Facilities and Operations Management

The problem this addresses

Most organizations can tell you what they spent on facilities last year. Very few can tell you whether that number was reasonable. The budget exists, it gets approved, and the only real test applied to it is whether it went up more than expected. That is not a management process, it is an accounting one.

The difficulty is that facility management costs resist simple comparison. Two buildings of identical square footage can legitimately differ in operating cost by a wide margin because of age, systems, hours of operation, climate, occupancy density and use type. So the benchmark that gets quoted at a conference is rarely the benchmark that applies to your building, and everyone involved knows it, which is why the comparison usually gets abandoned.

What we actually do

We normalize. The first phase of the work is establishing a defensible cost per unit for your operation with the specific drivers isolated, so that when a comparison is made, it is a comparison of like against like.

• Rebuild the true operating cost from the ledger, including the costs that are booked elsewhere: utilities in a separate account, capital work that is really deferred maintenance, staff time charged to other departments.
• Separate fixed from variable, and controllable from structural. A great deal of what gets presented as inefficiency is a building doing exactly what a building of that age and type does.
• Break down the service delivery model: what is in house, what is contracted, what is neither and is quietly being absorbed by someone whose job it is not.
• Map the maintenance mix. The ratio of planned to reactive work is the single most diagnostic number in the discipline, and most operations do not know theirs because reactive work is often not recorded as such.
• Identify the addressable gap, priced, ranked, with the effort and risk of each item stated alongside the saving.

What the findings usually look like

The results are rarely dramatic and almost never a single large discovery. They tend to be an accumulation: a service contract with scope that no longer matches the building, a maintenance schedule inherited from a previous system that has crews servicing equipment that was replaced, a staffing model built around a footprint the organization no longer occupies.

What we need from you

Two to three years of operating budgets and actuals, the current service contracts, work order history in whatever form it exists, utility bills, and a walkthrough. The document review does most of the work. The walkthrough exists to explain the discrepancies the documents surface.

Related reading

The second largest line item nobody reviews covers the reasoning behind this practice area in more depth, and deferred maintenance as an implicit loan explains why cost comparisons that ignore condition are misleading.