Facility Cost Cutting: Three Tips for Success

  May 14, 2012

Today's tip from Building Operating Management: When facility managers have to cut costs, these three tips can help prevent problems.

1. Do thoughtful research before committing money to a project. "We are much more careful about the way we evaluate growth projects and spending in general," says Julie O'Loughlin, senior director of operations and facilities, Fenwick & West. The firm is just now beginning a $6 million expansion of a conference center, a project that was actually approved a year ago, because the firm took more time doing its homework. "We are pushing the limits in sustainability, quality and aesthetics," she says. When putting more time in on the front end, facility managers should aim for "multiple wins" and look beyond the fulfillment of immediate goals.

2. Try to maintain the same level of service. When it comes to cutting costs, potential savings should be carefully targeted. “It’s important to maintain the same level of service and maintenance without spending the same money, and we have been successful at that," says O'Loughlin. For example, an expensive summer picnic was replaced with monthly events that highlight diversity — such as Martin Luther King Jr. Day or Cinco de Mayo.

3. Don't make cuts that will increase long term costs. SAP cut facility costs during the recession. For example, less time and effort was spent on replacing chairs, tables and carpet. "We are repurposing and extending the life of fixtures and finishes — carpet, wallpaper, light fixtures," says Larry Morgan, head of operations for SAP in Palo Alto and Vancouver. But the budget cuts did not sacrifice energy efficiency as a way of reducing first costs. When equipment must be purchased, efficiency is a priority. "A seven-year return on investment is the break point," says Morgan. "Sustainability and energy efficiency are two of our sacred cows."

This has been a Building Operating Management Tip of the Day. Thanks for listening.


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