What are the most impactful ways to align facility capital investments with business goals?
Facilities play a crucial role in supporting the operations and success of all businesses. As a result, facility capital investments significantly impact a company's bottom line. However, to ensure that these investments align with the company mission, it is essential to consider several key factors. This blog will explore the best strategies to align facility capital investments with business initiatives.
Aligning facility capital investments with the overall strategic plan for the organization enables your institution to be more impactful now and in the future. Therefore, a cloud-based mobile enterprise software platform like FOUNDATION can help you do that!
1. Assess the Company's Current and Future Needs
The first step in aligning facility capital investments with business initiatives is to assess the current and future needs of the business. Therefore, the foremost action toward improving the capital investment plan for your company's facilities and physical assets is understanding the current situation.
Facility leaders should work with key decision-makers to conduct a thorough evaluation (Facility Condition Assessment) of physical assets across all facilities in the company's building portfolio. This evaluation process ensures that the entire organization has the correct data to achieve its goals.
This evaluation, also known as the FCA, includes understanding the company's operational and strategic goals and the facilities' role in supporting those goals. For example, if the company's mission is to become a leader in sustainability, then investments in energy-efficient systems or environmentally friendly building materials may be a priority. On the other hand, if the company's primary focus is on expanding its operations, then investments in additional space or updated equipment may be necessary.
Often this begins by collecting building data through the Facility Condition Assessment. The Facility Condition Assessment process involves regular inspections evaluating physical assets' visual and physical conditions, performance characteristics, risks, and impact of failures.
A facility condition assessment strategy incorporating walk-through inspections and mathematical modeling provides a baseline report allowing organizations to monitor and maintain the performance of physical assets, make intelligent capital investment decisions based on data, and secure the necessary funds for reinvestment.
2. Consider the Total Cost of Ownership
When developing facility capital investment plans, it is vital to consider the initial cost and the total cost of ownership. In addition, this process evaluates ongoing maintenance and operating costs, as well as the expected lifespan of the investment.
By taking a long-term perspective, companies can ensure that their facility capital investments align with their business initiatives and are cost-effective over time. For example, while a more expensive energy-efficient system may have a higher upfront cost, it may save the company money in the long run by reducing energy costs.
3. Develop an Inventory of All Projects
Once armed with the data collected during the facility condition assessment, you can develop a comprehensive project inventory. Think of it like a database filled with all current and future capital projects your organization will need to carry out to fulfill its mission.
A project inventory combines facility condition information with the significant institutional knowledge available inside the organization from facilities and maintenance personnel. This results in an integrated and supportable single living document within the institution. Developing a project inventory allows decision-makers to understand the particular investment demands of individual segments of the facility being managed.
Implementing technology like the FOUNDATION platform will help your team develop this project inventory efficiently. FOUNDATION features a comprehensive Life Cycle Costing tool that accurately estimates operating and maintenance budgets over extended periods. Having this data on hand will help in developing and validating reliable budgets and assessing long-term financial needs.
4. Connect Funding Directly to Facility Projects
Within the project inventory, it is essential to define each project with specific criteria like the mission, function, financial criteria or classification, programmatic value, geography, etc. Then, each project can be further organized by system, priority, or impact. This approach allows decision-makers to understand the particular investment demands of individual segments of the facility being managed.
One of the most profound benefits of implementing technology like FOUNDATION is our platform's built-in ability to automatically prioritize capital spending projects based on your institution's specific needs as it relates to its mission.
5. Engage Stakeholders in the Decision-Making Process
Finally, facilities leaders must engage stakeholders in the decision-making process for facility capital investments. This includes employees, customers, and other key stakeholders the facility capital investment projects may impact. By involving these groups in decision-making, companies can gain valuable insights into their needs and priorities. They can ensure investments align with the needs and goals of their stakeholders. For example, investments in updated safety systems may be a priority if employees are concerned about workplace safety.
In conclusion, aligning facility capital investments with the company's mission and business goals is essential for ensuring the success and sustainability of a business. Companies can ensure that their assets are mission-aligned and cost-effective by assessing their current and future needs, considering the total cost of ownership, and engaging stakeholders in the decision-making process.
Are you ready to find out how to align facility capital investments with business initiatives for maximum impact? Then, schedule a demo with us today!