4 fundamentals to prevent failure of outsourced property contracts

While the number of failed outsourced relationships is getting fewer, failures are getting far more attention in the market than the many successes. Everyone loves a disaster story, right?

Surprisingly, the reasons why outsourced property contracts fail to deliver haven’t changed much.

In our practice working with public and private sector organisations we see the same issues with contracts and relationships occurring.

Whether it’s a new contract or an established relationship that you are looking to renew, the basics remain the same.

Here’s four ways to ensure a successful outsourced relationship.

1. Understand where you are now

Conduct an honest and thorough assessment of your current strengths and weaknesses. Grosvenor has developed an assessment framework, suitable for all corporate real estate, property and facilities management functions, which may assist.

2. Understand what your customers need

Never assume you know what customers want. Take the time to ask them and ensure you engage at multiple levels to understand the strategic and operational issues and how property contributes value to every part of the business.

3. Understand the value that service providers can (and cannot) deliver

Within the context of your business needs, what value can you leverage from external providers? What mix of generalist and specialist do you need? Is it different for different types of property within your portfolio? How will aggregation benefit and where does MIS fit into your service delivery strategy?

And finally…

4. Have a plan

We advocate for a project approach to any review or assessment that may result in change. Understand the key timelines and milestones. Think about communication, engagement and development of a governance model that involves senior management to act as sponsors and advisors.

Planning will help you communicate and assist you greatly in developing the momentum required to affect the changes you want to make.

Is outsourcing still adding value for your organisation?

Identify areas that the next generation of your outsourced contracts need to address if they are to continue to add value.

Transform an average performing property function into a high performing operation

A Functional Assessment Framework: For property, corporate real estate, facilities and asset management.

Ensure you have all aspects of this operating and functional model assessed together to enhance:

  • Client Engagement
  • Organisational Structure
  • People and Capabilities
  • Financial Management
  • Strategy Design and Execution
  • Process and Procedures
  • Service Delivery Model
  • Data and Systems

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