Facilities Managers face a budget crisis. The energy portion of the facilities management budget is shrinking year after year, and the average costs of energy, maintenance, and facility amenities are steadily increasing. Instead of trying to endure shrinking budgets, Facilities Managers should take steps now to evaluate and set a practical, workable energy and facilities management budget with the right processes, technology, and data-driven methodologies.
What’s Wrong With Traditional Energy and Facilities Management Budgeting
The biggest problem with today’s level of energy and facilities management budget planning processes derives from poor visibility. Poor visibility contributes to lost opportunities to save money and recognize efficiencies. If the Facilities Manager cannot see the costs and issues affecting a given process, it is impossible to make improvements to eliminate it. Moreover, Facilities Managers fail to realize the potential applications of energy management for non-energy activities, such as maintenance, customer service, and guest comfort. As explained by FacilitiesNet, the high incidence and general practice of deferred maintenance continue to be a driving force of poor budgeting. Maintenance needs are postponed to avoid extra costs, but they only add to the overall cost either way and can negatively impact brand image.
Connected, Integrated Systems Enable Better Energy and Facilities Budgeting
Utilizing integrated systems can help Facilities Managers improve capital planning processes and determine whether the current budget is workable in current conditions. In other words, new improvements to the facility management operation, such as deploying smart sensors connected to the Internet of Things (IoT) to track energy use an asset performance, can lead to a reduction in energy costs. Additional benefits of such improvements include reducing maintenance frequency, lowering the risk of disruption to customer service, improving safety, and better capital planning.
Best Practices to Evaluate and Refine the Energy and Facilities Management Budget
Facilities Managers that wish to evaluate and refine the current energy and facilities management budget should follow these best practices:
- Start planning the energy and facilities management budget during building design. When designing a building, consider energy and facilities management budget use cases, such as installing smart sensors and other technology within and on assets, such as the roof and HVAC system, to gain end-to-end visibility.
- Identify opportunities for improvement. It is not always possible to start work in a brand-new facility that's currently under construction. Facilities Managers should identify opportunities for growth, such as higher energy costs, increased rate of maintenance and decreased customer service levels.
- Determine actual costs of reactive and deferred maintenance. Deferred maintenance is a common problem in today's facilities. Unfortunately, deferred maintenance costs much more than Facilities Managers know, to the tune of the squared original repair amount.
- Retrofit facility assets with smart sensors. Retrofitting the facility with smart sensors is another effective way to generate and gather data throughout the facility. Furthermore, it is essential for Facilities Managers to implement a system to track this data for the application.
- Keep maintenance on-schedule, eliminating the maintenance backlog. Implementing a preventive maintenance (PM) program will reduce the addition of new items on the maintenance backlog. However, facility managers need to know that implementing such a program will increase short-term maintenance spend as items on the maintenance backlog are addressed.
- Integrate data analytics that produces actionable insight to understand how energy cost avoidance translates into non-energy benefits. Utilizing an integrated data analytics platform is crucial to helping Facilities Managers understand how cost avoidance translates into non-energy benefits, including improved customer service levels and better maintenance planning.
Increase Your Capital Planning Processes Now
The right capital planning processes can help Facilities Managers make meaningful improvements in their operation and augment cost avoidance strategies.