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RETAINING SERVICES
Customer Service
IN-HOUSE VS
OUTSOURCING
___________________ ___________________
Attributes of Service
___________________ Practice Point 3.1: A Helping Hand ___________________
___________________ “The Organization needs to have a helpdesk or
central coordination point if it is to deal ___________________
___________________ ___________________
1. Customer service effectively with customer inquiries about
facilities and related services.”
2. Uniqueness of service

3. Priority, flexibility and speed of response ___________________ ___________________


4. Management implications and indirect cost

5. Direct cost
___________________ ___________________
6. Control ___________________ ___________________
___________________ ___________________
___________________ ___________________
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Customer Service Uniqueness of Service

___________________ Generally, issues can include:


___________________
Soft measures might include:

1. A courteous and responsive


___________________ 1. The number of external service providers ___________________
2. Call-back to the customer ___________________ 2. Location of the service provider
___________________
___________________ ___________________
3. Cost of, or premium charged for the service
3. Adoption of performance measures for
courtesy, response, presentation and 4. Average delivery time, i.e. waiting time and

___________________ ___________________
tidiness time for undertaking the service

5. Level of specification needed to place orders

___________________ ___________________
___________________ ___________________
___________________ ___________________
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Priority, Flexibility, and Speed of Response Priority, Flexibility, and Speed of Response

A risk assessment should be undertaken for


___________________ ___________________
___________________ ___________________
high-priority services. This can be Table 3.1 Risk Scores
undertaken as follows: Probability Chance of Score Consequence Score
Occurrence

1. Identify all sources of risk

2. Undertake a preliminary analysis


___________________ Improbable
Unlikely
10 %
25%
1
2
Insignificant
Marginal
1
2
___________________
3. Examine these high-priority risks ___________________ As Likely
as not
50% 3 Serious 3
___________________
___________________ ___________________
Probable 75% 4 Critical 4
4. Analyze all risks to predict the most likely Highly 90% 5 Catastrophic 5
outcome Probable

___________________ ___________________
___________________ ___________________
___________________ ___________________
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Priority, Flexibility, and Speed of Response Management Implications and Indirect Cost

___________________ ___________________
___________________ ___________________
___________________ ___________________
5. Investigate alternative courses of
action
The decision to outsource or provide services

___________________ ___________________
6. Choose the course of action deemed
in-house must take into account both the
necessary to hold, avoid, reduce,
capability of service providers and the
transfer or share risks, as appropriate
effort required to manage them.
7. Allocate responsibility for managing
risks - these should be placed with
___________________ Organizations need to consider their
___________________
those best able to manage them
___________________ approach to this new management role
carefully. ___________________
___________________ ___________________
___________________ ___________________
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Overview of Options and Implications


Direct Cost

By way of contrast, direct cost is easier to


___________________ Table 3.2 Illustration of Options and their Implications ___________________
___________________ ___________________
Attributes of Special Managing Managing Off the

In House

Budget

Total FM
Service Of Company Agent Contractor shelf/
ascertain than indirect cost. Importance to / Agency
the Business
Organization Unit

___________________ ___________________
In the case of an outsourced service, the
contract sum is a clear figure that is Customer + + ++ + + + -
readily available. Service +

___________________ ___________________
Uniqueness - + + + + + -
For in-house provision, the direct cost of Service
calculation would include employees' Priority, + + ++ ++ + + ++

___________________ ___________________
salaries and benefits. Flexibility, + +
Speed of
Response

___________________ ___________________
Management - + + + + + -
Implications + +
/ Indirect

___________________ ___________________
Cost
Direct Cost + - - - - - -
+ ++ ++ + + - +

___________________ ___________________
Control
+ +

___________________ ___________________
*****(+) likely to be satisfied
(++) most likely to be satisfied
(-) unlikely to be satisfied

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Control Table 3.3 Definition of Options

___________________ ___________________
In- house The retention of the organization’s employees
for the delivery of estates- related and facility
services

___________________ ___________________
Special company/ The reconstitution of the in- house team into
The level of control that can be achieved is Business Unit an independent company, with the objective of
closely correlated with the method of expanding its business by gaining contracts
procurement and the contractual from other clients.
relationship established between the
organization and the service provider. ___________________ Managing Agent The appointment of a specialist to act as a
client representative. This person or
organization is then responsible for arranging
___________________
___________________ ___________________
appointments of service providers.
For more control, a partnering arrangement Managing The appointment of an organization to manage
may be appropriate. contractor all service providers as though part of one large

___________________ ___________________
organization. The contractor is paid a fee for
providing this service, usually as a percentage
of the value of the expenditure managed.

___________________ ___________________
Managed Budget A variation on the managing contractor, where
a contractor takes responsibility for the
payment of all suppliers and provides a
consolidated invoice at the end of each month.

___________________ ___________________
The contractor’s fee is related to the
contractor’s own resources as deployed.
Total Facilities The responsibility for providing services and for

___________________ ___________________
Management (total generally managing the facilities is placed in
FM) the hands of a single organization.
Off the shelf/ The contractual employment of personnel

___________________ ___________________
Agency through a specialist or general recruitment
agency. Agencies provide variable standards of
selection enterprise, personnel support and
training and customer support.

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Market Testing

___________________
___________________
Going to the market should be an honest
attempt at establishing the attraction or
___________________
otherwise of outsourcing. Appropriate use
of the market would include regular
comparisons of current prices and rates.
___________________
A judgment can be made as to whether
or not a preferred option is the most
appropriate
___________________
It is the performance of the service provider
that should be reviewed on an annual
___________________
basis.
___________________
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Other Implications of Outsourcing

___________________
___________________
How will the contracts be let?

What might make sense for the organization


___________________
might not prove attractive to service
providers ___________________
The organization will need to consider
whether this should be undertaken for a
fee or on the basis of service performance.
___________________
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