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Bundled Versus Single Service Security: a Discussion Bundled versus Single Service Security: A Discussion A Security Research Initiative Report Professor Martin Gill Charlotte Howell Thomas Horton 2013 CONFIDENTIAL Perpetuity Research & Consultancy International (PRCI) Ltd 148 Upper New Walk · Leicester · LE1 7QA · United Kingdom www.perpetuityresearch.com [email protected] Tel: +44 (0)116 222 5555 Fax: +44 (0)116 222 5557 Copyright Copyright 2013 Perpetuity Research and Consultancy International (PRCI) Ltd All Rights Reserved. No part of this publication may be reprinted or reproduced or utilised in any form or by any electronic, mechanical or other means, known now or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from Perpetuity Research and Consultancy International (PRCI) Ltd. Warning: the doing of an unauthorised act in relation to copyright work may result in both civil claim for damages and criminal prosecution. 2 Acknowledgements We would like to thank a range of people for their support in this study. Most importantly the members of the Security Research Initiative who supplied the funding and the company representatives who also provided advice, which has been extremely helpful. They are: Advance Security (Richard Bailey); Carlisle Security (Martin Woollam); Case (Dave Newbury); Caterpillar (Graham Giblin); Emprise (Paul Harvey); E-on (Barrie Millett); G4S (Andrew King and John Whitwam); Mitie (Andy May); National Security Inspectorate (Jeff Little and Chris Pinder); Nexen Petroleum (Grahame Bullock); OCS (Shaun Cowlam and Jon Crook); Securitas (Geoff Zeidler and Darren Read); Standard Life (Frank Connelly); VSG (Martin Wainman and Keith Francis); Wilson James (Stuart Lowden). There are many people who facilitated contacts for us in this country and abroad, and we would specifically like to thank: Mark Beaudry, Jason Brown, Chris Clubbage, Gary Evanson, Arien de Kort, Linda Florence, Dave Gilmore, David Hyde, Glen Kitteringham, Belinda Miller, Di Thomas, Dennis Shepp, Paul Stanley and Paul van Soomeran. In addition we are grateful to the support given by Mike Hurst, Graham Bassett and Mike Alexander from ASIS (UK Chapter) and Michael Gipps (ASIS International) for providing access to expertise within the CSO Roundtable. We are grateful to others who helped publicise the study and generate support for it, acknowledged in appendix one, especially Mark Rowe, Bobby Logue, Brian Sims, Liz Ashley of the Security Industry Authority and Trevor Elliott of the British Security Industry Association. During the course of our work we sought advice from many professionals, and some academics from this country and abroad, and we would like to thank all of those who spared the time to answer our questions. Most importantly we owe a special thanks to all those who completed our survey and took part in interviews. The findings, including all the views expressed are exclusively our own. Martin Gill Charlotte Howell Tom Horton 3 SRI Members 4 Table of Contents Acknowledgements .......................................................................................... 3 SRI Members ................................................................................................... 4 Executive Summary ......................................................................................... 7 Preface ................................................................................................. 10 Section 1. Single and Bundled Services in Context ..................................... 11 Defining facilities management ................................................................. 11 A background to outsourcing .................................................................... 13 Outsourcing frameworks and approaches ................................................ 14 A more detailed look at the distinction between single and bundled services ....................................................................................... 17 Determining the importance of bundling ................................................... 18 How does this apply to security? .............................................................. 20 Working together: terminology used in describing a co-operative approach ................................................................................................... 21 Conclusion ................................................................................................ 25 Section 2. The Advantages and Disadvantages of Different Approaches to Outsourcing and Different Types of Bundling ........................................ 27 The issue of cost ...................................................................................... 27 Listing the advantages and disadvantages of different approaches to outsourcing and some of the implications for management .................. 28 Discussion ................................................................................................ 33 Section 3. What Clients Say ........................................................................ 34 What is meant by bundling and other terms? ........................................... 35 Why outsource? ........................................................................................ 36 Why not outsource? .................................................................................. 39 Bundling in perspective............................................................................. 41 Why bundle? ............................................................................................. 41 Why not bundle? ....................................................................................... 46 The influences on the procurement decision ............................................ 52 A note on partnerships.............................................................................. 60 Discussion ................................................................................................ 61 Section 4. What Suppliers Say .................................................................... 63 Suppliers in perspective............................................................................ 63 Why bundle? ............................................................................................. 66 Why not bundle with FM services? ........................................................... 74 Making bundling/single service work ........................................................ 82 Conclusion ................................................................................................ 89 Section 5. Discussion .................................................................................. 91 5 Factors that determine the approach and its effectiveness....................... 94 References ................................................................................................. 99 Appendix One: Methodology and Sample .................................................... 104 The approach ......................................................................................... 104 The survey .............................................................................................. 104 One to one interviews ............................................................................. 105 About Perpetuity .......................................................................................... 107 About the Authors ........................................................................................ 107 Professor Martin Gill: Director ................................................................. 107 Charlotte Howell: Researcher ................................................................. 108 Thomas Horton: Research Assistant ...................................................... 108 6 Executive Summary The research identified a range of FM outsourcing options, although the use of terminology to describe these is varied and inconsistent. Generally speaking single service outsourcing is acknowledged as the least complex and as the number of services increases, under a range of different models/arrangements the delivery management becomes more complex. But much depends on the skills of those involved and the extent to which arrangements in place are supported by a well thought through strategy. Clients said they outsource their security because: security companies are experts at security it is more cost effective security contractors offer flexibility it enables them to offset at least some of the liabilities of doing business Clients said they preferred to keep security in-house because: security contractors are not sufficiently competent in their areas of need they do not have expertise in sub-contracting work they like to keep control of security because it was deemed important The reasons why clients and suppliers said they preferred bundling is because: it offers cost savings it entails less bureaucracy and provided a single point of contact making it easier to manage it provides for greater efficiencies in delivery and in some cases a better security service it facilitates innovation it offers efficiencies in terms of the opportunity to multi skill and motivate staff, and raise standards it facilitates the integration of technologies it enables clients to benefit from an emerging expertise suppliers were developing it provides an opportunity for standardisation delivery at a higher level across sites/locales
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