By Josh Lowe, AkitaBox Co-founder
Decision makers have a tough job.
They’re responsible for the distribution of an organization’s resources including investor dollars, tax-payer money, donor funds, and the time and effort of their workforce.
So how can they accurately allocate precious capital resources while also balancing a range of variables during the capital planning and budgeting process?
The only way to achieve accurate capital planning is to analyze accurate facility data. The problem is, many facilities don’t have precise facility management metrics to start with, which can mean millions of dollars poorly deployed or—even worse—completely lost.
The Facility Data Problem
Capital planning challenges start with a lack of accurate data—data that’s needed to properly assess facility needs. Traditional facility capital planning processes rely on pulling together several sources of information because facility condition assessments aren’t up to date—meaning there’s no single source of truth.
This is how the facility capital planning process usually goes:
- Inaccurate Data Is Collected From Various Sources
Facility directors sort through piles of outdated facility condition assessment (FCA) reports, work orders, repair statuses, warranties, physical ledgers, workers’ memories, poorly updated spreadsheets, Post-it notes, several different software and management systems, and other siloed information.
- Ballpark Statistics Are Used
This inaccurate data is then combined with ballpark depreciation, maintenance, and facility management metrics based on regional equipment averages. The problem is, these statistics aren’t specific to facility conditions such as heat, humidity, vibration, etc. while also failing to consider a facility’s maintenance history.
- Shoddy Estimates Are Produced
This combination of inaccurate data and ballpark metrics is then used to produce estimates for maintenance and replacement schedules, but those estimates are off—and sometimes by a lot. This can lead to unnecessary maintenance being performed and/or crucial maintenance and repairs being missed.
- A Best Guess Budget Is Requested
These estimates are then baked into a final capital budgeting request in Excel. Sometimes the margin of error/fudge factor is baked into the base numbers, and sometimes it’s explicitly called out in the spreadsheet—sometimes both.
- That Less-Than-Accurate Request Is Approved
Capital planners and budget holders assume that the facility director has asked for more than they need and grant the request. Even worse, without accurate data to back up a budget request, it’s seen as nothing more than a line item; there’s no way to communicate the urgency of specific requests accurately.
What Low Quality Data is Costing You
Ultimately, inaccurate facility data is costly. That’s because it can:
- Feed misinformation from facility directors to asset managers
- Cause overestimations of the stamina of equipment, leading to incorrect maintenance deferments and unexpected major expenses
- Result in safety or operational ramifications
- Create incorrect prioritization of capital plan components
- Lead to customer dissatisfaction
- Continue use of assets that have exceeded their useful life, costing more money to maintain than if they were to be replaced
- Lead C-suite executives to make less-than-ideal budgetary decisions, mismanage capital reserves, and fail to realize investment gains
- Force facility directors to waste precious time by starting the budget planning process and reassessing capital allocation from square one with every budget cycle
Getting The Facility Data You Need
It can be costly and labor-intensive to keep facility condition assessments truly up to date—and if they’re not, organizations lack a single comprehensive, current source of truth when it’s time for budget planning.
Without that single source of truth, it’s impossible for facility directors to bring together all of their facility data points—like maintenance history, current status, recent weather events, preventive maintenance, and current deferred maintenance —in order to create an accurate master plan. However, by implementing new tools that leverage existing, connected technologies, facilities can revolutionize their capital planning process.
AkitaBox For Facility Capital Planning
AkitaBox FCA Pulse is software designed to support capital planning. We do this by implementing a robust capital management system that provides facility managers with the data they need to accurately present facility conditions to stakeholders.
How does it work? Our platform collects and analyzes your specific data from your assets and facilities. Our Capital Management software then combines gathered and integrated data with global pools of information in order to:
- Help you design budgets correctly the first time
- Include appropriate allocations for replacement and major repairs
- Carry out projects on time without funds running dry
- Model future scenarios
- Provide real-time insights to be leveraged by budget decision-makers
Let’s Get To Work
Get the detailed information required to make budget decisions now, while setting the foundational architecture to automate facility data collection and aggregation for the future.
Stop relying on educated guesses. Make sure your facility data is available, accessible, and up-to-date with AkitaBox.
Learn more about how our solution can help by scheduling a demo.