Why Cost Planning at the Asset Level Matters
Previously, we focused on what is required in developing a maintenance budget for assets across all of your facilities. As a facility management leader, you likely already have a strong budgeting process and framework in place, but there is always room for other perspectives that might shed light on improvement opportunities.
Soon, we’ll be exploring how to optimize your maintenance budget, but we first need to review cost planning and estimating for facilities maintenance — specifically at the asset level. Think HVAC/R, lighting, electrical, plumbing, signage, fire and life safety, and others. An understanding at this particular level is critical because apart from other elements such as structures themselves and cleaning services, these systems will likely represent a significant part of your overall budget.
True cost accuracy comes from understanding specific information about these assets, such as overall condition, where they’re at in their respective lifecycles, and previous service performed as well as future service requirements. Combining this information with knowledge in its meaning for budgets will help you gain predictable, defendable, and data-driven figures that can be reliably used for cost planning and estimating — whether for specific or unplanned situations or as part of an annual budget planning process.
1. Develop an Asset Inventory
Hopefully you have a database of all of the above mentioned assets across every location within your footprint. If not, make that an urgent priority. A centralized, accessible database of all assets — with asset-specific information such as warranties, age, condition, and service history — is the foundation for any future facilities maintenance cost planning and estimating. The absence of this is often why many facilities leaders fail to accurately plan costs — asset records either don’t exist or aren’t updated. Here is a helpful guide on what should be included in a facility asset maintenance database.
2. Use Data to Create Baseline Cost Models
This sounds like it would be a straightforward process, but a deep understanding of each asset type is important. For example, in HVAC/R, you’ll want data on whether work was seasonal preventive maintenance or a reactive repair. You’ll need to understand costs tied to parts and work types, such as compressor failures, refrigerant costs, energy utilization, component lifespan, and more.
For lighting systems, does the data reflect whether work was cleaning, an inspection, testing, or a repair? Is it specific to lighting components, such as ballasts, drivers, sensors, and fixtures? Are you able to tell whether other financial factors are at play — utility rebates, labor, energy reductions, etc.? The database will go a long way in your ability to build these models.
3. Understand Lifecycle Implications
Assets will age and ultimately fail. It just happens. But do you know the manufacturer lifespan for each asset type? Do you know where current assets are in that cycle, along with how they’re currently performing? This information will allow you to pinpoint when assets are most likely to fail and whether they’re running at subpar levels. With this data, you can make informed decisions about whether you should proactively replace the asset sooner rather than later, or allow it to run-to-failure (RTF). The risk is clear here: without any insight into the assets themselves, any decisions made would be at best a shot in the dark. And if an asset breaks down early, you’re going to have a surprise expense.
4. Build Preventive Maintenance Cost Profiles
Preventive maintenance cycles must be built into your budget. It is best to understand this according to each trade. For example, with HVAC/R, preventive maintenance frequency will vary by climate, unit type, and whether service vendors offer multi-unit discounts. Other trades such as lighting and plumbing will have frequent and consistent maintenance needs as well. However, FLS systems have mandated maintenance frequencies. Breaking this down by trade will give you a better understanding of the associated costs.
5. Include Energy and Efficiency Impact
Sustainability has become a more significant focus for facility leaders across every industry. This plays a role in cost planning and estimating for facilities maintenance budgets. Understanding the energy impact of aging systems as well as the opportunities available with utility rebates, manufacturer incentives, and more should be a priority to help you understand and quantify payback periods for replacements or retrofits.
Get More on Facility Asset Maintenance Budgeting
Get these recommendations and many more in our latest guide. At CLS, we partner with our clients on their cost planning process and overall facility management budgeting needs every year. From CapEx HVAC management to proactively identifying retrofit opportunities across hundreds of locations, our team serves as a strategic advisor to your team.
As an aggregator, we handle the administrative and coordination work for every trade — ensuring proven vendors are working on your locations, upholding their service commitments, and providing you with all the information you need to keep moving forward.
We hope the recommendations in this guide were helpful to you. Please reach out if you have any questions or if we can assist you with your facility asset maintenance strategy.