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Give Top Management Multiple Reasons When Justifying Projects
March 29, 2011
Today's tip from Building Operating Management: When justifying money for a project, offer top management as many benefits as possible for the project.
One of the biggest management challenges that facility managers face is justifying the funding for new projects. In some organizations, the facility department is seen as a cost center, and investments in facility projects are not seen as having a return. Even when top management understands the value of facilities, investments in facility projects still have to compete with other uses of corporate funds, including ones that may increase revenue.
When justifying a project, it is of course critical to highlight cost savings and cost avoidance. These should be hard numbers and should be estimated conservatively. Savings projections will be closely tracked and, if the project fails to deliver the promised savings, the facility manager will have a harder time justifying projects in the future.
While these hard numbers will have the greatest influence on top management’s willingness to fund a project, they are not the only factor. Other cost related factors should also be highlighted. For example, if rebates are likely, it is worth mentioning that fact if the rebates are not included in the cost savings. Similarly, a reduction in the amount of time that staff has to spend maintaining an existing system should be reported. The time saved may not be a bottom line savings – unless the facility department is reducing staff - but they will have time to tackle other projects.
Another important consideration is the reduction of complaints. In many cases, the complaints will have to do with comfort, but that is not the only source of employee dissatisfaction. A cumbersome access control system or poor interior or exterior lighting could also bring complaints.
Reliability is another factor that should be weighed. In some cases, this will be the primary factor for the upgrade, as when a hospital is dependent on a very old and unreliable back up generator. But reliability can be a factor in a range of other systems as well, and should always be considered.
Finally, consider whether the upgrade will bring safety gains.