Facility management is about strategic business assets that can contribute more than just to efficiency. Benefits, costs, effectiveness and efficiency are inextricably linked. They can be distinguished, but cannot be separated.
When benchmarking facility costs (NEN-EN 15221 Facility Management), lower costs are often assessed as positive in advance. Facility costs are proportional to the other expenses and represent ‘only’ a relatively limited part (8-12%) of the total costs. When one invests (too much) on saving on facility costs without also looking at the benefits side, this can lead to penny wise pound foolish activities.
Suppose that the facility costs per m2 at organization A are 20% higher than at organization B. It may seem that A performs worse than B. But when A scores 5% higher than B on number of graduates or profit margin and employee satisfaction, then organization A will on balance perform better than B.
We therefore not only look at cost optimization, but also especially at the contribution to the benefits, ambitions and objectives of the organization, ‘Fit for purpose’. Strategic management of the learn/work environment is more than just steering on effectiveness and efficiency It is also about manageability & being in control and engagement of the occupants in the learn/work environment.
“A price is meaningless without an adequate measure of quality.”
(Edwards Deming – PDCA cycle)
The benefits are not only incidental selling costs of real estate or regular rental income, but mainly the indirect effects of Facility Management (FM) on the costs and benefits of the other items in the financial statements. How can FM facilitate the desired performance and added value (even) better? How can it contribute to integral management?
Insight into your own facility costs compared to similar organizations helps as a reference to compare yourself to the average in the market. It answers the question: do we do things efficiently and in the right (financial) way. A further investigation can be made by also looking at the contribution to the own organizational goals and the benefits. Are we not only doing things in the right way (efficiency), but are we also doing the right things (effectiveness)?