM solution. However, where organisations benefit from working with multiple service providers, technology can play a role in streamlining the process. In either case, data-led solutions are required to compete in a crowded marketplace.”

About Sarah OBeirne

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