Commentary: The top five service areas facilities managers overspend on are…
Whether you run a retail business or a healthcare organization, your maintenance and facilities management (FM) budget probably eclipses many of your organization’s other expenditures.
And although FM budgets vary from one organization to the next, it’s safe to say that a staggering amount of time, resources and manpower go into maintaining multi-site businesses of all types and sizes. As a result, it’s vital for leaders to figure out where wasteful expenditures are occurring so they can attempt to salvage and funnel these funds toward more worthwhile projects. Or, they may want to bank the savings and boost their bottom line. Either scenario is a win for the FM department and for the company at large.
Here are the top five FM service areas to focus on when assessing your organization’s (over)spending habits:
Mismanaging Your Budgeted Spend
Nothing will help you avoid overspending quite like a properly planned, well-informed budget. But even the best intentions can lead to flawed budgeting practices, especially when organizations slash their not to exceed (NTE) limits. Trying to control costs through lowering NTE values seems logical, but it often leads to repeat service visits and higher labor costs.
This issue is compounded when companies budget based on hourly rates rather than work order averages. Establishing benchmarks that dictate how much a given work order will cost can not only save you from exorbitant hourly rates, but it can help you create a more nuanced budget.
For example, if a contractor charges 100 dollars an hour and it takes them one hour and fifteen minutes to replace a broken toilet, the cost of labor will likely be rounded up. However, with an established benchmark of, say, 75 dollars per toilet replacement, you will not be held accountable for extra time spent on the task. You’ll also be better positioned to budget for these types of repairs in the future.
Improper Asset Management
Managing your facilities’ assets requires some pretty tough judgement calls: When the HVAC system breaks down for a fourth time, do you repair it (yet again) or replace it altogether? While new FM equipment typically comes with a hefty price tag, it can be beneficial to replace failing or outdated systems rather than continually paying for repeat repairs. With the help of a holistic FM platform, you can track your asset history, which gives you precise insights into how much time and resources you spend servicing each piece of equipment at each site you operate.
Funding Maintenance Already Under Warranty
Part of understanding your assets is understanding whether or not your equipment is covered under warranty, and if so, for how long. It might sound like an obvious or easily avoidable issue, but retailers and facilities professionals frequently pay for repairs, replacement parts or maintenance services that should technically be provided at no cost. Check the terms of all your purchases to determine which items may, in fact, be covered under a warranty agreement. By utilizing FM technology, you can easily track warranties and other asset info—using whatever unique identifier you’ve selected for each asset, you’ll be able to search for details related to that asset, allowing you to get a jump on which warranties are due to expire and when.
Similarly, hidden or overlooked clauses within your lease agreements could wind up costing you if you’re not careful. Review any active lease agreements to ensure you’re not paying for repairs or services that should technically fall under your landlord’s purview.
Vendor Tech Fees
In exchange for using their platform or portal, some FM vendor partners charge a “tech fee” on top of the other FM services or products they provide. From the facilities professional’s perspective, it’s pretty clear that paying extra for the simple use of a web portal isn’t ideal. However, FM solutions providers that prioritize the client experience choose not to tack on additional fees for the use of their technology. This lightens the facilities manager’s load, and enables them to pocket those dollars they’d otherwise be squandering on unnecessary tech fees.
Misinformed Maintenance Schedule
Creating a well-researched and carefully considered maintenance schedule is key to keeping FM costs down. In many cases, that means you should resist the urge to cut corners. For example, it may seem like a good idea to forego monthly floor cleanings for quarterly ones, but in the end, the money you save in the short term ends up costing you in the long term. Skimping on routine maintenance—or eschewing it altogether—will lead to projects taking longer (and therefore costing more) when they are finally tackled. Facilities that adhere to a tight schedule will fall into a rhythm that allows them to maintain their business, while anticipating future expenditures and allocating funds accordingly.
Projects that fall under the facilities team’s purview are sure to be complex and costly, but also vital to any organization’s ultimate success. By taking stock of your FM budget, schedule and repeat expenses, you can be sure to avoid overspending and hold on to more of your company’s capital.
Alexandra Bonanno is director of product development and training, Nest Multi-Facility Management.