Quick Savings AND Minimal Operations Risk? Try Facilities Management Outsourcing  |  February 5, 2009  

Looking under rocks to find near-term cost savings in 2009?

Most companies today are thoroughly examining new areas of cost structure improvement in various areas. Although the spending is often widely distributed and not easily visible to the CFO, facilities management spend in most companies is much greater than IT spending.

First generation facilities management outsourcing projects are reliably returning a net 10 to 15% savings on facilities operations and maintenance, while at the same time bringing new transparency to this area of spend.

Even more attractive is that facilities management outsourcing projects are quick to execute, with little or no new capital investment. Projects usually return guaranteed savings in the first year of the new contract. Many of these areas are already outsourced, making them transparent to much of the organization.

The benefits are significant:

1.    Typical annual savings of 12% to 20% (total spend) can be achieved within 3 years
2.    Guaranteed savings of 4% to 8% can be achieved in the FIRST year
3.    There is virtually NO transition costs or capital expenditure borne by the client
4.    The actual work is not relocated, so there are often no redundancies
5.    Many processes have already been outsourced, so there is not a fundamental shift in the operating model 

Peter Allen, Partner and Managing Director, TPI.
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