Supplier and the Client relationship

Through my involvement in the Peer to Peer Club, which is a unique and exclusive club where member FM Peers vigorously discuss their views on a wide range of topics in a confidential environment, it became obvious that no matter what the topic there is an underlying lack of trust and confidence between the supplier and the client with few examples to the contrary.

When all the arguments are stripped back to the raw basics, the four corners of discontent appear:

– From the suppliers perspective, they argue:

  • Corner 1 – Poor Procurement. The procurement process drives their behaviours in the wrong way. Often this statement is directed at the use of “reverse auction” and commodity procurement processes; that the contract set up by the client decides whether or not they are outsourced or out tasked, not the supplier.
  • Corner 2 – Management. That the clients management structure, capabilities, activities and governance processes are not aligned to the model of delivery they have contracted and that this creates a schizophrenic relationship that is not governable by the contract that is supposed to underpin and guide the relationship.

– From the clients perspective, they argue:

  • Corner 3 – Cavalier bidding. Where the supplier knowingly bids below a safe level to secure the contract, but has no intention of maintaining that price, or will reduce to the service level in order to rebalance their books.
  • Corner 4 – Miss trading. Where the supplier knowingly manipulates their data in order to present a higher level of performance than is real, or to hide where additional commercial value from the contract is being extracted than was intended in the spirit of the contract.

For sure, business as a whole considers FM to be a cost centre and generally does not consider FM as strategic, but if we do not evolve out of this current situation, how long will it be before FM is forced into a cultural regression? Already, financially it is clear that moving from an outsourced, to an out tasked model in FM reduces costs by 3-5%.

– Neil Longley, Facilities Management Consultant

Posted in Thought Leadership