In-House vs. Outsourcing Facility Management: Airport

Background and Problem StatementOne of the most important scopes of any given business is to grow and make profit. At the heart of this scope is the concept of facility management. The term Facility Management (FM) refers to all steps taken to improve the performance of an inbuilt environment in any given business by combining numerous managerial activities. Recently, FM is recognized as an integrated method of operating, improving, and maintaining the foundation and infrastructure of an organization, with the aim of ensuring that the environment is in line with the core objectives of the host organization (Nutt 2004). Technology plays a key role in ensuring that the main goal of FM is achieved. The concept of FM has found wide application in various industries but the field of aviation has been the biggest beneficiary of the optimizing effects of FM. For instance, in airports, managerial duties are categorized into five distinct but interrelated areas: information management, civil services, building and property management, legal services, and procurement and logistics management. Airports can thus employ the concept of FM to aid in planning as well as acting as a coordinating unit, with the aim of ensuring the organizational objects are attained successful and all operations are optimized (van Wagenberg 2011). The capacity of FM to translate individual and organizational needs of an airport into a flexible and balanced supply of integrated services within the business is one of the positive outcomes of the FM strategy.

Progressively, the primary aims of organizations are compelled, or strongly advised, to incorporate environmental obligations. With regards to FM providing an environment where organizations such as airports can accomplish their main as well as auxiliary functions, it is probable that FM will have to be tuned to embrace sustainably oriented processes and energy management as well. The move involves changing some strategic aspects and would include the consolidation of many personnel and resources to redesign the amenities to appease and appeal to the customers and the systems in which organizations such as airports operate (Edum-Fotwe 2001; Nutt 2004).

Airports everywhere present a real risk in the field of FM due to their broad scope and diverse nature (Pitt 2001). An airport in this context is, therefore, an operational system, consisting of personnel, infrastructure, equipment systems, facilities, and which provides services to customers (Vreedenburgh 1999). The airport is a processing facility for travelers, luggage and cargo and a service bay to aircrafts (Vreedenburgh 1999). In relation to the concept of FM in general, Airport facilities management (AFM) are somewhat difficult to define due to their diversity. Usually, AFM comprises of two functions namely: aeronautical services and non-aeronautical services (Brown and Pitt 2001). The aeronautical services are comprehensive and range from ground services to air traffic management and runways. On the other hand, non-aeronautical services provide even more challenges. Therefore, FM necessitates excellent knowledge and skills to deliver this for the airports functionality (Pitt 2001). The proficiency of AFM impacts the airports performance significantly, as it influences the financial performance, safety, and customer satisfaction (Vreedenburgh 1999). Generally, facility management services may be accomplished efficiently or delivered by hiring in-house or outsourcing approach. The selection will depend on the priority of the activities or functions of the organization.

Airport managers have a key responsibility in developing an establishments Building Management Plan (Warren 2010). Hence, there is a requirement for any criteria or framework for effective decision making to choose between outsourcing and in-house FM approach. Therefore, this report expects to fulfill the research gap that exists in the identification the potential advantages and disadvantages of airports in retaining in-house or outsourcing Facility Management Services.

Key Trends in Airport Facility Management Globally

Improving Customer Navigation through the Airport

Customer satisfaction depends on the facilities they encounter and quality of service in the airport. Airport managers ensure that passenger experience of the airport exceeds expectations (Wagenberg 2011). From trolley management and information desks, to VIP services and executive airport lounge management, its the staffs responsibility to make the customers experience a memorable one.

Airport Terminal Cleaning

With large numbers of passengers passing all through the day, the cleaning system in an airport terminal needs to be quick, reliable, and responsive. The cleaning personnel delivers hands-on, high quality cleaning services ensuring the travelers an optimistic experience on departure as well as arrival (Warren 2010). Airports must provide admirable hygiene and washroom services. Footfall monitor technology, for instance, records visits made to the washroom, and alerts an operative via an online portal to attend and clean the washroom.

Airport Facilities Management Support Services

Be it be airport terminal cleaning, grounds maintenance, airport security, car park management, passenger assistance, and other support services. Efficiency is essential so managers and airport workers utilize Computer Aided Facilities Management (CAFM) technology to enhance service delivery around the airport (Nutt 2004). Real time information facilitates effective planning and scheduling of resources.

Classification of FM Services

Facility management services involve three main functions: strategic FM, managerial FM, and operational FM. Strategic FM entails the receptiveness of the facility to the airport and its challenges. However, Managerial FM emphasizes the administrative and organizational procedures. Finally, the scope of operational FM encompasses all types of routine services at the airport (Warren 2010). It is also concerned with the efficiency of service delivery in the airport. Nonetheless, levels of services start out simple, then morph into complex processes that are more difficult to implement. Therefore, it is safe to say that the three categories of FM activities can be performed efficiently with various facilities management approaches best suited for an airport FM functions.

Approaches to Facilities Management

Facility management services may be successfully provided or performed either by outsourcing or retaining in-house. According to Wyndham (2018), these approaches are put into consideration depending on the services offered by the airport or priority of the activities. Cost, expertise, and flexibility are the three vital factors to consider before choosing between in-house hiring and outsourcing.

In-house Service Provisions

Retaining in-house describes a method whereby a dedicated unit directly hired by the client company provides specific services. Control of performance and monitoring of activities is applied under the employer/employee contract although regulatory mechanisms may be employed through internal service-level agreements (Atkin and Brooks 2009). Retention of the airport employees for service delivery is considered in-house provision (Atkin and Brooks 2009). This type of method exhibits the following characteristics:

Direct hiring from the organization

Production and processes within the airport are vertically integrated

Permanent personnel assigned to specific duties

Advantages of in-house provisions of FM functions

In-house employees usually perform better than outsourced individuals whose decision making is influenced by their employers rather than the organization for whom they are contracted (Wyndham, 2018).

Face-to-face dialogue offers more engagement between employees on certain projects, which may help create new energy, boost progress, and lead to bigger ideas.

The outcome of continued financial analysis often supports in-house retaining as opposed to the outsourcing option.

Offering salary and providing room for growth causes in-house hires to be less of a flight risk.

Maintaining in-house translates to improved levels of employee and customer satisfaction.

Intellectual property remains confidential under in-house provisions. Employees can sign a non-compete contract, which inhibits them from taking ideas if they choose to leave.

Retaining in-house offers the airports employees a chance to grow instead of outsourcing, therefore providing career prospects help minimize staff turnover.

Solving technical issues is much faster. In-house workers focus all their attention towards resolving a problem quickly, while freelancers complete tasks based on prior commitments (Facility Management: Risks and Opportunities 2001).

Although outside contracting enables airport managers to choose the best service provider, it may lead to quick methods that are not in-tune with the companys goals.

Investors tend to provide higher valuations and express more interest in in-house marketing and technology.

Disadvantages of In-house provisions

Poorly defined scope of outsourcing inevitably leads to problems in service management relating to higher supervision costs and lower customer satisfaction. Consultation is imperative.

Quality talent is usually tough to find, especially in remote areas.

Without specification of duties and responsibilities, it becomes tasking to gauge the performance of in-house employees

Employees usually expect certain benefits, whereas you just pay a fixed amount to a freelancer.

The airport may periodically venture into the market for external services, therefore it forces the in-house team to put in extra work in order to compete fairly if the need presents itself

The hiring process consumes a lot time, and if a worker departs, the process starts over again. Onboarding and training of new employees can be expensive.

Complacency is the biggest threat to in-house provisions and is easily noticed by customers.

Outsourcing Service Provisions

Outsourcing refers to the involvement of an external body in facility management. It is also the process by which an organization hires a separate body, under contractual terms, to perform a service, which alternatively, could be accomplished by in-house personnel (Atkin and Brooks 2009). Characteristics of outsourcing include:

a. Contingent workers are hired on a project-by-project basis

b. Individual service providers along a companys value chain

c. Contracted procurement and spot transactions

Advantages of outsourcing

Most freelancers are experts at disciplines, such as web design, paid search media, or content creation (Wyndham 2018).

Outsourcing enables the airport to achieve cost reduction, expand services and expertise, as well as improving employee morale and production.

It takes less time to find freelancers, due to agencies such as Upwork and Freelancer. This translates to airport services running faster.

Outsourcing helps an organization it is quest towards shaping corporate image.

Outside contracting is perfect for short-term projects since the talent might be needed for the completion of a single project.

This approach comes in handy by introducing new technologies, ideas, and findings that provide attractive possibilities for new and existing staff.

Disadvantages of outsourcing

Intellectual property is at risk of exposure. Try to gather some information on the people you outsource.

Contracted vendors might be incapable of dealing with the volumes and timeframe of finishing the task.

Fake freelancers are also a threat. It is important to countercheck s...