Exploring Outsourcing

By Deborah L. O’Mara | Mar 15, 2006
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Welcome to 2006, where outsourcing is the buzzword of the year. In actuality, you might equate it more appropriately with an equally familiar word—subcontracting.

As companies wrestle with ways to attain and maintain profitability and focus their market, they are using outsourcing as an integral way to keep a competitive edge in electrical contracting.

The complex concept may be accomplished in a number of different ways. Think of it as stretching your technical expertise and partnering.

Here is when you might consider outsourcing maintenance contracts:

°When your labor pool is stark and you need extra help.

°When you have the ability to partner with someone who might have more of an edge in performing maintenance on a specific system or technology.

°When maintenance for the system may be out of the scope of your normal work, or beyond your expertise—perhaps power quality or networks?

°For national accounts in which there may be geographical restrictions to providing regular scheduled maintenance.

°When you simply don’t have the staff to do justice to a critical job function.

When you think maintenance, what comes to mind? Fixing systems, repairing problems and reacting to malfunctions in the field? Maintenance goes way above and beyond that.

Maintenance, if properly performed, involves regular visits to customers to check the current integrity of the system, report problems and perhaps suggest upgrades. If you are not offering your customers maintenance contracts, you should be. Maintenance contracts are a great way to add recurring revenue streams, boost your reputation as a problem-solver and fuel the ever-important referral.

According to a recent independent study by Electrical Contractor magazine, “Contractors Roles in Scheduled Preventative Electrical Maintenance,” the following insights were noted:

°Maintenance is regular and preventative. This is to prevent unexpected, inconvenient and often costly repairs from being necessary.

°Contractors have an ongoing and influential role due to their strong involvement in maintenance.

°About six in 10 contractors who currently perform maintenance, and more than three in 10 who do not, expect their firm’s revenues from this area to increase over the next three to five years (for more survey results, see page 86).

For companies with extensive power quality endeavors, maintenance may be more detailed, time consuming, labor intensive and less profitable, so it may be wise to outsource the power quality maintenance to a reputable partner.

If it is outside your expertise, it may be the right time to consider this option, said Peter Harwood-Stamper, power quality marketing manager, Fluke Corp., Everett, Wash.

“Power quality may be the area to outsource maintenance,” he said.

For those electrical contractors who have expertise in power quality maintenance, there may be opportunity for them to outsource their knowledge to others as well, especially in this growing area where facilities managers are in need.

Outsourcing is also a great way to focus on specific costs for a job. The company you contract with can set an amount for the job and that can be figured into the overhead and operating costs.

Where to turn

A good place to find out if a contractor is willing to explore this type of partnership-relationship is with other contractors at the National Electrical Contractors Association (NECA) or International Brotherhood of Electrical Workers (IBEW) meetings.

Also, consider checking specified professional organizations that might be able to put you in touch with reputable contractors.

Words of caution

There are some legal issues to consider with regards to outsourcing, according to Timothy R. Hughes, Hughes & Associates PLLC, Falls Church, Va., and legal contributor to Security + Life Safety Systems magazine. Hughes offers these tips when considering outsourcing maintenance contracts:

°Make sure you outsource to a reputable, licensed and insured entity. If you are subcontracting work downstream, you are likely still liable to your owner. You want to make sure you can pass it downstream if there is a problem.

°Make sure you obligate the subcontract to you the same way you are obligated to the owner. You do not want lack of contractual congruity as you can be left holding the bag.

Remember, anytime you outsource, the reflection is still on you and your company. Only outsource when it makes the best possible sense and boosts the integrity of your company. EC

O’MARA is the president of DLO Communications in Park Ridge, Ill., specializing in low-voltage. She can be reached at 847.384.1916 or [email protected].



About The Author

O’MARA writes about security, life safety and systems integration and is managing director of DLO Communications. She can be reached at [email protected] or 773.414.3573.





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