Business intelligence for accurate facilities management budgets
He’s the director of facilities management (FM) at a large grocery chain and was just informed that his budget could be reduced due to cost-cutting companywide.
He has one week to prepare a case for saving his budget. He knows that industry sources expect increases in material and labor costs during the coming year. Budget cuts would exacerbate any unforeseen break-fix costs of essential equipment, like ovens and cold storage.
Jason has a problem.
Without access to maintenance histories or costs, he’s unable to identify assets vulnerable to breakdown and can’t assess the impact—including lost revenue—of equipment failure.
However, if Jason had been using professional facilities management software with business intelligence (BI) capabilities and dashboards, he’d have a much easier time building his case.
BI dashboards show Jason, senior leadership, and other stakeholders the costs associated with repairing/replacing the ovens and refrigerators most likely to fail.
Jason has a solution.
The best part is that Jason doesn’t have to lift a finger to research, find, organize, and analyze the thousands of data points used by business intelligence. It happens automatically in the background and will continue to do so every month.
Results are presented in engaging visual dashboards offering high-level visibility to stakeholders along with details for those who need them. Budget saved, Jason.
How BI informs budgets
Per the white paper, “The CMMS Solution to Facilities Management,” FM is often the second-largest corporate expense after payroll.
Before BI, facilities managers (FMs) were unable to crunch months of data pulled from multiple sources to create compelling stories justifying multi-million-dollar budgets. Here’s what often followed:
- FM budgets went underfunded
- Senior leadership was unaware of the true resources needed to maintain their FM portfolio
- Wishing to cover losses or avoid layoffs elsewhere in the organization—and due to the ease of deferring maintenance—leadership cut FM budgets even more
- With less funds available, maintenance became more reactive, which in the long run was more costly, more time-intensive, and more hazardous
With BI, however, FMs have solid numbers from one centralized database to advocate for the funding their FM operations deserve. The visibility of BI dashboards gives all stakeholders, especially leadership, a clear understanding of the funds and resources required to fully maintain their facilities.
An FM budget, informed by BI, enables teams to catch up on years of deferred maintenance while transitioning from reactive to preventive maintenance and becoming more efficient. More importantly, when FMs use BI data to substantiate their budgets, leadership is less inclined to raid the budget to fund other expenses or initiatives.
Staying within budget is an important FM metric
Some FM practitioners would argue it’s the most important metric because it’s a proxy for the performance of the FM team. The persistent view of FM as a cost center creates an imperative for cost containment.
That’s difficult to achieve when there are no BI dashboards offering visibility into work orders, vendors, assets, and workflows—collectively, the factors that can be optimized for time- and cost-savings.
With BI dashboards, however, FMs can identify underperforming and/or costly assets and take corrective action for more efficient FM operations. Dashboards also make it easy for other departments, like finance, accounting, procurement, etc., to see the metrics they need most for their own reporting.
BI data illuminates overspending. It also spotlights workflow bottlenecks where simple streamlining would save time to free up FM teams for higher priority work. BI delivers a bundle of benefits and raises the role of FM from cost center to value-driver.