A study into customer's perceptions of service delivery and its impact on an outsourced fm service provider

This report discusses the issues of service delivery and the impact on an outsourced FM service provider. It focuses on HBML, one of the UK's leading FM providers and part of the Balfour Beatty Group. The issues facing outsourcing is one of how to ensure the customers are delighted in the service they receive and their perceptions are positive. This can be a difficult prospect when the customer has a higher expectation than the service delivery model requires, or the provider is unable to deliver to this standard. Meeting these expectations is one of the conundrums facing HBML, particularly in London where there has been a haemorrhaging of business in the past 12 months leading to loss of revenue in excess of £7m. To discover how customers perceive the service, a survey based on the five dimensions of the ServQual model was distributed to determine how they measured the delivery by HBML. This was also sent to HBML managers to ascertain what gaps there were in assessment of the service provision. This produced a set of results which indicated the customer's perception of HBML was not positive, with the majority of answers suggesting they had neutral views or were slightly either side of this position. The results from the CSM's were more positive, indicating gaps in both appraisals of the service. This is likely to lead to an imbalance between customer and service provider which could ultimately lead to damaged relationships and loss of business. It is essential that action is taken to prevent this situation escalating and to reverse the effects of current customer perceptions. The introduction of a service delivery system, such as the input-transformation-output model, could lead to an improved service, which could see benefits as described in The Service Profit Chain, Heskett et al. (2000). Based on this study it is recommended this model or similar are implemented or others explored to stem the outward flow of business.