Facilities Management means different things to different people. A simple definition may be the provision or services that enable the core activity of a business to function; cleaning, catering, security, IT, reprographics, reception, room and car park booking, estates management, asbestos management, space planning/management and the creation and maintenance of the built environment are common examples of facilities management.

The last 20 years have seen the growth of specialist firms each offering to undertake the provision of these services across many client firms, using the economies of scale to reduce the costs to the client whilst maintaining the (and hopefully improving) the levels of service the client feels necessary to support the core business. Service Level Agreements (SLA) are widely used as a contractual means of enunciating those requirements and these can range from a prescriptive specification that details how the service should be performed as well as delivered through to the more modern "output based specification" where the client sets down the minimum resultant service he requires and the supplier is given the freedom to innovate and find new ways of carrying out the service as long as they deliver at least the minimum standard. Where that innovation reduces the cost of delivering the service, the savings are sometimes shared between the supplier and the client. Because in-house staff historically undertook these services, they were simply seen as an essential overhead and the value or contribution was not measured. Even when they were outsourced, the measure was against the in-house cost rather than the value they provided. In addition, to simplify the procurement, services that had previously been undertaken by cross-disciplinary personnel as a single and relatively integrated service were broken into discrete packages and managed separately. Although this has helped client organisations to define their requirements more clearly, communication between the different service delivery teams is limited, reducing the opportunities to innovate by taking a more holistic view.

Although outsourcing is usually successful in reducing costs - and often in improving levels of service - there are drawbacks for clients that are only now emerging:

1. Loss of knowledge - Each supplier invariably uses its own IT systems to plan and record work undertaken and, though the client will may ask for reports to be generated in a manner that allows them to automatically update their financial systems, much of the detail remains with the originating system or the people who carried out the work. As a result, much valuable information remains in the hands of the new teams of suppliers, both in terms of the staff’s experience of running the facility and any captured data that is outside the scope of conventional reporting. This knowledge will prove to be a valuable asset in the future and one that suppliers will naturally use to their advantage in future negotiations.
2. The helicopter view - Because each sphere of activity is managed and reported discretely, it is often difficult to identify improvements to the whole business that may come from process improvements that cross several sectors.