One way of cutting down business costs is outsourcing non-core activity, says Paul Lynch, Managing Director of ISS, Ireland’s leading facilities management company.
In today’s tough economic times, it’s more important than ever to look at making cost savings and improving your bottom line. One way of doing this is by outsourcing non-core activity and concentrating on your core business activities. There are a host of functions that you can outsource from accountancy to IT support and HR, but perhaps the most basic is the housekeeping services that keep any facility or property well maintained and spick and span.
Outsourcing can cut your facility management costs by 10% to 12% in the first year, with an additional 2% to 4% in savings in subsequent years, says Paul Lynch, MD of Ireland. “We can do this because we have additional scale, plus we are experts in what we do – cleaning, catering, property services, security, office support, catering, washroom supplies and pest control – we know the industry benchmarks and what can be achieved to improve productivity in these areas.”
Lynch is a man on a mission: “To develop, market and deliver services of high quality, which meet the overall needs of our customers, in order to secure a clean, safe, healthy, productive, comfortable climate and environment for work and leisure.”
He was appointed head of ISS Ireland in summer 2009 and has embraced the task set to him by the company, which has been operating in this country since 1995, when it acquired a cleaning company here. Today, ISS is Ireland’s largest and fastest growing facility services company, employing more than 3,700 people nationwide, with offices in Dublin, Cork, Limerick, Galway, Drogheda, Letterkenny and Celbridge.
Now a global company, ISS Group can trace its roots back to 1901, when it started in Denmark as a security company. In the last decade, the company has expanded rapidly: Since 1998, ISS has acquired more than 400 companies globally as part of an aggressive expansion policy. Today, the company has more than 100,000 business clients globally and serves more than a million lunches everyday in ISS-operated canteens and restaurants. Worldwide, ISS staff are responsible for cleaning more than 250million m2 of space. With more than half-a-million staff, the ISS Group claims to be the world’s fifth largest private-sector employer, but Irish Building reckons that, after the US retail giant Wal-Mart, ISS is the world’s second largest private sector employer.
However, unlike Wal-Mart where trade unions are not recognised, ISS has a good relationship with trade unions in Ireland and abroad – in 1999 it entered into a partnership agreement with SIPTU giving it full union recognition in the workplace and it is currently included on the ‘Decent Work Companies’ list produced by UNI Global Union, a worldwide trade union with 20 million members. Throughout its activities, ISS has a commitment to quality, as set out in its mission statement, its vision and its policies.
Lynch joined ISS Ireland as managing director this summer and the company’s mission statement, values and policies state fairly clearly how he is expected to steer the company in the years ahead. A graduate of University College Dublin, he started his career with Arthur Andersen, where he trained to become a Chartered Accountant before spending a number of years with Riada Corporate Finance. He then joined Heiton Group Plc, where he was a director for seven years holding positions including Director for Corporate Development and Managing Director of the Heiton’s Retail division, which incorporated Atlantic Homecare as well as In-House at the Panelling Centre. He then moved to One51 plc where he was responsible for the management and development of its UK waste-management and recycling business.
“I am absolutely delighted to join ISS Ireland and I am very much looking forward to contributing to the further growth and development of the business,” says Lynch.
His move from One51 to ISS should not be read as a sign that ISS Ireland is about to move into waste collection. He says: “While we don’t physically remove the waste from the premises, we do organise for that to happen. We are, of course, already involved segregating waste into different waste streams and organising for those waste streams to be disposed of properly. Waste management has always been an important part of the service that we offer and will be a growing part of the business, especially now as we have moved towards offering a full facilities management service.
The profile of facilities management is relatively new in Ireland: the country held its first dedicated Facilities Management conference only in February of 2009. Lynch admits to being a little surprised that such a first event should happen so recently, particularly as so many of the individual activities involved – cleaning, security, etc –have been sub-contracted/out-sourced by many companies for many decades. Nevertheless, a fully integrated facility service offering is a relatively new concept in Ireland, but it is one that quite obviously makes practical sense for both customers and firms like ISS.
At present, facilities management in Ireland is reckoned to be worth about €3billion in total. However, the overall value of the facilities management market is increasing, both globally and nationally, as large transnational organisations, particularly in the IT and pharma sector, are choosing to outsource their facility management services.
With a turnover in excess of €90 million, ISS Ireland is the largest facilities services company in this country. Indeed, ISS Ireland claims to be the only fully-integrated facility services company, offering a wider range of services than its competitors.
“What differentiates ISS Ireland from other facility managers is its ability to self deliver in excess of 90% of services to the client,” says Lynch. “Translated, this generates the opportunity for considerable savings for clients through efficient management of the workforce. ISS offers clients these potential efficiencies across a single service or across multi services but with a one single point of contact.”
While ISS has moved to provide a complete facility management offering, cleaning is still its core business, accounting for 50% of the company’s annual turnover in Ireland and 53% of its business globally.
While the company has chiefly grown organically, ISS Ireland has also followed its parent’s strategy of growth through acquisitions, most recently with the purchase of Pest Check in March 2008 and Chubb Security Personnel in May of this year.
Founded in 2001 and operating in the region around its base in Shrule, Co. Mayo, and in Greater Dublin, the pest acquisition gave ISS an enhanced presence in the mid-west. “By acquiring Pest Check, ISS have strengthened their coverage in the West of Ireland as well as in Dublin and we are now in an even better position to offer pest control services to our existing cleaning customers in that area,” said Lynch. “This has further developed ISS Ireland as a full-scale national service provider and enables ISS to meet the increasing customer demand for multi-service suppliers.”
The acquisition of Chubb Security Personnel was of a larger scale, adding another 600 employees to the ISS Ireland payroll. Lynch commented: “Acquiring Chubb Security Personnel, a leader in the provision of security services in Ireland, ensures ISS builds a strong competency in security at a national level. The great strength of our business is the ability to provide a full suite of solutions to meet our clients’ facilities requirements, whether through a single service of cleaning, security, catering or property services, a multi-service offering or a complete integrated facility service solution. We are pleased to have acquired the premium manned security business in Ireland and in particular we are delighted to bring the expertise and experience of the Chubb Security Personnel management team to ISS.
The Chubb Security Personnel purchase followed a move by Chubb to sell all of its security personnel management business. Interestingly, the purchase by ISS New Zealand of Chubb Security Personnel there means that the ISS national division is now involved in prisoner escorts. Lynch says this too could be an area of expansion for ISS Ireland.
“We are interested in making more acquisitions in Ireland,” he said. “In our two core activities, cleaning and security, we have a nationwide coverage, indeed we also manage facilities in Northern Ireland for some clients based in the Republic. Further acquisitions will therefore more likely be to increase our coverage in some of our other service lines like pest-control, catering and property services. Our biggest potential for growth however will mainly be organic through selling additional facility management services to customers who are already using us for, say, cleaning or for security. It’s because we have been able to increase the services that we are supplying to existing clients that we have been able to continue to grow our business, but there is no doubt about it this is a difficult business environment. Our clients are putting pressure on us to provide greater value and we have to look for ways of doing that, increasing productivity, looking at improving our systems, in order to deliver that greater value.
“We have been lucky that a large number of our clients are in sectors that are still fairly robust. We don’t have a large proportion of our business catering for the construction industry or retail. A large proportion of our clients are in the multi- national sector (including pharma / medical devices) and, in addition to providing office-cleaning services to these, we supply specialist cleaning services for their manufacturing facilities, which must in many cases be kept as sterile environments.”
The largest proportion of ISS Ireland clients are in the private sector, but it does have a large number of public sector clients in the area of health-care, education and transportation. Lynch admits that the organisation of public sector procurement is not uniform. “In the healthcare sector, for example, one hospital will outsource all its cleaning services and will have no problems taking on an outside contractor; some may only out source partly, but in another hospital everything will be done in-house and there will be little or no dealings with outside parties. I suppose it has to do with how they have been traditionally organised and the nature of their staff relations”
In the education sector, ISS mainly serves third-level institutions, but it also has several secondary schools as clients and Lynch would like to see more of these, as well as primary schools as clients. “Especially in urban areas, it is easy for us to roster staff to do a few hours cleaning after school hours as part of the overall working day of our employees, we could also organise for a full-time janitor to be in place throughout the day,” he said. “In addition to cost benefits, there is an advantage to the school management of reduced administration. For example, if there is a problem with a cleaner or the level of cleaning provided, you report the problem to us and we take the effort to put it right. As well as cleaning services, we are would be able to offer schools a care-taking service, maintenance, pest-control,.”
ISS currently delivers more than 100 individual services from catering to technical maintenance and has a quality management system that encompasses all these activities. The company ISS has established ‘Centres of Excellence’ across the world, the most recent of these is at the ISS offices in Little Island in Co. Cork. The ISS quality management system conforms to the international ISO 9001:2000 standard and the company is also accredited with ISO14001 and IS999:2004 standards. Lynch says: “We are a quality company, who are very interested in adding value to the services we already provide our customers – that is why we are growing.” firstname.lastname@example.org