Clarion Group Offers Insight to Companies About Outsourcing Food Services
Kingston, NH, October 14, 2010 --(PR.com)-- “Outsourcing food services or facilities management services doesn’t mean your problems are over,” warns Tom Mac Dermott, president of Clarion Group, a dining and facilities services consulting firm. “All that a company, college or institution has done is to put an intermediary between management and the work to be performed.”
Most companies, colleges, government agencies, schools, hospitals and other institutions, employ outside contractors to manage non-core functions like employee food service and many functional areas of facilities operations Mac Dermott notes.
“But the contractors will be only as efficient and cost-effective as management requires. This means the facilities or business manager needs to set standards, monitor performance and intervene when the results are unsatisfactory,” he says.
Most food or facilities contractors have a traditional corporate pyramid structure. Typically, the outside contractor assigns an on-site manager to oversee the work it performs, whether food service and catering, conference and event management, janitorial or other facilities services. The manager reports to an area or district manager who, in turn, reports to a regional manager, typically a vice president.
“The bigger the contractor, the more layers there are between you, the client, and the contractor’s top management,” Mac Dermott says. “In a national or international company, senior management may be very remote from local operations. They may not even know you exist.”
“As the client, you have two key areas to monitor: operational performance and financial performance,” he says. “Depending on how the contractor perceives your priorities, you may receive excellent service, but at a very high cost, or low costs and mediocre-to-poor operational performance, for example. You want to make sure your contractor provides the best possible service at the lowest cost consistent with your budget constraints.”
To achieve that ideal balance, the facilities or business manager must monitor the contractor as fully as though the services were being provided by an employed staff – and monitor costs charged to the organization as well, he advises.
“When your on-site manager isn’t producing satisfactory results and the area or district manager isn’t helping, it’s time to go over their heads to the regional manager or, if necessary, higher up in the contractor’s chain of command,” Mac Dermott says. “You have the right to tell the contractor you want a new manager or district manager, if the ones assigned to you aren’t doing the job properly. If there’s no response, or the response is ineffective, maybe it’s time to find another contractor.”
While contractors often call their relationship with clients a “partnership,” in fact their income and profit comes out of your organization’s pocket, he notes. Like all companies, food and facilities contractors need to make a profit and want to increase that profit, year after year. That income and profit comes from two sources: the fees you pay for their services and “indirect income” – surcharges on expenses and rebates or discounts from their vendors.
“You want your contractor to earn a decent profit for the services it performs for you,” Mac Dermott says. “That makes your organization an important client, even if you’re not among the contractor’s largest accounts. But, at a minimum, you want to know what that profit is, and where it comes from. That means requiring full disclosure and reviewing the contractor’s monthly operating statements and invoices as carefully as you do your own internal accounts and questioning costs that seem to be out of line.”
Outsourcing can be a very effective way to manage a wide variety of facilities services, he says. “Contractors are specialists in their fields and can more efficiently provide expertise and resources than an organization can on its own. But you need to know you are receiving the best possible results at a cost that is no higher – and preferably for less – than if you performed the service on your own.”
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About Clarion Group:
Clarion is an independent consulting firm that specializes in dining and facilities services for companies, colleges, government agencies and institutions nationwide. For information, contact:
Tom Mac Dermott, FCSI, President
Clarion Group
PO Box 158, Kingston, NH 03848-0158
Tel: 603/642-8011 E-mail: TWM@clariongp.com
www.clariongp.com
Most companies, colleges, government agencies, schools, hospitals and other institutions, employ outside contractors to manage non-core functions like employee food service and many functional areas of facilities operations Mac Dermott notes.
“But the contractors will be only as efficient and cost-effective as management requires. This means the facilities or business manager needs to set standards, monitor performance and intervene when the results are unsatisfactory,” he says.
Most food or facilities contractors have a traditional corporate pyramid structure. Typically, the outside contractor assigns an on-site manager to oversee the work it performs, whether food service and catering, conference and event management, janitorial or other facilities services. The manager reports to an area or district manager who, in turn, reports to a regional manager, typically a vice president.
“The bigger the contractor, the more layers there are between you, the client, and the contractor’s top management,” Mac Dermott says. “In a national or international company, senior management may be very remote from local operations. They may not even know you exist.”
“As the client, you have two key areas to monitor: operational performance and financial performance,” he says. “Depending on how the contractor perceives your priorities, you may receive excellent service, but at a very high cost, or low costs and mediocre-to-poor operational performance, for example. You want to make sure your contractor provides the best possible service at the lowest cost consistent with your budget constraints.”
To achieve that ideal balance, the facilities or business manager must monitor the contractor as fully as though the services were being provided by an employed staff – and monitor costs charged to the organization as well, he advises.
“When your on-site manager isn’t producing satisfactory results and the area or district manager isn’t helping, it’s time to go over their heads to the regional manager or, if necessary, higher up in the contractor’s chain of command,” Mac Dermott says. “You have the right to tell the contractor you want a new manager or district manager, if the ones assigned to you aren’t doing the job properly. If there’s no response, or the response is ineffective, maybe it’s time to find another contractor.”
While contractors often call their relationship with clients a “partnership,” in fact their income and profit comes out of your organization’s pocket, he notes. Like all companies, food and facilities contractors need to make a profit and want to increase that profit, year after year. That income and profit comes from two sources: the fees you pay for their services and “indirect income” – surcharges on expenses and rebates or discounts from their vendors.
“You want your contractor to earn a decent profit for the services it performs for you,” Mac Dermott says. “That makes your organization an important client, even if you’re not among the contractor’s largest accounts. But, at a minimum, you want to know what that profit is, and where it comes from. That means requiring full disclosure and reviewing the contractor’s monthly operating statements and invoices as carefully as you do your own internal accounts and questioning costs that seem to be out of line.”
Outsourcing can be a very effective way to manage a wide variety of facilities services, he says. “Contractors are specialists in their fields and can more efficiently provide expertise and resources than an organization can on its own. But you need to know you are receiving the best possible results at a cost that is no higher – and preferably for less – than if you performed the service on your own.”
###
About Clarion Group:
Clarion is an independent consulting firm that specializes in dining and facilities services for companies, colleges, government agencies and institutions nationwide. For information, contact:
Tom Mac Dermott, FCSI, President
Clarion Group
PO Box 158, Kingston, NH 03848-0158
Tel: 603/642-8011 E-mail: TWM@clariongp.com
www.clariongp.com
Contact
Clarion Group
Tom Mac Dermott
603-642-8011
www.ClarionGP.com
TWM@clariongp.com
Tom Mac Dermott
603-642-8011
www.ClarionGP.com
TWM@clariongp.com
Contact
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