Not-to-exceed (NTE) limits are set by facilities management (FM) requesters as part of the work order. NTE limits establish the maximum amount a requester will pay for a particular job, with overages having to be justified by the service provider and approved by the requester.
Facilities leaders rarely dig deeper into these NTE amounts or the economics behind them, leaving money on the table. What are the NTE scenarios your FM team faces, and how can the wrong strategy cost your organization money?
Setting NTEs too high
NTEs are often set by facilities teams based on gut feelings, experience, or basic data—data that doesn’t typically include regional or market-specific information. Without market intelligence, historic data points, and a system to track what a given job should cost, you may be signaling to your suppliers that you are willing to pay more than what they would normally charge for the work.
For example, a reactive work order to fix an air conditioning unit in Texas in July will likely have a different cost than repairing the same unit in Minnesota in December. With a default NTE amount that is set higher than necessary, you are more likely to find yourself in a scenario where you overpay for FM services.
Setting NTEs too low
Some FM teams may be too stringent and set low NTE amounts to signal their service providers they want a low price or to ensure that any potential NTE overage is reviewed and negotiated with a vendor every time. While this approach can save money on a per-work order cost, it also requires personnel hours to go back and forth with vendors, and it could cost valuable time in performing the requested work.
How does an organization manage maintenance costs across their portfolio without having to touch every single work order? Corrigo’s Smart NTE system answers this question. Smart NTE uses real-time AI to automatically set NTEs based on cost, specialty, season, geography, asset model, specific task, and more. Smart NTE can help you stay within budget and even save money on work order costs.
With Smart NTE, FM teams can:
- Save up to 10% on reactive work: In-the-moment AI suggests NTEs specific to each work order
- Reduce work order touches: Save resource hours by setting a higher NTE level, or drive down your bottom-line expenses by increasing your quote rate
- Never waste time or money on NTEs again: Leverage expansive industry, specialty, and geographic data to set and adapt NTEs to manage costs and operational expenditures
How much money can Corrigo Smart NTE save? According to a Total Economic Impact™ study conducted by Forrester Consulting, users of Smart NTE saw a 5.23% reduction in invoice costs and a projected $1.1M savings in three years.
If being smarter with your facilities budget is important to you, contact Corrigo today to learn more about Smart NTE and Corrigo’s other powerful features.