Anuj Gupta is a very ambitious man. As chief executive of his own company, the London-based CoreBPO, he aims to outsource business from half of the UK’s top 15 surveying firms. He is targeting client accounting and service charge management under the individual firms’ property and facilities management departments.
At the most extreme, this could mean hundreds of jobs being lost from large surveying firms in the UK. However, Gupta promises that he could save these companies thousands of pounds a year for jobs that will be done just as well at his company’s Indian office in New Delhi – a tempting proposition for any firm.
It is not a new concept. US real estate firms have been outsourcing various aspects of their work to India for the past few years. US-based Global Realty Outsourcing, which operates in Chennai, India, was formed in 2000 on the back of the demand for this type of service.
To find out whether outsourcing aspects of their services was a reality, EG canvassed the UK’s top 10 surveying firms (as dictated by the EG 2004 top 85 surveyor-by-turnover). The questions that EG sent to the companies put them in a flutter, because “outsourcing” in the UK tends to go hand-in-hand with “job losses” – and anything that even hints at job cuts is treated like leprosy.
After nearly two weeks of pursuing the businesses, the replies came trickling through. The majority were very hesitant, but some gave an adamant “no” (see panel) to the idea of outsourcing.
Firms want to save money
While outsourcing is still a dirty word, denying that a large company would ever consider it is bad business, says Jeremy Brooks, head of call centres with GVA Grimley. “Any big business worth its salt should be aware of the ease with which operations can be handled offshore,” he says.
The fact is, surveying firms, like any other business, want to save money. And Gupta, who set up CoreBPO two years ago, promises to save them a lot. He estimates that a large surveying firm with a rent roll of £300m takes 1.5% commission. To collect from the various businesses, it would need to employ around 100 people. He has estimated that employing each of these people, including wages and overheads, is £60,000 pa in the UK. Gupta says this means that such a company makes little or no profit.
Gupta is offering to do the work offshore, for less than £20,000 per person – a massive saving for any company.
But what about the scaremongering over job losses? Gupta’s answer is diplomatic. He says people are “transitioned”, and that jobs are therefore not lost. Giving an example of a firm he worked with recently, Gupta says he has “transitioned over 55 people. But they didn’t lose people in the UK.”
CoreBPO already handles outsourcing for CPM Asset Management, Scottish Power, Sainsbury’s Energy and Mount Street Holdings.
Just to clear up any remaining doubts, he adds: “I have two messages for people. First, we are not just about cost process. Second, we are about improvement and skill ability. You wouldn’t have to lose your people. You can train them to do more and to help keep the company growing. You can just as well keep your people. We become service suppliers to you from an offshore point.”
Ambitious plans
Gupta is not talking to just large commercial firms. He is out to get the whole of the UK’s estate agency firms – all 15,000 of them.
“Estate agents make part of their money on lettings, and 5% is charged for management,” he says. “If it is £1,000 a year, they could come to us and we can do it for £300. They keep £700. We would provide a free UK number that would go through to India. We would then field the calls/complaints. There would be a pre-decided list of maintenance people, the work order would be placed and then followed up when it is done. We report back on a custom-designed software system.”
Gupta adds that property management is a business about taking away somebody else’s headache, and he wants to be the one to do it in the UK. In fact, he is aiming to be the biggest and the best in the UK.
Whether he succeeds is another thing. From the reluctance to respond to EG’s survey, it seems that, from the point of view of the big commercial agents at least, outsourcing could cause more headaches than it solves.
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The 10 companies are listed in the order they appear on the Top 85 surveyors by UK turnover, as published by EG in 2004. Number 11 has been included, following the demise of Chesterton, which was last year’s number 10. Savills‘ property management department was established four years ago and employs 20 staff. The firm says: “It would not be possible to outsource managers because the department needs to be on site or near to the site. Savills does not run a helpdesk, and calls are received by relevant managers. There is no middle man.” Would the company ever consider outsourcing? “No.” CBRE would not comment. Jones Lang LaSalle has 250 people in its property management department with a further 900 on-site staff. The firm would not answer EG‘s questions on outsourcing any aspect of this department. The only comment was “we operate an efficient, customer focused and integrated facilities management model (with training accredited by the International Facilities Management Association) making full use of available and proven technology.” DTZ admitted it would consider outsourcing its200-strong department, set up in 1950, to India. But a spokesman adds: “We operate in integrated property management teams to ensure our clients receive the best skills but a balanced solution. This would be difficult to achieve if part of the operation were offshore. Only a limited level of services could be offshored, and therefore savings are unlikely to be material compared with the management time that would be required to set it up.” Knight Frank’s facilities/property management department employs 165 people, and was set up in 1996. In answer to whether it would ever consider outsourcing, it says: “This question is for companies that wish to outsource FM, but we are in the business of managing the FM as an outsourced activity.” King Sturge’s partner for corporate real estate, Tim Sonnex, says: “From a corporate real estate services point of view, we don’t do any large-scale facilities or property management, just one-off properties. Anything larger than that, and we would bring in a partner, so we effectively outsource the work already.” GVA Grimley After initial denials, Grimley’s spokesman Kevin Marriott admits that the company has considered outsourcing parts of its property management department. No other details were received. Lambert Smith Hampton’s head of property management, Julian Healey, says there are 250 people in his department, which was set up more than 30 years ago. On outsourcing, Healey says: “As a commercial operation, LSH must consider any decision that promised a potential cost saving of two-thirds. Such a fundamental change could not, however, be made upon cost savings alone, but of the total impact on the business, especially client service and personnel.” He confirms that the firm has been approached to outsource its facilities to India. But, he adds: “To outsource would risk severe segregation and division of established close working relationships, both internal and client-facing.” Colliers CRE has 60 staff in its asset and property management department, which was established in 1960. Jeremy Day, head of the department, says: “We see facilities management as a core part of our service offering, and view it as critical that the end-users are able to access our specialists directly, so offshoring is unlikely to work for us or our clients.” But Day does admit to being approached to outsource aspects of the department. He adds: “These are always received with an open mind.” Cushman & Wakefield Healey & Baker‘s property department employs 92 people in the UK and 330 across Europe. It has been operating since the 1950s. Simon Elmer, head of asset services, says they would consider “possibly outsourcing some of the financial element of management if there were clear qualitative and cost benefits, but nothing else”. But, he adds: “We certainly have no plans to do so in the near future.” The firm has been approached to outsource the financial processing element of management: “We are the team that our clients themselves are outsourcing to.” On the pros of outsourcing, Elmer says: “Cost is almost certainly an advantage, and possibly also improved quality of service on purely process-driven tasks.” However, he believes the disadvantage would be a lack of control, “because of the remoteness of the location”. Additional research by Laura Hession |
