WHY OUTSOURCING FACILITIES MANAGEMENT IN HIGHER EDUCATION MAKES SENSE

The question of whether or not to outsource Facilities Management at institutions of Higher Education has long been a hot-button topic of debate. Traditionally, colleges and universities have kept all of their FM in-house, hiring full-time employees to manage on-campus operations like food services, groundskeeping, janitorial services and security. Today, though, it seems that this tide is changing. An increasing number of educational institutions are now choosing to bring in contracted professionals who specialize in a given field to handle specific functions, instead of delegating a battery of varied responsibilities to one group of full-time university employees.

On its face, there are a number of reasons why outsourcing operations on college and university campuses makes both financial and practical sense. As Michael Christensen, assistant vice president of Risk Management Services at California State University, Sacramento, said in a 2006 interview with Julie Sturgeon for UniversityBusiness.com, “As a risk manager, if it reduces your possible liabilities, it’s a good strategy.” Hiring specialized contractors who have industry-specific knowledge and skills creates an academic environment in which every employee on campus – professor or otherwise – is an expert in her field. This significantly decreases the institution’s potential for risk, which is undeniably preferable in a world where one lawsuit can destroy a school’s reputation, and often, its financial health, too.

Furthermore, at a time when sophisticated analytics systems can be used to collect and analyze real-time data about an institution’s operations, it’s become much easier for FM administrators to identify gaps in service that have never been readily apparent before. For the first time in history, it is now possible for administrators to use real, timely data about the efficiency, cost and productivity of their institution’s operations to make informed decisions about how to improve them. More often than not, data analysis of this kind tends to reveal valuable information about where an institution is wasting time and money, which then makes it much easier for administrators to appropriately redirect their institution’s cash flow as necessary. Interestingly, an increasing number of schools are reporting that using their freed up finances to contract outside vendors for operational functions has actually resulted in the improvement of their bottom lines. This can likely be attributed to the fact that specialized organizations whose employees only perform one function have much more extensive knowledge about the best way to execute that function. An example: if a school were to outsource the management of their on-campus bookstore to a company that deals solely with the operations of campus bookstores, they would be gaining access to industry-specific knowledge about how to maximize their bookstore’s revenue (how to price textbooks competitively, what branded paraphernalia should be displayed in the front window, etc.) that the school would otherwise never have had access to.

Ultimately, this last point gets to the heart of the issue of whether or not to outsource facilities management. As Sturgeon said in her aforementioned article for University Business, “facilities management simply isn’t a college’s core business – or the task [at hand] is complicated, changing often – and officials can’t leverage their internal economies of scale to keep up.” By outsourcing an institution’s FM functions to vendors with expertise in each field, Facilities Managers can not only save their institution money, but also focus their efforts on big-picture managerial projects, instead of having to worry about putting out small fires that should never have been set in the first place.