Agile budgeting now a top strategy for reducing TCO in facilities management.
The budget makes up the dominant cost in facilities management, and therefore, total cost ownership (TCO) as well, as noted by a SlideShare presentation. Deferred maintenance might seem like the best option when a problem arises, but it only temporarily fixes a problem. If left unchecked, deferred maintenance will result in higher long-term repair costs and dramatically increase TCO of facility assets. Instead of putting things on the backburner with deferred maintenance, think about these ways agile budgeting can help reduce TCO.
Use Performance Data to Create a Predictive Maintenance Schedule
Asset performance has hidden potential in identifying when an asset is likely to fail or appears to be approaching a point of lowered efficiency. Using predictive analytics, Facility Managers can review performance and adjust the maintenance schedule to include items that are likely to fail following a prescribed series of a set. This reduces the TCO of assets by making repairs before they become major costs, like needing to replace an entire unit after running thousands of hours with clogged filters.
This part of agile budgeting focuses on prioritization of maintenance needs to correct those that contribute to a higher TCO first, and categorizing the budget according to maintenance needs, explains Isaac Hogue of LeadingAgile.com. For instance, it may be okay to delay maintenance one week on a unit that was recently repaired, or it may be appropriate to consider replacing the unit and delaying minor repairs of other assets for a short-term. The key to preventing slight delays from becoming major costs lies in avoiding the continuous cycle of delaying items repeatedly. A good rule of thumb is that a repair should never be delayed twice, and review asset data before deciding to delay it for a short-term or repair it immediately.
Divert Unused Budgets to Address Delayed Items
It is easy to simply return unused portions of the facilities management budget after using agile budgeting, but this can be a false safety net during initial implementation. Rather than simply requesting a smaller budget after implementation, keep the remainder for potential emergencies and to address items that are delayed. The premise behind agile budgeting relies on variability between months, and savings in certain months may allude to potential costs in others.
After implementing a platform or system for managing all facility assets, budget planning should consider that some maintenance needs may become evident more than what was originally anticipated. These costs are not indefinite, and overall facilities costs will decrease the efficiency of all assets increases.
Gain Control Over TCO With Agile Budgeting Now
From extending the useful life of critical equipment to repairing or replace decisions when things go wrong, agile budgeting contributes to better control over TCO of facility assets.