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THE OUTSOURCING PLUNGE
The
Story
By Amber Kuhnert
In 2009 Applebee’s made the decision to depart from a
APPLEBEE’S SUMMARY
traditional, in-house property and facility management
model to an outsource partnership with Blackfin and
LANE4 Property Group to manage its Kansas City office
and kitchen facilities.
ENERGY MANAGEMENT
Nearly a year into the contract the team was already
seeing significant results. Blackfin and LANE4
combined to lower Applebee’s operating expenses
by approximately 20%* and improved service levels
based on surveys before and after the partnership was
developed.
Reduced expenses by 20%
and improved service levels.
Applebee’s 175,000 square foot building was built in
2008 and certified LEED Silver. Its LEED rating made
the 20% energy savings all the more remarkable. The
building’s automation system was used to track KW
demand and KWH.
• Peak use and causes were identified and reduced.
• Use of main air handler electric heating coils
was virtually eliminated by managing supply air
temperatures (supply air temperature reset).
• Other loads were turned off and simultaneous
heating and cooling of supply air was eliminated.
These improvements were made simply by changing the
building automation system (BAS). The outcome was
a dramatic reduction in demand (KW) and energy use
(KWH).
NO MAGIC BULLETS
The strategy was simple, better contracting, energy
management and specialized personnel were the
primary ingredients in enhancing overall performance
(reduced expenses and improved service quality).
Managing real estate and facilities is our core business.
Managing millions of square feet for many different
users rather than a single asset enhances our ability
and gives us a perspective that is typically very different
from employee operators of facilities.
* Expense data available on request and all comparisons include
all outsourcing costs.
Environmental Protection Agency Laboratory; Kansas City, Kansas
Blackfin, LLC - 2121 Central Street, Suite 155, Kansas City, Missouri 64108 - www.blackfinllc.com - [email protected] - 816.985.4850
THE OUTSOURCING PLUNGE
CONTRACTS
Many contracts were eliminated or reduced in scope
and the work was assigned to Blackfin specialists. Other
contracts were taken out to the market for competition
where our economies of scale and familiarity with
comparative quality and costs of a roster of competitors
drove down costs without compromising quality. Many
incumbent contractors were retained but pricing was
improved.
Benchmarking was used to compare costs per
square foot for services like janitorial and grounds
maintenance.
SERVICE LEVELS
Jeff Sola, Applebee’s Senior Director in charge of
architecture and facilities, said, “Our employees
routinely tell me that the service levels are dramatically
improved since outsourcing. Blackfin does more with
fewer full time people on site.”
WHY THE JUMP IN CUSTOMER SERVICE?
• The right people on the bus: Committed, driven
people with good interpersonal skills.
• Putting people in a position to win: Technical support
from the organization to solve problems quickly and
effectively.
“Employees routinely tell me that
the service levels are dramatically
improved since outsourcing.”
- Jeff Sola, Applebee’s Senior Director
• Bench strength: A broad range of experience with
depth in design and hands on technical applications
Applebee’s Headquarters; Lenexa, Kansas
Blackfin, LLC - 2121 Central Street, Suite 155, Kansas City, Missouri 64108 - www.blackfinllc.com - [email protected] - 816.985.4850
THE OUTSOURCING PLUNGE
CONFESSIONS OF
AN OUTSOURCING
SOLUTION PROVIDER . . .
Applebee’s is not an isolated case. Similar results were
found when John Pauley left a Fortune 150 company to
provide facility and property management for the same
company (i.e., we outsourced ourselves).
We reduced costs by spreading personnel expenses
across a broader customer base. We essentially
delivered a more targeted service level and volume
rather than our client incurring costs for full time, skilled
people.
Although we had the same basic team in place, our
management and expertise were able to restructure and
substantially improve cost efficiencies and operation
quality. Like the Applebee’s story our client told us
our service levels were as good or better after we
outsourced ourselves as before.
As empoyees of a large company, we always work to
reduce cost and improve efficiencies, but to make such
significant impacts so quickly surprised us.
After taking the plunge and with the benefit of
hindsight, understanding why outsourcing worked so
well is clear. While results may vary from assignment
to assignment, our confidence in reducing costs and
enhancing service is supported by these real-life cases.
Applebee’s Headquarters; Lenexa, Kansas
Blackfin, LLC - 2121 Central Street, Suite 155, Kansas City, Missouri 64108 - www.blackfinllc.com - [email protected] - 816.985.4850
THE OUTSOURCING PLUNGE
WHY OUTSOURCING WINS
Outsourcing can be a delicate issue. We believe that
we can typically outperform our colleagues who are
career employees specializing in facility and property
management.
Our own experience as employees who transitioned
to a third party service provider is telling. We simply
became more efficient, focused and experienced by
seeing a variety of other situations and have successfully
overcome some of the common assumptions about third
party providers.
Here are a few of the objections we hear from
outsourcing opponents and how we’ve been able to
overcome them:
Our company expects specialized services that no single
third party can deliver.
Our view: Always possible but most facilities demand
the same basic services and we have specialists in most
of them. In many cases, buying just part of a specialist is
less expensive than employing one full time.
Our executive team demands a very high level of service.
Our view: We understand that crucial executive, board
and client meetings have to happen in environments
without distractions caused by air conditioning and
other problems. Our experience as a third party service
provider is that we are equally as focused on delivering
high touch services as in-house employees.
Third party providers lack the loyalty, commitment and
understanding of the company that employees have.
Our view: This is our core business so we have a laser
focus to ensure we deliver on these customer service
factors.
Environmental Protection Agency Laboratory; Kansas City, Kansas
Blackfin, LLC - 2121 Central Street, Suite 155, Kansas City, Missouri 64108 - www.blackfinllc.com - [email protected] - 816.985.4850
THE OUTSOURCING PLUNGE
SO WHY NOT OUTSOURCE
FACILITY AND PROPERTY
MANAGEMENT?
Good question. We know every company is different
and begin engagements with processes that ensure we
have a clear understanding of essential concerns and key
metrics. That understanding enables us to deliver great
service cost effectively.
GETTING STARTED:
We work with clients to establish a “base case” that
accurately reflects their current operating costs, scope
and service levels. From there, we establish a “future
state” that paints a picture of our outsourced alternative.
In most cases, we can apply that study to offer clients
an optional “assured savings plan” that guarantees cost
reductions without compromising service levels: “Putting
our money where our mouth is”.
Contact us for more information, cost analysis and first hand
reviews from our clients.
John Pauley, P.E.
2121 Central Street; Suite 144
Kansas City, Missouri 4108
(816) 200-1330
[email protected]
www.blackfinllc.com
Federal Bureau of Investigations; Birmingham, Alabama
Blackfin, LLC - 2121 Central Street, Suite 155, Kansas City, Missouri 64108 - www.blackfinllc.com - [email protected] - 816.985.4850