The Importance of Asset Registers in Facilities Management

 Facilities Managers today have far greater opportunity to add value to their organisation and client through efficient management and strategic planning. Increasingly, we are seeing facilities management professionals given a seat at the executive table when business models and strategies are formulated. This has not always been the case and in the past FM activities were viewed as a business cost rather than adding business value. A key driver of this change has been technology and software platforms which allow FMs to present information in a strategic way to business leaders and decision makers. The utilisation of software packages has evolved rapidly over the last several years and integrated facilities management systems and building information modeling (BIM) will continue to be buzz words in the FM space.

The backbone, and indeed the strength or weakness of any facilities management software package is the information fed into it. A common problem faced by Facilities Managers is inaccurate or incomplete asset registers. With increasing demand for facilities management to be more strategic, appropriately managed asset registers are an invaluable source of information. It could be argued that a well maintained asset register is the bedrock on which a quality total asset management process is built and further developed. The challenge for FM professionals is ensuring they are always working from “one version of the truth”.

Key information which feed into an asset register and link to facilities management strategy plans are as follows.

• Asset management, strategy and planning
• Procurement
• Maintenance history and expenditures
• Capital works
• Condition assessment
• Compliance
• Asset disposal
• Life-cycle replacement
• Reporting and analysis

An example of the useful information captured in asset registers which shape FM decisions are;

• What are the assets, plant and equipment?
• What condition are they in?
• Physical properties.
• Technical data.
• Property title details.
• Maintenance and service history.
• Performance and reporting.
• Benchmarking.
• Compliance and regulatory requirements.
• Warranty information.
• What maintenance strategy is required in alignment with available budgets and funding?
• Is the service level agreement (SLA) appropriate?
• What is the right service delivery mix – PMs vs. RMs.?
• Data to drive whole- of –life (WOL) and life-cycle-replacement (LCR)decisions
• What FM structure and resources are required to deliver on contractual obligations and client expectations?
• Maintenance expenditure, forecast and planning.
• Financial information useful for investment and purchasing decisions such as NPV, IRR, lease or buy and disposal.

Developing the Asset Register

The main stages in developing an asset register

Analysing requirements – It is important to understand the needs of the client and what information is required. Collecting data can be very expensive and a drain on limited resources. Facilities Managers must determine the right balance on what information is really needed and is likely to provide real value to the client. As a guide there are three general data sets required as a basis for an asset register.

1. Management reporting
2. Planning information
3. Operations management

Developing solutions – Finding the best options, what are the appropriate technologies, data collection and storage methods, ease of operator use, ongoing system maintenance and cost.

Plan the asset register – An asset register can be in a number of different models, formats and asset hierarchy depending on requirements.

1. Unified composite – Small organisations, geographical separation, centralised management and one data base.
2. Segmented autonomous – Larger organisations with individual business centres, segmented on a geographical basis, provides focus on individual services and asset groups.
3. Umbrella integration – Spans more than one register or data warehouse, multi-disciplinary structures or organisations with consolidated reporting responsibilities.
4. Hierarchy – system, sub-system, facilities, components and sub-components.

Implementing the register and solutions – Despite a strong focus on analysis, development and planning, implementation is where it can fall down if not done well.

1. Assign a program leader.
2. Agree on timeframes, milestones etc.
3. Agreed naming conventions, knowledge management process.
4. IT compatibility.
5. Data cleanse and transfer.
6. Managing risk.
7. Change management.
8. Access and usability.
9. Training.

Monitor and continuous improvement – Implement a continuous improvement process to ensure accuracy and relevance of collected data. “One version of the truth”

Tying it all together

FM   Strategies	Asset   Register	FM   Challenges
Strategic facilities   Planning Strategic   asset management Space   planning and workplace strategies Facilities   support services Asset   maintenance plan Performance   and reporting	High   quality decision making Builds the   knowledge pool Drives   innovation, learning and solutions Governance Integrated   planning	Monitoring   and control Contracts   management Scope   creep Evaluation   and selection of service providers Contractor   management Budget and   funding constraints Evaluation   of added value

Tony Grima

 

 

Whole-of-life asset management – Is it relevant?

As managers responsible for the maintenance of facilities and assets, we often hear the term whole-of-life. When referring to WOL we are essentially talking about the total cost of ownership over the anticipated life of the asset, and the impact that may have on formulating an asset management strategy. We are not just referring to the direct maintenance cost but also cost relating to financing, planning, design, installation, environmental, management and disposal. The logic behind whole-of-life cost analysis is sound and its influence on good decision-making and value to the client cannot be argued. Why then is this asset management strategy rarely implemented successfully? It is a complaint I often hear in industry circles and it would seem that clients are increasingly asking for more than a simple preventative and reactive maintenance approach.

But is this always the fault of the facilities or asset manager? For a WOL maintenance program to work certain things need to remain constant throughout the life of the asset. As an example, we need the client’s attitude to maintenance and the maintenance budget to remain unchanged. We also need to start with a base of all assets having being maintained to a standard of industry best practice and we need terms and conditions of a maintenance contract to support a WOL approach. Expanding further on my last point, I have managed maintenance contracts which call on maintenance cost and fees to reduce year on year. This can only work if the contract starts with all assets being up to standard and ongoing maintenance at industry best practice. An incoming facilities management firm with a WOL program in mind and the responsibility of deteriorating and poorly maintained assets would first need to convince the client to spend significant short-term sums to bring their assets up to a certain standard in order to capture long-term savings. In today’s climate that would be a difficult challenge. In addition, if quality and accurate asset condition data has not been kept then there is no solid platform on which to base a WOL program.

The other constant required mention above is the client’s attitude to the maintenance budget.  When revenues are down and financial managers are tasked with reducing business cost then maintenance budgets are often the first to be cut. This is especially true when the assets are not integral to the client’s core business. This is a short-sighted response which while helping to solve  immediate cash flow and profitability issues will certainly see reactive spend increase and reduced reliability and availability of the asset. In this environment WOL programs lose traction and the end result will be far higher long-term maintenance cost.

Tony Grima

Strategic Facilities Management

Facilities Management is increasingly becoming of strategic significance to organisations. All businesses can essentially be broken into two larger parts – The core business and non-core business. The non-core business, or support services play an essential role to enable the organisation to operate at its most efficient.This in turn reflects in competitive advantage, profitability, sustainability and value to the customer. The emerging complexity of facility management over recent years has stirred up great debate on what is a Facility Manager and what skills and training should that person have. One half of the debate argues that a FM should as a minimum have a trade or engineering background. Others will argue that managing contractors, business acumen and client relationships are of more importance. What is clear is that the profession is changing and far more skills and attributes are now required to be effective and successful. Training providers and educators are rushing in to fill the void and bridge the perceived capability gaps with a range of courses and programs including post-graduate degrees. Skilled and experienced FMs are now finding themselves in very senior roles within their organisation further highlighting the emerging strategic importance of this function.

An organisations buildings and infrastructure assets represent a significant investment and it is the job of Facilities Managers to protect the investment and ensure that this expenditure item is viewed as an added value to the business. An ever present challenge for FMs is providing an industry best practice support service on limited maintenance budgets and there is always pressure from finance managers to look for savings in the non-core business. With running cost accounting for a large percentage of company expenditure this shouldn’t be a surprise, but it must be recognised that cost and quality are firmly linked and cannot be contemplated separately. Reducing or limiting maintenance budgets may appear attractive to those looking through a financial frame of reference or bias but is unlikely to produce long term savings and certainly increases risk to an organisations competitiveness, ability to deliver value to customers and reputation.

Formulating a facilities management strategy

A maintenance strategy cannot realistically be formulated without knowledge of the organisations business model and fundamental objective, but this is what often unintentionally occurs. The maintenance department is relegated to a reactive support service rather than an integrated strategic part of the business structure critical in delivering on the customer value proposition.

Key considerations when formulating a facilities management strategy are the organisations objectives, risk mitigation policies, business operational plans and the space/accommodation strategy. Facility management must effectively support and enhance the core business, and certainly should encompass the principles of business administration, engineering, architectural and behavioural sciences. Other important factors of a facilities management plan are.

1. Budget – What capital is required for short term needs as well as long term savings and value?
2. What are the direct and indirect cost?
3. What processes, systems and technology will be required?
4. What are the appropriate resource levels and capabilities required to provide an effective maintenance service?
5. What management structure will be required – centralised, decentralised, mechanistic or organic?
6. Should you outsource services or keep in house? Perhaps a mixture of both.
7. What are the organisations procurement policies and what impact might they have on facilities management?
8. What are the implications of outsourcing?
9. If outsourcing, how will you maintain control?
10. Are the buildings leased or owned?
11. What is the life cycle replacement strategy?
12. What are the service specifications and service level agreement?
13. What will be your sustainability and environmental strategies?

With the above considerations you can start to apply a strategy development process such as the following.

Once a strategy has been selected the next stage is its implementation. Operational frameworks and policies can be developed and implemented via a change management process. With any strategy, poor implementation is an issue and the plan should include a risk analysis and mitigation and performance measures as a means to monitor progress. Facilities management can be a very dynamic and reactive field and  it is best to select a strategy which provides enough flexibility to adapt to changing market forces, technology, and shifts in government and regulatory obligations.

A word on out-sourcing

The positives and negatives of outsourcing have long been a source of debate within the facilities management industry. The positives of course are increased innovation, reduced administration, reduced risk, and cost savings due to economies of scale and scope and also the harsh realities of competition. The advantage is even more relevant when you are referring to multiple sites over large geographical areas. The argument for not out-sourcing may relate to strategic reasons, protecting valuable and sensitive information, losing control on performance, losing core expertise and general principal/agent issues. Quality control issues can be somewhat mitigated by having an effective procurement and contract management process and a partnering arrangement is becoming increasingly common. The decision to out-source in addition to the reasons given above can simply come down to a matter of transactional cost. In other words, if another company can provide a service more efficiently and cost effective than your organisation than it should be considered. The problem is that total cost is often under reported and all direct and indirect cost should be identified if you are to accurately assess the merits of out-sourcing services.

Facilities management and sustainability

A key component of a facilities management strategy these days is sustainability and the environment. Efficient operation of buildings and assets in addition to being beneficial for the environment and reduced impact on resources also helps to reduce lifecycle operating cost and boost occupant productivity. The term “green” building is becoming increasingly common and the challenge for facilities management is to formulate maintenance strategies which integrate “green” principles into their processes and procedures. Some of the sustainability issues faced by facilities managers are

1. How to reduce building operating expenditure.
2. How to reduce wastage of limited materials and resources.
3. How to reduce chemical usage, waste disposal, energy and water usage.
4. How to improve the carbon footprint.
5. How to improve building occupant comfort, productivity and job satisfaction.

Choosing the right maintenance strategy provides the opportunity for professional Facilities Managers to have a significant impact on organisational outcomes and performance in tangible but also intangible ways. It is evident that the field of facilities management is becoming increasingly complex and today requires many different skills similar in many ways to a general manager.

Tony Grima