Developing a budget for a facilities department requires plenty of forethought and strategy. Preparing for the budgeting process is essential to ensure your department secures the resources needed to manage regulatory compliance and tackle operational improvements. Presenting a disorganized plan to decision makers who may not be as familiar with the ins and outs of a department’s needs can quickly lead to cost cuts that negatively impact operations. However, having the right information and examples available to prove why facilities need a certain budget and how it supports overall functionality will help you defend your requests and get more resource needs approved.
(Photo: Adobe Stock/ Iryna)
There are five recommendations to keep in mind when preparing to advocate for your department’s needs during budget planning, using a hospital as an example:
Operational Efficiency
In a fast-paced hospital environment, every second is valuable, and the staff’s ability to perform their duties efficiently is critical. Research from Vizzia Technologies and Georgia State University found that registered nurses spend about 60 minutes per shift solely on tracking down needed equipment, leading to an overall $14 billion annual productivity loss for healthcare facilities. Ensuring that facilities have the budget needed to effectively organize and maintain its inventory of equipment not only makes an obvious financial impact on the time spend needed to locate assets but can also improve employee satisfaction and retention from avoiding the frustration of constantly searching for materials.
With many hospital systems considering flex staffing for fixed departments like plant operations, demonstrating operational efficiency becomes paramount to maintaining the FTE count during a budget cycle. When preparing to present budget plans, emphasize the widespread positive trends that hospitals can see when maintenance staff have adequate resources to stay on top of operations and enable other staff to perform their jobs more easily. Utilizing CMMS data to exhibit metrics for employee productivity, preventative maintenance needs, or work order backlog can illustrate the facility’s needs to decision makers.
Preventive Maintenance Vs. Reactive Maintenance
An important first step: emphasize the importance of having the resources needed to stay on top of preventive maintenance. Performing proper, ongoing preventive maintenance instead of relying on reactive maintenance has a positive impact in several areas, including:
Cost savings by keeping assets well-maintained and extending their product lifespan while also prioritizing which assets to replace or continue repairs.
Risk management benefits from having consistently functional and reliable equipment when it’s needed most. Optimal maintenance means fewer failures.
Avoiding penalties by maintaining up-to-date compliance standards.
Capital expense budgets are one of the first savings levers for finance departments. However, longitudinal studies of maintenance practices show the long-term impact of investing in your preventive maintenance program over run-to-fail models. These programs offer a more reliable, balanced workload, rather than the ebb and flow of unmanaged equipment downtime.
Energy Improvements
With many healthcare facilities placing an increased focus on optimizing energy efficiency, this is a topic that will likely connect with the priorities of the decision-makers overseeing budget requests. Presenting energy improvement plans and what a department needs for them is a great opportunity to tie a request to tangible numbers. Focus on the dollars that could be saved if the team receives adequate resources to act on an energy initiative.
Energy improvements are all about efficiency. Optimizing energy usage with measures like more efficient HVAC systems or lighting reduces overall energy costs across an organization, promotes a healthier environment for both patients and staff, and reduces the risk of equipment downtime when supported by a backup energy plan in the event of an outage.
On top of these operational benefits, a facility actively taking steps to align with greener practices can be beneficial in terms of reputation and community sentiment toward an organization. Tapping into the idea of a widespread increase in ROI plus the ongoing long-term impact of shifting toward more energy-efficient operations is a strong case to make in favor of allocating a sufficient budget to the department.
Patient Experience
Regardless of the department, patient care is at the core of all work that healthcare professionals do. For healthcare facilities, there is a direct correlation between having sufficient resources and the care that patients will receive. Providing maintenance departments with the budget to operate efficiently enough to keep up with the labor and equipment needs of the environment of care is essential to delivering high-quality patient care. A well-maintained environment and organized, reliable equipment contribute to a more positive patient experience during what could be stressful and frightening experiences.
Hard Data And Industry Benchmarking
Backing up departmental budget needs with concrete numbers is always a good practice. Having data to reference as evidence of why certain resources are needed is not only a useful tool to make budget planning easier, but it is also an integral part of demonstrating to those who may not be attuned to the needs of Facilities departments exactly where resources are going and what the outcomes for the organization as a whole are. Consider data points for assets like unplanned downtime to illustrate disruptions in operations (and revenue!) or labor hours spent supporting specific assets.
When asked to reduce the budget, many CFOs are looking to verify the cost of operations is in alignment with other hospital systems of like size and kind. Using industry benchmarks can display how effective your operations are when compared to peers. The challenge lies in confirming that the facility’s financial and operational models mirror like-sized hospital systems. Typical benchmarking organizations such as IFMA measure your FTE need vs. current headcount, vendor spend, materials purchased, and contracted work. Setting goals to exceed such metrics can out a hospital system above the rest.
Combining this data with industry benchmarks and best practices offers persuasive arms you with persuasive evidence when presenting a capital plan. For example, stacking up asset installation dates against industry standards for asset usable life can demonstrate successful ROI on previous resources allocated toward preventive maintenance. Tools like a CMMS and an integrated capital planning tool are important sources of information in nailing down these numbers and compiling budgets based on real data.
Though advocating for department needs during budgeting season can be a stressful process, there are several ways to alleviate frustrations and ensure that the reasoning resonates with decision makers, regardless of the depth of their knowledge in the facilities space. Coming prepared with facts informed by real, actionable data, tying budget needs to bigger, core concerns in the healthcare space, and aligning your plans with overarching hospital goals are great strategies to employ in making the strongest case possible.
Lang brings over 17 years of CMMS/EAM software experience to his role as Vice President, Product & Strategy with FSI. In this position, he is responsible for overall product planning and direction, partnership development, market analysis, and strategic planning / initiatives. Prior to his current role, Lang held various positions at Accruent and Four Rivers Software including leading corporate strategy and previously healthcare go-to-market efforts as VP of Sales.
Do you have a comment? Share your thoughts in the Comments section below, or send an e-mail to the Editor at jen@groupc.com.
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