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Inward Investment Guides
Workforce Development

A Strategic Facilities Capital Planning Primer

As the economy rebounds, access to readily available facility condition information provides a company with a strategic advantage.

Ray Dufresne, Vice President, VFA, Inc. (July 2011)
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Using the Data Proactively to Achieve Financial Gain
The capital planning process often identifies opportunities to bundle similar capital projects. Bundling can take multiple forms. An organization may bundle projects based on the building system that is affected. For example, if multiple buildings need roof replacements, grouping these projects together can yield economies of scale that can result in cost and labor savings.

An organization may also choose to bundle projects based on physical location, such as bundling multiple smaller requirements in one building or wing into a larger renovation project to enable an organization to increase efficiency and minimize business interruption. Finally, an organization may choose to bundle projects by the trades involved to take advantage of available staff. This bundling enables the corporate real estate team to obtain better prices for materials and more competitive fees for labor.

When companies have a basis for making informed decisions about project prioritization and capital budget allocation, they are less vulnerable to emergency failures. Emergency repair projects typically result in hefty premiums for labor during non-standard work hours, rushed shipments, and unplanned, but necessary one-off purchases.

It is not uncommon for organizations to purchase duplicate materials or to make purchases on a per site basis rather than buying in bulk. Without the proper planning tools, materials and services are not bid out to multiple vendors, resulting in a lack of competitive pricing. Trying to "do more with less" is a primary goal of most facility managers and asset planners. As budgets are slashed to a fraction of what facility managers require, they are challenged to find ways to address deferred maintenance requirements and capital renewal projects more cost-effectively.

With increased demand for transparency of information, employees are increasingly held accountable for their decisions. Facility managers and capital planners must find ways to automate and streamline all workflow that is associated with the collection, storage, and reporting of facilities and infrastructure condition information, as well as the quantification of deferred maintenance and capital renewal justification. Organizations without consistent assessment methodologies and centralized databases are at greater risk for noncompliance, higher insurance premiums, and overall exposure to liability.

Be Ready for What's Next
During an economic recovery, only organizations that have managed information about their facility assets and leveraged that information in the creation of capital projects, plans, and budgets will remain strong. It is a strategic advantage to have readily available facility condition information that will enable rapid and decisive action. The benefits in cost and strategic outcome will be significant, whereas the financial and functional price of poor facility planning will be painfully high.
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