From the Editor: Fight Data with Data
WHEN FACILITIES management companies stop in to chat with your senior management, the words most likely to drop from their mouths at least a dozen times are "cost savings." They know these VPs and administrators will lean forward eagerly each time, excited to be the hero that saves their organization big bucks.
To survive, in-plants must cast doubt on the accuracy of those words by gathering real cost data—along with a list of costs the FM conveniently forgot to mention.
I read this advice in a report published by the In-Plant Printing and Mailing Association, called "Facility Management Strategies: Fact vs. Fiction." In it, several people with experience in FM matters offered their advice.
Consultant Howie Fenton, who's worked with numerous in-plants, urged managers to fight data with data. For example, the FM's prices generally don't include rush charges, taxes or delivery costs. You must point this out. Extra charges for repairing client files as well as rent charges are rarely factored in either. Make note of this as well.
Fenton recommends managers spend time studying the outside provider's cost structure. Will there be delays because they must wait for enough work to gang up for batch orders? Are rush jobs penalized? Are transportation costs tacked onto job charges? And most importantly, how can cost savings be monitored?
This last point was reiterated by others in the IPMA report.
"Outsourcing any operation requires continual oversight and monitoring to ensure service levels and quality standards are met," wrote Carol Rouzpay, director of member operations for Regence. "The cost of this function is often overlooked...and often negates any operational savings."
That's something your upper management probably didn't think about.
Rouzpay went on to point out that once the FM has your business, prices can increase at contract renewal—something the FM is probably not emphasizing in its proposal.
In the IPMA report, Consultant Ed Daniel noted that in-plants should send bulleted reports to upper management at least once a year showing their financial contribution, their progress on the strategic plan and their involvement in corporate goals, complete with testimonials.
"If an in-plant knows its costs, strategic contribution, service levels, etc., the outsourcer will be reduced to a vendor bidding for the work rather than being viewed as a consultant performing an analysis," Daniel noted. "If the in-plant has benchmarked fairly and honestly [and] built relationships that provide an integrated service in the organization, the outsourcer, in most cases, will not be able to provide the same service for a comparable cost."
These and other experts in the IPMA report provide some solid advice to help in-plants fight back against FMs and prove the value of their operations.
Bob has served as editor of In-plant Impressions since October of 1994. Prior to that he served for three years as managing editor of Printing Impressions, a commercial printing publication. Mr. Neubauer is very active in the U.S. in-plant industry. He attends all the major in-plant conferences and has visited nearly 170 in-plant operations around the world. He has given presentations to numerous in-plant groups in the U.S., Canada and Australia, including the Association of College and University Printers and the In-plant Printing and Mailing Association. He also coordinates the annual In-Print contest, co-sponsored by IPMA and In-plant Impressions.