Better Operating and Capital Budgets: Tools, Data and People

 

How good is your budgeting process? How accurate are your budgets?

In our experience, the best facility management financial planning is undertaken with the knowledge that proper maintenance is crucial to support the organization's core business. Budgeting in the real world must balance each organization's culture as well.

In today's matrixed institutions, the true financial impact of facility management practices and initiatives is little understood. The good news is that when leadership understands the organizational and financial impact of all aspects of facility management, better management decisions result.

Data

Understanding the numbers and their impact across the organization helps leaders better appreciate the varied elements of facility management. When they do, it is much easier for them to identify priorities, balance work with resources, measure performance, and ultimately, begin to undertake important process improvements.

Good data is crucial to the effort. Understanding the classification and categorization of your information is part one. Part two is making sure that analysis accurately reflects the real world situation. When you have good date, you can improve the budgeting and planning process and start to develop reliable long term cost projections. Unfortunately, we see far too many institutions fail to take full advantage of important data that may be only a few clicks away -- key metrics and indicators residing in their own CMMS and CAFM systems.

Tools

Good data, of course, will only take you so far. You also need strong analytical methods for projecting capital maintenance budget requirements and new initiatives. If your analysis is faulty, your budgets won't be accurate and institutional performance will suffer.

 In a similar vein, ensuring that your accounting systems and practices are up to today's standards is a must for responsible cost management. Outdated systems result in outdated thinking, something today's institutions can ill afford. 

People

But good systems and data are only part of the picture. In our experience, another critical factor is how you address the people side of facilities in your budget planning.

Institutions that constantly assess and improve the people side of operations consistently outperform those that don't. Improving clarity around job expectations and budgeting for staff training improves not only financial performance. It increases customer service delivery levels and employee satisfaction, often dramatically. Since it costs more to hire and train new employees (and takes staff time away from other duties), addressing the human side of facility operations pays financial dividends and should be an important focus in developing your budget.