Has your organization been asked (required) to cut its facilities operating budget? The usual reaction is, “We can’t cut it any further without degrading the facilities.” How do you really know unless you can compare to some similar buildings and see how they are doing? When budget cuts are coming your way it would be really great to know how other facilities are managing their maintenance costs. Maybe some are operating just fine on less or maybe what is being requested of you will result in an operating cost that’s lower than anyone else, which is not a place you want to be. Wouldn’t it be really helpful to explain this to management in a focused, rational way? Direct comparisons with a valid peer group would be very valuable and appropriate in making the correct decisions.
What we need is benchmarking data to compare how your organization is managing major expenses like maintenance costs. But when budget cuts come around, there may not be enough time to develop a rational response or defense. You don’t have time to collect and input data for a benchmarking survey. What is really needed is a table or chart showing the maintenance cost comparisons with a good peer group. Well, there are some tools available to answer these questions. Let’s look at some of the options.
Let’s start with the Key Performance Indicators (KPIs) for maintenance. The usual KPI for maintenance is COST PER GROSS AREA. That KPI shows how your costs compare with others. But comparing your maintenance costs with everyone else may give you the wrong perspective on your performance unless the comparisons are made with a relevant peer group.
FM BENCHMARKING has just come up with a LITE version, which can be used to create a chart showing the MAINTENANCE COST PER GROSS AREA of a variety of peer groups—one should be a close match to yours. Figure 1, for example, is a chart showing the comparison for large office facilities (your peer group). The first thing that really stands out is that the first few buildings on the very left of the chart are operating at a cost level that is not sustainable for any extended period of time. When budget funds are restored they will be spending a lot to restore their facilities to a proper operating condition.
Provided courtesy of FM BENCHMARKING.
Filters: Type of facility (Office), Size of facility > 600,000 GSF
Figure 1 allows you to see at a glance how well your facility is performing its maintenance functions. There are 171 buildings in this peer group with a median maintenance cost per GSF of $2.23 per GSF and a first quartile performance of 1.84 per GSF. By looking at, and comparing similar types of facilities, you will be able to make intelligent “data driven” decisions. The Facility Director, for this example, has calculated her maintenance costs at $1.79. This is a good first quartile performance. But there is still the budget cut request so what could safely be offered? Well, it looks like about $1.57 is the lowest “safe” operating costs before the chart really falls off to the unsustainable area.
Are there other ways to compare performance? Sure. Let’s look at how we compare, for the same building filters (large office buildings), maintenance staffing levels. The KPI with maintenance staffing is AREA MAINTAINED PER FULL TIME MAINTENANCE WORKER (see Figure 2).
Provided courtesy of FM BENCHMARKING.
Filters: Type of facility (Office), Size of facility > 600,000 GSF
Figure 2 shows the median area maintained per worker is 61,538 GSF with a first quartile (working right to left in this case) of 63,274 GSF. The facility director, in this example, calculates her maintenance workers performance at 60,125 GSF per person. It looks like the staffing is appropriate so budget cuts shouldn’t come from staff reductions.
As you can see, from this example, a tool such as FM BENCHMARKING LITE can help you see where you stand in a very quick and easy manner. If your facility performance is in the third or fourth quartile you may need to investigate and benchmark further to determine the next steps to take. Often, this involves studying the best practices employed at your facility and then comparing them to those employed at better-performing facilities. Previous articles in this section of FMLink provide examples of this.