Eurest Services: Driving down FM costs – Gaétan de L’Hermite
The need to reduce costs has made outsourcing non-core activities such as facilities management an attractive proposition. Gaétan de L'Hermite of Compass Group explains how the key to successful outsourcing lies in rationalising service management in tandem with service delivery.
Many of the world's leading companies, including those from the banking and financial services sector, are in the midst of strategic reviews and global cost-cutting programmes. One of the key decisions to be made along the way concerns the economic viability of in-house support services and the potential value of working with a third party. Gaétan de L'Hermite has been on both sides of the fence; while at Deutsche Bank, he was tasked with the conception and deployment of a €100-million global cost reduction programme in facilities management and support services. Today, as group director of support services at Compass Group, he manages successful client support services, including cleaning, security, reception and mail services, which represent approximately 20% of the group's £15 billion global revenues. Eurest Services is Compass Group's 'go to market' brand for the provision of support services in the workplace.
What cost saving can typically be achieved when outsourcing facilities management?
Gaétan de L'Hermite: Our unique expertise in providing outsourced service solutions combined with insights gathered from our global portfolio of client relationships tell us that organisations are typically looking for the following: the highest quality services to support their business; reduced costs through simplifying and rationalising their existing providers; enhanced control and flexibility through bundling of services and direct ownership of service delivery; greater efficiency and consistency through standardisation and best practice; the highest health, safety and environment standards. Outsourcing of non-core facilities management services can unlock significant efficiencies in organisations. Direct savings come from the re-engineering of the service delivery model and the introduction of best practices from market-leading experts. This would typically enable a realignment of the service levels with the actual business needs, a reliance on more flexible resources and the introduction of a common operating platform with bespoke management tools.
Indirect savings include a reduction of internal management time and effort in addition to a transfer of operational risks to the outsourcer. Finally, the introduction of performance-based or fixed pricing can create sound financial certainty around the savings delivered. We would typically expect a first-generation outsourcing contract to deliver significant savings.
What type of outsourcing service provider is best equipped to ensure costs are kept under control?
The critical success factor with outsourcing facilities management services is to enable a complete re-engineering of both the service delivery and the service management model. Outsourcing all facilities services to a large number of specialised service providers without rationalising the in-house service management organisation could result in an over-complex solution where service management ownership is diluted and overall cost is uncompetitive. That is the reason why Eurest Services would typically recommend bundling services together under a single management platform in order to deliver economies of scale and performance consistency.
Eurest Services has robust service management expertise and a strong operational delivery capability allowing it to create the ideal turnkey solution for a successful outsourcing project. A typical managing agent model recommended by FM integrators would not systematically offer a best-in-class option to keep cost under control; this is because it would create a tiered structure with a managing agent and a number of service providers all realising a margin and imposing a management element to their delivery, creating overlaps and redundancies, which push the price up. A bundled solution with a single service provider typically offers a clear, robust and efficient model that delivers cost transparency and certainty.
How can employees from the FM service provider help unlock savings for clients?
The success of outsourcing lies in the relevance of the service solution developed by the FM service partner. This is achieved through strong partnership and a clear understanding of what the primary project objectives are. Eurest Services has created the Compass Service Framework (CSF), a truly global operating platform that gives our employees across the world access to a single repository of our best practices and key benchmarks across all services.
In parallel we have created communities of practice experts for each of our service lines in order to accelerate knowledge sharing and stimulate innovation across the entire group. These communities are the primary contributors to the CSF.