Over the last several years, companies have increased their focus on managing and controlling indirect spend to reduce costs. Procurement teams have found that even small reductions in categories traditionally ignored can yield significant savings and help boost the bottom line. One such category is facility management.
Although not as much a focus as IT or marketing and professional services, facility maintenance is still considered a high priority according to research, particularly among organizations that manage indirect spend across multiple facilities or office locations. Your landscaping expense, then, becomes a priority.
A national landscaping program can be incorporated into your cost management strategy as it seeks to achieve savings and provide better spend visibility. Moreover, a national provider reduces the time spent on managing hundreds of local vendors, helping you focus more on strategic initiatives.
- IT & telecom
- Marketing & Professional Services
- Facility Maintenance & Management
- Office Supplies
Order of importance for indirect spend categories. Source: Procurecon Indirect West 2016
Large companies with multiple locations nationwide face the unique challenge of managing hundreds of vendors that help keep each facility running. In regards to landscaping, without a national or centralized approach to service, the vendor base eventually becomes bloated and can result in higher costs, less insight into annual spend, and increased risks. There are three core reasons for consolidating your commercial landscaping expense into a single vendor:
As with any cost management strategy, it’s not worthwhile to cut costs in areas that are strategically important to your business. Doing so can negatively impact the customer experience. But since regular lawn maintenance typically doesn’t directly impact the production of goods or management of services, it would behoove any company to seek reducing annual landscaping spend. A national landscape management program helps you achieve this goal in three ways:
1. Vendor consolidation
Any time you consolidate vendors a price reduction from your current expense should be negotiated. It’s basic procurement practice. At its core, consolidating your landscaping into a national account aims to help reign in costs that may have gotten out of control.
2. Elimination of hidden charges
Are your managers signing off on additional services that are not in the contract? A centralized landscape management program for your company helps eliminate additional charges that have been added to a property’s service, accidentally or otherwise. At NLM, we audit every landscaping invoice for each property to ensure you’re only paying for services rendered.
3. More effective vendor management
The administrative burdens placed on your staff for having to manage landscaping vendors takes time and focus away from working on your core business, which comes at a cost. Unless you’re in the business of purchasing landscaping services, there’s no need for employees to spend so much time managing these vendors.
Proper spend analysis gives you insight into how money is flowing through your company to help you make better strategic decisions. Clear indirect spend visibility, like your total landscaping expense, can be a real challenge with a decentralized approach.
Even if your procurement strategy leaves room for local site managers to decide which landscaping suppliers to work with, it’s hard to evaluate your total spend. A national account for landscaping services provides crystal clear vision into what your company spends on landscaping.
How are your current landscaping services incorporated into your risk management strategy? Are they at all? With so many different vendors servicing your locations, there’s an increased exposure to risks such as:
- Suppliers with no insurance
- Under-insured suppliers
- State & local tax issues
- Supplier liens and lawsuits
Consolidating landscaping needs into one, national provider helps reduce all these risks and indemnify your company from these risks.
There are three different options for commercial landscaping programs companies can choose from, each with their own unique approach to managing your specific needs.
Option 1: A nationwide company
Organizations seeking a commercial landscaping solution for all of their properties can work through a nationwide landscaping company. This type of service is managed by a corporate office with regional offices throughout the country that perform landscaping services for each property. This is a good option if your objectives include:
- Consolidation vendors
- Consistency of service
- One national contract
However, this option can be disruptive as each location would have to switch over to the new program and use that company’s services.
Option 2: Comprehensive Facility Management Service
For companies in search of a solution that goes beyond their landscaping needs, a facility management service is often ideal. Everything from HVAC to janitorial services to plumbing gets managed under one account. This approach focuses on the productivity of core business through effective delivery of support services. But the all-encompassing nature of facility management can also make for a disruptive transition.
Option 3: A landscape management service
The third option for a national landscaping program is a vendor management approach. This type of program takes your existing supplier base and consolidates it into a national account without making significant changes.
In fact, at NLM we encourage your property managers to maintain the current services they have if they’re satisfied. The challenge of getting buy-in from regional or location managers is eliminated entirely, and everything is consolidated into one account:
- One contract
- One invoice
- One point of contact
Onboarding is therefore simple and doesn’t intrude on existing relationships to landscaping providers.
is a national landscaping service right for your organization?
With an understanding of the different options available to consolidate your commercial landscaping needs into a national account, it’s time to decide which approach is right for your company. Two main factors will affect your decision:
- The organizational structure of your company
- The goals you expect to achieve
How your business handles its indirect spend across multiple locations is dependent upon the level of centralization, particularly within your procurement department. As noted in the ProcureCon Indirect West Whitepaper, centralized procurement models are much more common now.
The more centralized your purchasing process, the more appealing a nationwide company would likely be. A managed program, however, like those offered by NLM, is most beneficial for companies whose structure allows for location managers to decide which landscaping supplier to use with strategic initiatives being the responsibility of corporate decision makers.
Is your company searching for ways to reduce operational costs? Save time on administrative tasks for key personnel? You may want to consider a national landscaping service if your company seeks to achieve any of the following objectives:
- Reduce landscaping spend
- Reduce time spent on invoices
- Rationalize vendor base
Once you’ve determined your goals, the next step will be to collect data by analyzing your current landscaping spend to help inform your final decision.
Determining which route to go for your commercial landscaping needs at a corporate level is no easy task. Be sure to get the right people involved to help make the right decision for your organization that will yield the level of service and savings you expect.
NLM provides national landscape management services for companies with multiple locations nationwide and an annual spend of $500,000+. We guarantee a minimum of 2% reduction to your total landscaping spend. Contact us for more information.