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The biggest challenge faced by facilities departments is contending with lower budgets, while still maintaining standards. Our buildings do not generate revenue, but can most certainly affect the “bottom line.” Short-term, band-aid solutions are often implemented instead of strategic long-term maintenance programs because facilities departments can't justify the expenditure. Poor visibility into the reasoning and an ill-defined work flow slows down the decision-making process and weakens the ability to justify and control spending.

 

DEFINING PRIORITIES AND CREATING A DEFENSIBLE CAPITAL BUDGET

Long gone are the days of "guesstimating" your facility's capital costs and maintenance priorities. We live in a world where data drives decisions. Your CFO expects accurate, data driven budgets and transparency of details. By utilizing a Long-Range Asset Management Program, you can not only provide full visibility into your facilities' priorities and costs, but you can also forecast the cost of deferring maintenance & capital expenditures. By providing accurate budgets for maintenance and capital projects based on the actual conditions of your facilities, you align your facility goals with the organization's strategic objectives.

 

THE 5 STEP PROCESS

1. Establish Relationship. In order to develop credibility with the key financial decision makers, you will have to know how the CFO thinks. Find out what their financial "hot buttons" are and use metrics they are used to seeing. Instead of "presenting" your case, explain that you have valuable information that would impact their business unit's financial measures.

2. Identify Needs. Survey and assess your facility's roofs, walls, and/or pavement to determine their condition and document any deficiencies.

3. Formulate Solution. Compile the data gathered during the assessment into a prioritized program based on Facility Condition Indexes, replacement values, & remaining useful life.  Develop an actionable long-range asset management plan that will align facilities goals with your organization’s strategic objectives for maintenance and capital projects to help you properly allocate funds and mitigate risk.

4. Pitch Your Case. Presenting to the C-suite requires facilities departments to have a good awareness of what their decision making needs are, which include internal (e.g. the company mission and overall strategy) and external (e.g. funding and the state of the market) influences. Know your data, but more importantly, know how to put your data into a context that the CFO can relate to. Present your project's finances using specific equations that reflect the way a CFO views facilities and related expenses from an accounting standpoint. Distinguish whether the project will produce savings, reduce expenses, or mitigate risk.

5. Track Performance. Measure the results of your efforts and translate it into financial language. Use the data to illustrate the effectiveness of past projects so that future projects won't be questioned. A successful track record will continue to help build credibility with financial decision makers.