Facilities Managers have a mountain of responsibilities, and while new technologies have risen to streamline facilities management, many continue to overlook the potential value of benchmarking for facility costs. The best-laid plans for reducing facilities spend are only as strong as the comparison of savings among a company's peers. Facilities Managers need to understand the indispensable role of benchmarking for facilities costs avoidance and how the right facility metrics can help.
Facility Costs Continue to Rise
Cost avoidance can sound like a simple concept. On the surface, it deals with reducing facilities spend and avoiding unnecessary costs. However, the key to understanding cost avoidance goes back to understanding its foundation. Facilities Managers must know where they stand with current spend and what cost avoidance actually means, explained by the National Association of State Procurement Officials (NASPO).
Cost avoidance is defined as the combination of cost savings and providing for cost reduction opportunities using cost analysis and benchmarking activities to establish ongoing best practices.
Benchmarking for Facility Costs Reduces Spend
Benchmarking is about measuring existing stand and comparing it to other companies, and in facilities management, benchmarking for facility costs gives Facilities Managers the opportunity to review current spend and how it compares to similar companies. According to Service Futures, benchmarking of facility costs is essential to knowing which costs can be brought under control. In other words, continuous benchmarking of facilities assets gives companies the ability to realize where operations can be improved to bring costs closer to industry averages.
Benchmarking for Facility Costs Avoidance Metrics to Use
Benchmarking for facility cost avoidance requires a data-intense approach to management of facility assets and activities. Some of the top metrics to use in benchmarking for facility costs avoidance include:
- Utility consumption costs. Utility consumption costs should also include costs broken down by type of utility, such as natural gas providers, electric companies and Wi-Fi servicers.
- Maintenance costs, including corrective, scheduled and exceptional costs. All maintenance costs should be considered in determining areas where costs can be avoided. In other words, Facilities Managers need to know how much maintenance is made up of reactive and proactive support and what areas are susceptible to unforeseen problems.
- Janitorial costs. Although janitorial expenses may not seem like a significant factor, properly cleaning facility assets is essential to maintaining their life expectancy. Facilities Managers need to know how much they spend on janitorial supplies and labor.
- Security costs. Security costs include both the cost of maintaining cyber security for a facility and its physical security.
- Landscaping and grounds maintenance costs. Grounds and landscaping costs also affect facilities spend, so knowing where to reduce spend on outdoor areas can dramatically improve the curb appeal, and lower facility spend.
- Administrative costs. Every facilities management department comes with administrative costs, like the salary paid to Facilities Managers and the cost of using a CMMS.
- Lease costs. All lease costs, including costs associated with maintenance and documentation, should be included in the consideration of benchmarking for facility costs
Implement Your Benchmarking Plan Today
A robust benchmarking plan will consider all available data and determine which needs have a higher priority and what areas can generate the highest return. Those that avoid benchmarking for facilities costs avoidance will face higher spend and increasing the scope of their projects. Restore trust in your facilities management data by benchmarking for facility costs with QSI Facilities. Contact QSI Facilities by submitting your query online or calling 1-888-328-2454 now.