Facilities Budget Leaks

At the start of a new financial year, many facilities teams are evaluating expenditure. If you’re looking back on the year that was and wondering “where did our budget go”, these are some common “leaks” that can drain a facilities budget.

Over reliance on reactive maintenance

Reactive maintenance plays an important role in facilities management, however, over-reliance on reactive maintenance can be a drain on resources. While for some assets, waiting until they break before conducting any maintenance could be cost-efficient, this isn’t always the case.  

For many individual assets, reactive maintenance comes at a higher overall cost than regular planned maintenance. When maintenance is reactive, call out fees for trades, last minute sourcing of required parts, and unexpected downtime add to total maintenance costs.  

In contrast, planned maintenance offers greater budgetary control. Works can be scheduled in advance at off-peak times, minimising interruptions and reducing call out fees.  

For some assets, engaging in planned and preventive maintenance can reduce overall expenditure over the long term.  

Wasted contractor hours

Many contractors charge by the hour for their services, and are entitled to be paid for any time they spend on site. This includes when they arrive, only to have to wait for important details before they can start work.  

Precious dollars from the budget are wasted when contractors have to be paid to wait around for details that could have been provided in advance. In the first instance, this expense might not blow out the budget, but as a pattern of behaviour, it can be extremely detrimental to the bottom line.

To minimise wasting billable hours, it’s important that contractors have the information they need before they arrive on site. Information on the asset, job details, required inductions, and information like sitemaps being delivered alongside a work order can help to minimise wastage of billable hours.  

Poor repair vs replace decisions

Throughout their useful life, it is likely that your assets will require repair, and eventually, all assets must be replaced. The decision to repair or replace an asset should be based on information like maintenance history, age of the asset, and associated costs of each option.  

For many organisations however, it is difficult to access an accurate maintenance history for an asset. This can result in over-investment in repairs for an asset that would be better off replaced. While in many cases it is more economical to repair an asset, continually repairing the same asset can be throwing good money after bad.  

Similarly, prematurely replacing an asset, when it could have been repaired, is a poor use of limited funds. Regular planned maintenance, and effective repairs, can extend an assets useful life, which can result in lower expenditure, depending on the associated capital outlay.  

Excessive administration time

When facilities teams are using outdated processes or technologies to manage work within the facility, it is at a significant resource cost. Salaries are usually a fixed cost and should be based on the skillset of each individual.  

Having talented team members spending hours on tasks that should take minutes is a poor return on the investment in their skills. Processes that rely on email, spreadsheets and paper, come with a significant cost in terms of resources.  

Over the long term, this costs the business money, through both poor return on investment, and recruitment costs. When team members are unable to use the skills they’ve worked to develop, they tend to have lower job satisfaction, and are more likely to leave.