A good deal is a good deal

Integrated service solutions create cost savings, professional services development, greater efficiency and a retained focus on core business. This is something private enterprise and industry has understood and is utilizing. So why is the public sector allegedly lagging behind, and is this really the case?

Stefan Karlsson, Senior Manager at PwC− First and foremost, you've got to remember that the public sector is the collective term for a raft of different activities controlled by politically composed organizations and financed with public funds. This extends right from central government bodies and corporations to county councils and municipalities, says Stefan Karlsson, Senior Manager at PwC.

To get an idea of the scale of the public sector, Swedish local government organization SKL values the public market at some SEK 820 billion, including the over 2,000 publicly owned corporations' procurement, which is somewhere around SEK 300 billion. Of the 100 corporations with the highest sales on the public market, some are facilities management providers. In total, the public sector buys cleaning and other services for some SEK 8 billion every year.

− So the public sector isn't a novice purchaser of individual FM services, but uncertainty and a lack of experience combined with formal legislated standards in public tendering are contributors continuing to drive operations in-house. Although representatives of public operations understand that you can cut costs and increase efficiency and quality if outsourcing is correctly executed, continues Stefan.

Leif Arvered, Business Unit President at Coor,Leif Arvered, Business Unit President at Coor, who is responsible for several of Coor's accounts with government corporations and county councils, agrees and thinks that more of them need to develop their role as clients.

− The customer must have a competent client, who can create a set of clear standards and needs and convey his expectations. In addition, you've got to think of function ahead of frequency, which means ordering a clean toilet instead of cleaning of the toilet five times a day, adds Leif.

Even if progress is slow, Leif still thinks there's a growing interest in IFM solutions in the public sector too. This is apparent Nordic wide, but especially in Sweden and Denmark. Leif thinks the reason is that the benefits of conducting integrated services is so great. Know-how and competence from other projects generates effective solutions, and the combination of local synergies and higher volumes results in lower pricing.

− Another benefit of integrated services is the flexibility the customer gets. I also think there are big benefits for a client in having just one contract counterparty to negotiate with. If they've chosen to purchase individual FM services, they've all got to negotiate with different suppliers, continues Leif.

Coor's agreement with Östergötland County Council includes four major service segments where it delivers a number of care-related services in the cities of Norrköping and Linköping. Leif thinks that apart from a competent client organization, one of the success factors of this agreement is a good structure for communication, with strategic, tactical and operational meetings, developed with the customer.

− We produced a strategic account plan for the customer, where the customer states its expectations and we set up activities to realize the goals set. First and foremost, we try to free up time to care. Care staff are trained to care, and not to pick up inventories, take patients here and there, make food or clean. Those are the services we're taking over.

Ringhals nuclear power plant and Coor have had a long and successful collaboration. At Ringhals, safety is the top priority and its primary mission is to produce and deliver electrical power.

− Our assignment requires high standards in all our competences, but also that we are skilled in communicating, understanding needs and following up our delivery. A shared view of our shared goals.

Obviously, it's desirable to have as few production disruptions as possible, but four times each year, inspections are conducted at the plant, one maintenance period per reactor. Operations then close down for four weeks for maintenance and cleaning.

− During the inspections, we have 300-400 staff on site to do this work in a planned and safe way. It's a long process, about four weeks, before new staff get access to the Ringhals site. So we've got to plan minutely and communicate constantly," continues Leif, "working in a nuclear power station means that all our staff have to comply with a lot of rules and regulations and put safety first.

The Swedish Transport Administration is another major public sector customer, where Coor has maintained 200 railway stations from central Sweden down to Scania in the south over the past five years. The collaboration has been upscaled and a new contract has been signed involving Coor delivering soft FM to all the administration's offices in over 57 locations in the country.

− I don't notice any major difference compared to the private sector in the contracts we've got with public sector corporations or bodies. You get the same questions and are looking for efficiency and progress with high quality as your goal. You want development plans and set key performance indicators to measure your effectiveness, adds Leif.

Even if the attitude to outsourcing and IFM services is positive, the truth is that you're limited by it different legal requirements. Legislation is there to protect people, the authorities and suppliers.

However, Stefan Karlsson is also noting increased interest from municipalities in tendering for integrated services.
- The municipalities are refining their methods to cope with legislation and regulatory systems, and they're sharing experiences. In addition, there are lots of people in the public sector and other organizations who are addressing extensive criticism at awkward regulatory structures per se and how they're applied. Their criticisms are based on competition for assignments being limited to large corporations, and local government organization SKL has issued a warning about legal complications becoming counter-productive and obstructing business. The Government and Swedish Competition Authorities assert that often, these problems depend on tendering not being sufficiently prioritized by local government.

Leif has also noted that the public sector is also gaining assistance from external consultants when tendering for more complex services.

− Because there's great uncertainty in the sector, we are careful to highlight good examples of work and how we've helped each other. Good references can eliminate some of the indecisiveness.

Previous articles published on IFM solutions:

Mature customers seeing the big pictureService in your DNA

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If you're curious about the benefits IFM solutions can bring, please contact Sofia Johansson +48 9 553 950 00, sofia.johansson@coor.com.