Facility management companies are faced with more challenges than ever before. Buildings are bigger and more complex, while customers and tenants are demanding better services with a limited budget. Even though organizations outsourcing as a strategy to increase profitability, access new skill sets, re-focus on their core business and improve competitiveness, various surveys show that cost reduction remains on the top of the agenda. Cost savings continue to be the most important reason behind outsourcing decisions. Companies need innovative tools and solutions that would help them make operational decisions and ultimately show savings for their clients.

FMs are charged with management and control of buildings with the aim of minimizing operating costs in connection with the established quality standards and maximizing buildings value. Therefore, the FM service provider must have technical abilities and entrepreneurial approach so that all managing responsibilities can be integrated.

There was a time when FM was seen as an additional cost to a building’s maintenance. However, this notion is changing as more people are effectively managing the maintenance budgets. Showing savings to clients has become a prime focus for any FM company.

However, most businesses tend to focus on the bottom line, with no consideration about what’s going to happen further on down the road. This rush to the bottom line of price, can pose to be a huge challenge as it prevents both parties from ever understanding each other’s needs or creating a partnership that produces the value lasting relationship for all involved.

No matter how tight the maintenance budget gets, FMs are responsible for completing a host of essential tasks. Well-planned maintenance is the cornerstone of a cost-effective facilities management and maintenance program.

So how is this ongoing challenge solved? One approach to cost savings is very simple – Use of minimum resources with maximum effort.

Develop a strategy based on the client purposes and needs, which allows having the highest achievement from property assets, taking always the philosophy of Full Quality and Constant Improvement as a starting point.

Here are few strategies that can help in achieving savings for clients:

Through successful implementation of FM service delivery and innovative contract models, most stakeholders have been able to achieve significant savings and an upgrade to service standards. The integrated model can reduce a third of costs as FM frameworks work in coordination to improve efficiencies and bring in cost transparency, which is critical for stakeholders searching for cost rationalization.

Even though allocating indirect costs is very important for FM companies– it is also difficult. A popular and robust method is Activity Based Costing (ABC), which allows an organization to gather data about its operating costs and assign them to each activity.

Activity Based Costing can be used in various ways, but the simpler time-driven ABC method may be the best as it only requires two inputs: 1) cost per time unit to supply resources to this activity and 2) how much time each activity takes.

Preventive maintenance is an essential component of successful facilities management and maintenance, as it prevents the risk of system or component failure. Preventive maintenance tasks are performed on a regular schedule or frequency and consist of many checkpoint activities on equipment.

Reap benefit from technology. Technology and automation of equipment are creating new levels of cost optimization and benefitting all stakeholders. It is something the FM market cannot ignore and should invest in to receive better savings. It is also important to reduce energy costs. Total utilities, including electricity, chilled water, steam, and natural gas comprises approximately 25 percent of Total Operating Costs, according to the Institute of Real Estate Management (IREM).

Facility managers can achieve operating cost reductions of 3 to 6 percent from energy use reduction projects. Installing energy effective equipment in the building for smooth functioning is highly recommended. However, it is equally important to take further steps to ensure that these components are not increasing the energy cost. Minor things such as unnecessary use of fans, air conditioners or lights should be discouraged. Motion-detecting technology can also be installed to automatically turn off fans, air conditioners, lights and vending machines at night.

Considering FM at the early design stage could potentially reduce the efforts for maintenance during the operational phase of facilities. Few efforts in construction industry have involved facility managers into the design phase. It was suggested that early adoption of facilities management will contribute to reducing the needs for major repairs and alternations that will otherwise occur at the operational phase. There should be an integrated data source providing information support for the building lifecycle. It is envisioned that Building Information Modelling (BIM) would fill the gap by acting as a visual model and a database throughout the building lifecycle. A case study of using BIM to design facility managers’ travelling path show that early adoption of FM in design stage with BIM can significantly reduce life cycle costs.