In Facility Asset Management, Budgeting Should Be Proactive
Every organization is different, but eventually you’ll come to that point in the year when it’s time to start planning your budget for the road ahead. A variety of elements go into facility budgeting and planning, and a great deal of those elements are known to you as a facility leader. You likely already know:
- Facility and asset costs based on previous years
- The specific costs and needs of each location
- Ongoing requirements that can influence those costs
- Planned asset maintenance, improvements, or replacements
- Larger strategic initiatives that can influence all of the above
But just as you already know or have access to the above information, there are just as many factors, variables, and situations that you can’t plan for:
- Site-specific incidents (e.g. storms, fire, etc.)
- Unexpected asset downtime, damage, or failure
- Unidentified wear and tear on key assets
- Unplanned shifts in company policy or strategy
- Unforeseen shifts in budget or resources
While we hope none of the above occur, some of them are almost certain to make an unexpected appearance. After all, assets such as HVAC/R systems, lighting systems, electrical equipment, signage systems, fire & life safety systems, and more are all physical assets that experience usage, wear and tear, and exposure to the elements. Time of year and geographic location matter here as well — in the Midwest for example, Cottonwood can significantly impact the performance of commercial cooling equipment.
We can’t prevent the unexpected, and unfortunately we can’t pad our budgets with enough resources to offset whatever may come. However, what we can do is leverage a few best practices to start each fiscal year with the best possible budget based on accurate data and implement solutions that prevent unwanted situations or minimize their impact. Let’s dig into some of these best practices now.
Consider a Different Approach to Funding Asset Management
While this largely depends on your organization and its financial practices, consider evaluating larger asset needs and funding them from CapEx resources. For example, outdated or underperforming cooling systems present a significant risk in that, if left unattended, they could go down — forcing locations to close and lose significant revenue. When navigating facility budgeting, weigh the costs: is it better to address older assets now proactively, or address them only when an issue arises and leave the location open to risk?
Dig Into Program Data to Identify Trends and Opportunities
A common challenge in facility management is a lack of data and accurate metrics to measure a program proactively. Recently, we explored this topic in-depth — emphasizing the need for a strategic asset management partner that provides the tools and expertise needed to help you best understand your efforts. For example, are you able to assess your investment into certain assets — lighting, for example — at each location, over a specific time, and compare that against past time spans to identify trends or opportunities? If not, it may be time to take your facility management efforts to the next level.
Prioritize Improvements for Assets with a Long-Term Impact
While you have a number of assets to consider in your facility budgeting process, there’s one thing that’s consistent across every single location: lighting. From indoor lighting to exterior building illumination and parking lot lighting, there are dozens — if not hundreds or even thousands — of lighting assets at each of your locations. Lighting is often one of the largest contributors to energy expenses, so it is always worth evaluating this specific asset to understand if some locations are due for retrofitting, illumination surveys, and other necessary maintenance. Investing in lighting early will yield long-term rewards and help to improve sustainability efforts as well.
Never Underestimate the Value and Input of an Experienced Partner
If you’re not managing your assets through a facility management aggregator, you’re missing out on a number of operational and financial benefits. First, the obvious: an aggregator manages virtually every aspect of your program, helping you to consolidate service vendors, reduce administrative headaches, and ensure consistent quality. But an equally valuable benefit is that the right partner will participate in facility budgeting and strategy planning to ensure your organization is prepared and ready to make the most out of those dollars.
Let’s Improve Your Bottom Line, Together
CLS Facility Services has been partnering with organizations across multiple industries for more than 50 years. As a facility management aggregator, we work with leaders just like you to help them plan more strategically and execute programs more efficiently. As your facility budgeting partner, we’ll assist you every year with analysis and reporting on how assets are performing by location and provide insights and recommendations to help you make the best use of your facility management budget as possible. Don’t leave this important part of the facility management function to chance — work with a team that’s committed to your success 24/7/365.