Protect Your Company From Outsourcing Villains
Protect Yourself From Outsourcing Villians
When the facility managers of DARK CITY needed protect their citizens from outsourcing villains, they turn to the defect crusader “Q-MAN,” Vince Elliott. (The “Q” is for Quality.)
Before the arrival of Q-MAN, the International Facility Management Association (IFMA) took a poll of facilities managers’ opinions on outsourcing, they found that many lived in fear of the outsourcing villains and the risks involved in outsourcing janitorial services.
The fears therefore were well founded and many managers were forced to go back to in-house cleaning services, forgoing the benefits of outsourcing.
Vince “Q-MAN” Elliott spent over 40 years learning the ways of outsourcing and identifying the villain’s weakness in order to combat these fears. There are four tools Q-MAN keeps in his utility belt when faced with these formidable foes:
- The Definer – Defeats ambiguous outcome villainy
- The Measurer – Defeats the failure to measure monsters
- The Manager – Solves management riddles
- The Revealer – Exposes the pitfalls of co-employment
The Outcome Villain wins his battles because managers are not prepared with solid definition of what they want from their outsourcing contract. The joke, as they say, is on you! This villain fools you with false goals and into short-term cost reduction death traps.
Q-MAN, with a flourish of his blue cape, urges managers to set clear goals that define the value needed. Look beyond costs to the quality of the staff and management (required and review resumes of all managers). Understand the systems utilized to deliver the service and dig deeper into the underlying structure of the cleaning program. Do the upfront work. Set expectations with pre-defined goals in mind and you can clearly spot the false games.
Once a contractor is selected that seemed to match your expectations do not fall victim to the Measurement Monster. Despite having clearly defined goals you will fall victim unless you are able to properly measure the outcomes.
Measurement holds contractors accountable for the targets of quality and customer satisfaction defined in your agreement. As much as 22 percent of a company’s revenue can be spent correcting external failures- that is, failures that are seen and brought to the attention of management by customers.
Diligently measuring the level of performance you receive from your provider, and continuing to set higher goals to improve that performance level ensures that your company receives the highest possible value. Be specific about failure, ratings such as“clean” or “dirty” does not cut it. Measure what is not clean, and how it is dirty. Sound complex? It is as simple as noting “dusty shelf” when inspecting.
Riddle me this: What good is measuring performance without the risks or rewards?
You can have precisely defined goals, and you can have a diligent, specific measuring system; however, if there are no risks (costs) or rewards for the contractor you may still fail. A performance-based contract providing mechanisms to manage performance through continuous improvement solves this riddle.
Performance-based contracts are a key weapon of enforcement.A contract with incentives for improved performance and penalties for failure to provide the specified level of performance allows managers control over the level of service received from contractors. Set key targets and pay for exceeding these targets. Make sure to provide management triggers to adjust the targets over-time to ensure continuous improvement.
Co-employment contract arrangements can have benefits; but be aware of the deadly snare of legal entanglement.
The Revealer is a weapon that constantly updates state and federal laws so tax and legal risks, and can be avoided. It is key to understand the gray areas that may constitute co-employment in order to avoid these issues. Some tips to avoid an inadvertent co-employment situation are:
- Terminate “with cause” only.
- Deal with corporations.
- Do not be the provider’s main or only source of income.
- Do not accept risk of loss.
- Do not supply tools or materials.
- Deal with companies that advertise; advertising means the company is active in the market.
Save Your Contract with Smart Outsourcing
An effectively managed outsourcing venture can provide an opportunity for your company to receive increased long-term value and benefit from a capable service provider. Elliott’s RFP advising services can be your superhero in your next outsourcing event.
If you are interested in learning more about how your company could benefit from outsourcing, reach out to us. Let us show you how to be your company’s outsourcing hero!