New Content Updates
Educational Webcast Alerts
Building Products/Technology Notices
Access Exclusive Member Content
Part 1: Management Insight Column: Harnessing the Power of Data
Part 2: Management Insight Column: Analyzing Facilities' Energy Use
Part 3: Management Insight Column: Rethinking Management Priorities
By Andrew Gager
March 2014 -
Facilities Management Article Use Policy
Institutional and commercial facilities collect more data every day, primarily via work orders. With more data coming and demands growing to use the data, what does the data tell managers, and how can they use it to make better, smarter financial decisions?
The three areas of facility spending where data can have the greatest impact are: total cost of ownership, or life-cycle costing (LCC); energy consumption; and management practices. By capturing and analyzing data from computerized maintenance management systems (CMMS), managers can strategize the most effective decisions in order to reducing spending.
To determine LCC, we begin with the framework with which we'll capture the data. This includes the initial costs — procurement, installation, start-up, and commissioning. Next, we want to capture maintenance work, including repairs, custodial costs, and equipment alterations. Do not forget to capture energy costs. ASHRAE publishes the average life expectancies of mechanical equipment used to condition a building's environment. Here, managers can find information on typical life expectancy for most HVAC equipment to be between 15 and 20 years, if maintained properly.
Using data to capture these costs and linking these expenses to an asset, we can determine the LCC, as well as whether to repair or replace it. Unfortunately, that means over the life of an average building, this equipment will have to be replaced at least once. You should determine what your annual costs are to pay for a partial replacement, total replacement, or alteration. Keep in mind that technology is moving faster, and energy-consuming equipment is getting better with each generation. Using data to justify deferring a major capital project might be the best decision in the long run, but spending more in the short term while ensuring the accuracy of the captured data might help managers make the right decision.