Facilitating Success: Setting KPIs in Facilities Management

a man works with a notepad and computer while looking at graphical information

Why do facilities managers need KPIs?

Facilities managers play a pivotal role in optimising performance and productivity for the facilities they operate. When you’re the individual tasked with looking after the building and all of the assets inside it, you are controlling a significant percentage of total business value. 

Increasing demands are being placed on facilities managers to use data insights to make informed decisions about the facilities they manage. By setting KPIs that support strategic goals such as lowering expenditure, improving morale, increasing efficiency and productivity, facilities managers can use data to drive significant organisational improvements.

What are the right KPIs for facilities management? 

It takes time and effort to collect and analyse data, so it’s important to understand what KPIs matter to your organisation. More information is not necessarily better. Setting KPIs that are aligned with business goals will help you understand how your team is performing and pinpoint areas for improvement.

Example KPI: response time within SLA

Your business goal may be to minimise service disruption. To support this you might have a service level agreement (SLA) with your customers around the speed at which you respond to maintenance requests. The actual timeframes could be tiered based on priority. For example, urgent requests could have a 4 hour response time, while normal requests may have a 48 hour response time. Your KPI here could be to achieve those timeframes 90% of the time.

Example KPI: percentage of planned vs reactive maintenance

Also supporting a business goal of minimising service disruption, you might have a KPI for the percentage of planned vs reactive maintenance. We know that by allocating more resources to planned maintenance than reactive maintenance, you will reduce overall equipment downtime, facilitating a more productive, efficient, and safe environment. In industries such as healthcare, this becomes critical, as it may impact the functionality of clinical equipment.

Example KPI: maintenance expenditure vs asset replacement value

Facilities are almost always constrained by budget pressures, which is why most facilities have a business goal to keep expenditure within budget. By setting a KPI to track maintenance expenditure vs asset replacement value, you can monitor how effectively you are spending your budget. This in turn, allows you to make more informed decisions on when to replace assets

Example KPI: customer satisfaction

Many facilities are shifting to a customer-centric model with a business goal of providing outstanding customer service to facilities users. To measure this, you might survey your customers on a regular basis to measure how happy they are with the performance of the facilities team.

Setting KPIs in facilities management

If you’re just getting started with your KPIs, reviewing your KPIs, or KPIs you might have with your suppliers, here’s an approach we’ve seen work successfully with many organisations.

Defining your business goals

Start with the end in mind. The KPIs that provide the most value are those tied to your business goals. Lowering expenditure, minimising service disruption or improving morale are common examples of goals set for facilities management.

Don’t forget to consider external sources, such as government regulations, when defining your goals. For example, the Victorian government has 11 recommendations based on asset and maintenance performance which would become goals by necessity for organisations who are required to comply with this framework.

Collecting the data

This important step is about understanding the raw data you have available.  What data are you collecting?  Is the data reliable?  Does it provide the numbers and values  you need to measure performance against your goals? 

Practical example #1: minimising service disruption

You might be able to record the response times for each work order, based on priority.

Practical example #2: managing costs within budget

You might be recording the cost of repairs against an asset.

Creating metrics

Raw data starts to become meaningful when it is used to create metrics.  Metrics are typically derived from two or more measures, and usually calculated by division.

Practical Example #1: minimising service disruption

Using ‘response time’ data collected for each work order, you can create a metric for how many work orders were completed in less than the required response time.

Number of work orders completed within response time / Total number of work orders =   Response time within SLA (%)  

Practical example #2: managing costs within budget

Using repair cost data over a given timeframe and purchase or replacement cost data for an asset you can create a metric that provides insight into how efficiently your maintenance dollars are being spent.

Maintenance expenditure / asset replacement value = Maintenance expenditure vs asset replacement value (%)

Setting your KPIs

Once you have gathered your metrics, it’s important to set target ranges that will become your KPIs. These predefined target ranges will help you interpret your metrics and stay on track. Are you doing well, or do you need to improve?

Practical example #1: response time within SLA

To ensure that you are minimising service disruption, set a KPI aligning with this goal. An example KPI would be that SLAs for response times are met 90% of the time.

Practical example #2: maintenance expenditure vs asset replacement value

To ensure that you are managing costs efficiently, set a KPI that alerts you to assets where the cost of repairs are excessive.  An example KPI would be that cost of repairs vs replacement value does not exceed 60%. When that percentage is reached, investigations are done and recommendations made about asset replacement.  

Monitoring your KPIs

You’ll start to reap the benefits of your KPI setting if you set a regular KPI review process and action program, to address problem areas highlighted by your KPIs.

If you’re new to KPIs, we recommend starting with a few important KPIs for your facilities, and adding KPIs at a pace that suits you. Ideally, you have processes in place to ensure your data is reliable and up to date, and a KPI dashboard readily accessible.

Measuring success

With an increasing expectation for facilities managers to use data to make business decisions, understanding how to use KPIs effectively can be a powerful tool for facilities managers.

KPIs aligned to business goals, and supported by reliable and accessible data, will ensure you are focused on the right operational areas, rather than being lost in a sea of metrics you never look at, or critically analyse.

Paper-based processes, disparate systems and knowledge silos can make it incredibly difficult to collect good data to feed into the KPIs that drive business performance.

By leveraging a central, digitised system, you’ll obtain reliable data and accessible dashboards that can be used to measure success. While it’s possible to obtain this data and monitor KPIs via paper-based processes, the lag in information can render the KPIs redundant as they’re compiled.

Ideally, you will be setting KPIs aligned to your business goals, based on data you’re confident is real-time and accurate. Solutions such as FMI Works make this data readily available, enabling you to set, and reach, KPIs that create business value.