Do you want to improve your Capital Planning process, eliminate the headaches from staring at Excel, and make your job easier?
Data-Driven Strategies to Improve Facility Capital Planning
Savvy capital planners and facility managers use software to improve their operations and planning effectiveness drastically. In this guide, we’ll share three stress-free facility capital planning ideas that the pros use to complete critical projects and successfully finalize value-added projects. Meaning that their facilities run smoothly and look great.
Make Facility Capital Projects the Priority
After you have filed data from your property's condition assessments, you must determine what must be done in the coming year and the timeline for each item. Deferred maintenance is the enemy of any facility manager. If you accumulate too much, you risk equipment failure and will spend substantially more money on reactive maintenance.
Learn how FOUNDATION can generate costs and timelines for capital projects.
Capital projects include significant operations and maintenance projects. Examples include system renewal projects, strategic capital projects, and mandated projects. A system renewal project may involve replacing the infrastructure of your plumbing or electrical system, making it safer and more efficient. Strategic capital projects include constructing a new building. Mandated projects involve complying with local, state, and federal regulations.
When prioritizing facility capital planning projects, you can improve transparency and accuracy for your capital planning needs by prioritizing and monitoring progress while addressing those dreaded deficiencies. This will enable you to maintain a healthy built environment for all facilities in your portfolio and preserve the useful life of critical assets for the future.
Benefits of Historical Analysis to Prepare for the Future
It is critical to track and review past activities using your facility maintenance software. Past maintenance activities are an excellent benchmark for successful facility capital planning. Reviewing the projects you completed gives you an idea of what to anticipate in the future based on past performance.
It is crucial to consider the kind of work your team has performed in the past. Were you reacting to emergencies and critical safety concerns, or did you primarily focus on preventative maintenance? Also, take note of spending. How much did you spend last year, and how much do you intend to spend this year?
From a capital planning perspective, you are at a disadvantage if you don't track when and how maintenance is performed on equipment and log those details. Without this information, your team is at risk of spending more on maintaining an asset than replacing it. Quality facility maintenance software will track this data and can be easily exported into your existing budgeting tools.
Analyze Metrics
Reviewing your past budget will give you an idea of where your future number will fall. However, you should not totally depend on this strategy to plan your budget. Spend some time calculating basic statistics based on past years. Calculate a range for your anticipated budget that takes into account the worst-case scenario. This will help mitigate risk when planning new projects.
Plan for early replacements and premature asset failures. Take this range further by figuring out a confidence interval. This number provides a range of likely capital needs. Take a 95 percent confidence interval as an example. You may conclude that you are 95 percent confident that your operating budget will fall between 1.2 million and 1.5 million dollars. This means there is a 5 percent chance that your budget is below or exceeds this range. Your capital planning software will help you calculate this number.
When predicting a budget, you want to strive for the number that allows your team to complete all projects with some money left over for proactive and preventative projects. Still, you must also know your lowest acceptable budget. Consider the minimum amount your team will need to survive and thrive.
Improve Facility Capital Planning
These three tips will ensure that your facilities management team is geared up for success by helping you improve your facility capital planning. Ready to learn more about stress-free facility management and capital planning?
