How Can Facility Managers Manage The Rising Facility Operational Cost?

Facilities management has become a very technically challenging job in the last decade, especially owing to the technical advancements and the growing intricacies. Their managers find the task of managing the operational budgets challenging owing to the ever-changing landscapes. 

The modern-day facility managers have had to shed the old-school thoughts they had about facility management and have to be more conscious of managing the overall operational costs. Unfortunately, no facility manager knows the ideal cost because of the uncertainties involved. So, they are expected to be practical and flexible to ensure that their facility costs are optimised without impacting the performance. 

This article discusses the key ways facility managers can tackle the rising facility operational costs. 

Ways to Manage the Facility Operational Cost

A lot of costs in facilities, such as OPEX are unavoidable. However, planning these activities and expenses around them better can alleviate them from unwanted errors and instances of improper management. This, in turn, also results in operational cost reduction, which every facility manager aims for. 

Here are some meaningful ways managers can tackle their rising facility operational costs - 

Going from Reactive to Predictive 

Being proactive is one of the key pillars of achieving facility operational cost optimisation. One of the best ways to be proactive is by getting rid of reactive maintenance and focusing more on being preventive. It necessitates the creation of a facility maintenance schedule which is dedicated to finding issues upfront. It would prolong equipment life, reduce unwanted downtime and also propel facilities to lessen instances of costly repairs. 

 For this, FMs have to devise a comprehensive maintenance schedule that involves proper and timely checks, cleaning and PPMs. In addition, they should also facilitate the creation of automated documentation to track these maintenance activities, assess equipment performance and set up KPIs to understand the effectiveness of this schedule. 

Optimising Utility Expenses Management

Utility costs form a major portion of any facility’s operational expenditure. So, a major part of operational expense management is to handle energy costs properly. For this, facility management teams have to chalk out effective strategies for energy savings and find ways to implement cost-effective solutions without affecting the overall performance. 

A lot of facilities have now started depending on smart building systems, which gives them the liberty to manage their heating, lighting, and cooling based on occupancy patterns and requirements. The usage of automated HVACs, along with energy-efficient lighting solutions, such as LEDs, not only improves the overall life of these assets but also helps the management reduce the facility operational costs. Pair them with the inclusion of renewable energy resources, such as solar, and the facility is ready to save more on its energy and utility costs in the long run. 

Create an Asset Management Roadmap

Asset plans that prioritise security and timely actions can be vital for you to manage your towering facility operational costs. For example, installing a new security system that gives you better control of your workplace’s security and is better at proactively telling your security-based shortcomings can be an invaluable addition. 

Most facility assets would require service and replacement in the future. So, FMs are required to create an asset management roadmap that enables the team to make more informed decisions and prevent unwanted expenses. For more information on asset management, read our article Asset Life Cycle Management in Facilities Management (FM) - Effective Ways to Improve Asset Life

Outsource to the Experts

Energy usage, janitorial services, security and equipment repair - an FM has a lot on their table. Thankfully, they do not have to handle them all on their own and can outsource a few of these key responsibilities to third-party experts like ISS Facility Services India Pvt. Ltd.

When you are trying to optimize facility operational costs, you need to tighten up and find the right balance between costs and performance. It’s unlikely that your in-house team has expertise in all the facility management tasks. So, you can start by doing a full assessment of your in-house team and find tasks where they have been struggling or are time-consuming. Once you know your strengths and weaknesses, it becomes easier to find the right outsourced partners for managing your facility's operational costs. 

Data-driven Decision-making

Facility managers today use technology and automation to manage the rising facility operational costs. They have realised that finding and implementing the right data solutions can not only save costs but also improve productivity and streamline operations. For example, facilities can benefit massively by inculcating a CMMS (Computerized Maintenance Management System) like Factech Automation Solutions to automate several operational tasks and set up alerts for proactive maintenance. 

In addition, modern-day facilities are also implementing smart solutions, such as IoT and automation systems, to generate insightful data about the workplace. FMs can use this data to manage their facilities better, optimise energy usage and find ways to handle operational costs better.

Renegotiating the Vendor Contracts

Procurement is one of the major functions of an organisation and streamlining it is vital for optimising facility operational cost. Organisations can reinforce better relations with their vendors to ensure an uninterrupted supply of raw materials and supplies necessary for a facility’s smooth functioning. 

In addition, they can delve deeper into their contractual terms with their suppliers to figure out the scope of improvement. For this, they can also use automation and work in tandem with the vendors to renegotiate better terms for themselves without affecting the uninterrupted supply.  

Optimising Employee Productivity

Your workforce’s performance is the deciding factor for your facility’s performance. So, FMs have to inculcate a continuous improvement culture to ensure the workforce continues to curb the rising facility operational costs. For this, they have to set up key KPIs which are used by the best in the industry and improve the performance with the benchmark. 

Tracking performance continually also showcases inefficiencies and areas of improvement. Facility businesses can use this data to establish best practices for their workforce and streamline their efforts to ensure optimal productivity. It not only enables them to deliver superior results but also paves the way for holistic operational cost optimisation. Read this article on improving productivity How to improve employee productivity in facility management.

Conclusion:

Operational cost optimisation of a facility is not only about reducing costs; a facility manager also has to decide where more investment is required to tackle future expenses and aspects that can be outsourced for better performance and cost efficiency. 

FMs can curb the rising facility operational costs by understanding areas of improvement and chalking out a robust cost-reduction strategy. Once established, the entire team should realise that these changes are not a one-time exercise and will require them to follow these to maximise the facility’s performance diligently. 

Outsourcing services which are beyond your core competence is another vital way modern facilities are managing their operational costs better. Irrespective of the size of the business, you can find effective third-party experts at YFMM who can be crucial additions to your facility and effortlessly enable you to ramp up your performance.