The real estate company was failing to meet facility management efficiency benchmarks and decided to outsource to achieve savings. A sourcing partner was selected through a pilot project. A cross-functional team defined service levels and requirements and reengineered processes. The outsourcing reduced employees and labor costs by 25-30% and non-labor spending by 35%, achieving overall savings of £2.2 million within a year while improving customer satisfaction.

1. case study
Outsourcing - Real Estate Industry
Re-engineering of processes, alignment of people and
technology.
Summary What we found
The facility management of a real estate Utilisation of facility assistance was poor Handheld PCs were used to track work
company was failing to achieve industry and only 30% of call-outs to repairs were outstanding and utilisation of employees.
benchmark efficiency levels. It was closed at the initial visit. The maintenance processes were re-
decided to outsource the facility engineered according to SLAs and match
management as a substantial invest- The employee skill levels were inconsist- of service expectations.
ment was required to achieve the ent and the tracking and reporting of
benchmark efficiency. maintenance requests and completed Employees in the facility management
work was not systematic and consistent function were TUPEed following an
A sourcing partner was selected across all sites. evaluation and training according to skill
through a pilot and a cross functional levels and capacity requirements.
project team was created to implement The budget versus actual of repair;
the outsourcing which included the maintenance; and upgrades was not Spend analysis & benchmark of all
related procurement activities. traceable through reporting systems. categories was carried out and a category
and implementation strategy was
The project team defined; service levels; Spend on consumable and durable developed. Subsequently a small number
developed the contract requirements; materials was decentralised and prices of framework agreements were
and re-defined processes and systems were not optimised. implemented across the country.
as an integrated management system
between the two companies. What we did What we achieved
The benefits included financial savings Following the selection of the outsourcing The number of employees required to
of £2.2 m equivalent to 30% of the cost partner, a pilot was carried out which carry out the facility management was
base, to be delivered within a year. proved that benefit case and service level reduced significantly and the cost of
expectations was feasible. labour was reduced by 25%.
fficiencommon place. A cross organisational project team was Through category management and
e of the projects Cost Base
assembled including representatives from: framework agreements the spend was on Cost
£9.0M
70 target to be reduced by 35%.
• Operations (Process re-engineering)
• 15%
IS (technology for reporting) 30% On top of the £2.2 m financial saving
increase Reduced estimate, end customer satisfaction was
• Procurement (framework
£6.0M
60
Emp. greatly improved due to improved first-
agreements)
Costs contact-repairs and transparency when
• Human Resource (Training and rechargeable work was carried out.
TUPE)
£3.0M
50
• Commercial (contractual
outsourcing) Spend
£0
40
Before After
Boxwood Boxwood
GIC -General Implementation Consultancy
PERFORMANCE IMPROVEMENT, CHANGE MANAGEMENT AND OUTSOURCING