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Critical Literature review
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For ICR2 is the assignment to write a critical literature review. This one is about the added value of outsourcing facility services. My grate was a 7.8
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,Pagina | 2,Preface
Dear reader,
My name is … and I am a third-year student Facility Management at The Hague University of Applied
Sciences. Before you, lies a Critical Literature Review. This assignment is part of the international
classroom module. I learned a lot writing this review about subjects as Facility Management,
outsourcing, outsourcing facility services, added value and the added value of Facility Management.
This assignment challenged me and taught me to look at articles with a critical eye. It also gave me
the opportunity to improve my English vocabulary and writing skills.
During this period we welcomed some guest lectures, who gave great real-life examples of
outsourcing and added value in their work field. I want to thank all gest lectures for their stories and
… for answering all my questions. Also, I want to thank my fellow classmates for supporting me
during this semester.
A great gratitude for reading.
PLACE, DATE
NAME
Pagina | 3
,Table of Contents
1. Introduction........................................................................................................................................5
2. Outsourcing........................................................................................................................................6
How can outsourcing be described?...................................................................................................6
What are the advantages and disadvantages of outsourcing?...........................................................7
Is outsourcing cost-saving?.................................................................................................................8
3. Added value........................................................................................................................................9
What is added value?.........................................................................................................................9
In which way can the facility services be described?........................................................................10
How does Facility Management add value?.....................................................................................10
4. Conclusion........................................................................................................................................13
5. Bibliography......................................................................................................................................14
Pagina | 4
, 1. Introduction
The main question for this critical literature review is: ‘’In which way does the outsourcing of facility
services create added value to an organization?’’
This critical literature review was commissioned by The Hague University of Applied Sciences. A
critical literature review is the summery and analysis of one article or multiple articles. The
statements of different authors are compared and criticized. All the sources on the topics added
value and outsourcing facility services will be analysed and evaluated. Do they contrast or
complement each other? What is the point of view from these authors? From there, my point of view
is presented. This critical literature review uses various articles from newspapers, magazines and
other journals to answer all this questions. From the database received there are nine main articles,
which have been supplemented with our own searched sources.
How does the outsourcing of facility services create added value to an organization? Every
organization has one or more of the following facility services; catering, cleaning, lifts, IT,
landscaping, janitorial services, security, payroll, reception, electrical services,
heating/ventilation/air-conditioning, fire safety equipment, waste management, leasing, contracting
or postal services, etc. Outsourcing of these facility services can create added value.
To answer in which way the outsourcing of these facility services creates added value, there must be
some context about outsourcing and added value first. Therefore, the following questions are asked:
Outsourcing:
How can outsourcing be described?
Is outsourcing cost-saving?
What are the advantages and disadvantages of outsourcing?
Added value and Facility Management:
What is added value?
In which way can the facility services be described?
How does Facility Management add value?
In chapter 2 the sub-questions about outsourcing are described. Chapter 3 represents the sub-
questions about added value and Facility Management. Following is the conclusion. At the end, there
is the bibliography.
Pagina | 5
, 2. Outsourcing
In this chapter, a number of sub-questions about outsourcing are answered. This information is
necessary to ultimately answer the main question.
How can outsourcing be described?
How can outsourcing be described? Outsourcing can be described as the hiring of an external firm or
an external person to conduct certain tasks within the organization. Goods or services are obtained
from a foreign supplier (Boyce, 2020). Jesus Lopez agrees on this definition of outsourcing by Boyce.
He does add that the services cleaning, manufacturing and IT are outsourced the most (Lopez, 2017).
This contradicts Michael Zobl and Alexander Redlein, who indicate the services cleaning and
heating/ventilation/air-conditioning (hva) as the most outsourced facility services (Redlein & Zobl,
2014). The only agreement here is that cleaning is point to as (one of) the most outsourced service.
Per Anker Jensen indicates that there are many different ways of outsourcing. The other authors
missed this in in their definition of outsourcing. Jensen is professor Facility Management at Denmark
Technical University. Jensen is also author of several books and articles about Facilities Management
and Corporate Real Estate Management. He is therefore a strong and reliable source. There is single
service outsourcing, where one or more services are outsourced to different contractors. The service
provider is only responsible for one service, which makes it easier to remain control. With
outsourcing bundled services, the contractor provides three of four similar services together. This
option is often cheaper than single service because multiple services are performed by the same
company. An organization can also choose for in-house, own production. This option is mainly for
organizations who want to control all their services by themselves (Jensen, Strategic sourcing and
procurement of facilities management services, 2016).
However, outsourcing a service is only possible when there is a solid change management plan ready.
A change management programme will steer a company safely through outsourcing a service, by
dealing with the people side of the project. This includes getting involvement and willingness to
embrace the change. Communication with the employees and involving them is the import with
change. One of the best change models is Kotters 8-step model, according to Morten Kamp Andersen
and Peter Ankerstjerne (Andersen & Ankerstjerne, 2011).
John Kotters 8-step model of leading change (Kotter, 2012):
1. Create a sense of urgency, why do we have to change?
2. Form a powerful change management team
3. Create a vision for the change that will motivate and encourage people
4. Communication of the change toward the involved stakeholders is one of the most important
steps
5. Empower employees by involving them in this process
6. Generate short-term wins and celebrate them, this shows progress and makes the change
more fun for all persons involved
7. Consolidate gains and produce more change by reinforcing the right behaviour
8. Anchor the change by aligning behaviour and culture
If you follow this 8-step model of leading change by John Kotters, the change is guaranteed to have
been accepted by the employees and implemented correctly. If you do not involve and inform the
employees, the project will definitely fail.
Pagina | 6
, What are the advantages and disadvantages of outsourcing?
Michael Zobl and Alexander Redlein, professors from Vienna University of Technology, did research
on the number of external service providers in 2014. This research is based on the Mixed Method
Approach and the Mixed Model Research. Mixed method is a design in which both qualitative and
quantitative elements are used to answer a research question. The results of this research show that
the most outsourced services are cleaning, winter service and heating/ventilation/air-conditioning
(HVAC). Most of the companies had between 3 to 10 external service providers under contract.
But does an increasing number of external service providers, respectively an increasing outsourcing
degree, automatically lead to more quality? Over one-third has seen a quality improvement. Quality
is indeed one of the main reasons why organizations outsource their facilities services. A higher
quality is expected than when the facility service is performed in-house. An external company is
often specialized in a particular service and recruits employees with the right training, knowledge,
experience and motivation to fulfil this task (Redlein & Zobl, 2014).
According to the Small Business Trends article, risk sharing is also a big driver behind outsourcing
facility services (Riggins, 2017). It is part of risk management. Since hiring a specialist will hopefully
cover any potential risks regarding quality or personnel. If an organization does not choose to
outsource a service, they must find enough employees themselves. If this fails, the direct
consequence is that the task is not performed. This will cause work delays. Or the other employees
will have more workload as a result. The company you engage is bounded by the contract and will
have to provide this service in any case, even if they have insufficient employees.
Sandra Silk, bookkeeping and payroll adviser, also mentions the fact that being a business owner is
time consuming. There is so much to do when you are running a business. That is why it is useful to
engage an external company for a number of products, services, or activities. It can give a business
owner so much more peace of mind and gives freedom to focus on the core activities. Letting go of a
product or service to an external person can be challenging, but it is more efficient. However, further
research is needed to find out how much time the average business owner spends on all facility
services. Further research is also necessary to demonstrate the extent to which these services
actually cause extra pressure on employees (Silk, 2019).
There are some examples that can lead to failure when outsourcing. Some activities should not be
outsourced, such as customer services or who to hire. Employees of an organization should be
responsible for contacting their customers. Costumer service can be performed by other
organizations, but it is more desirable that someone directly and personally helps from within the
organization. Customers will feel less valued when someone from outside the organization informs
them or helps with complaints. There must also be someone from the inside who hires new
employees because this person knows who will fit within the team. There must be a certain feeling of
connection and understanding. Someone from outside the company can not decide whether or not
someone is 100% a match (14 crucial business task to never outsource, 2020).
Another problem is that outsourcing some services may ruin the reputation and success of the
company. When there is a poor quality, customers and employees are not satisfied. This directly
affects the organizations reputation. Negative experiences have a higher chance of being told and
shared than a positive experience. Nowadays a lot is posted on social media, where it is often visible
to the whole word. Therefore, the right supplier must be selected. When selecting the supplier, the
contract is also important. Most organizations want to build a long-term cooperation with this
Pagina | 7
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