Emerging Issue: To begin with, outsourcing maintenance activities from the Australian urban water industry looked like a one-way street. Once the road was taken, there would be no turning back. Now, several water businesses are insourcing these activities once more. As with any change, this shift prompts a fresh wave of reflection on maintenance resourcing options.
Outsourcing maintenance services in the water industry has been a steadily growing trend over the past 20 years. The apparent motivation for outsourcing to maintenance services organisations has been pressure to reduce operating expenditure, improve service levels, or find the right skills and technology. Any activity that can be effectively ring-fenced from the core business of a water authority – summarised as planning and risk management – has offered potential for ‘contracting out’. Under an outsourcing arrangement, water businesses can share risk with the service provider, achieving a specified performance for a specified price.
As newly emerging players, maintenance services organisations have brought advantages of:
- Increased focus on efficiency, working under commercial arrangements
- Scale and cost-conscious delivery approaches that support the use of technology, such as mobility solutions
- Scope to offer employees more – and more flexible – career paths, and
- Discipline, through operating contract models, in work allocation, performance management and reporting, and budgeting.
In their turn, water businesses are starting to look through the lens of outsourcing at the bigger picture of asset management, asset operations and the provision of services to customers. A critical view of a well-directed and well-documented set of maintenance activities inevitably stimulates questions and ideas about interface improvements.
A creative tension can develop between cycles of outsourced and insourced provision of maintenance services. While a range of factors might drive which cycle is adopted, successive cycles of either insourced or outsourced provision of maintenance services; each cycle strives to innovate and bridge the new gap between the current and target state.