Facility management is a huge cost to business – according to CBRE, buildings and facility management services represent up to 25% of some organizations’ total cost. It’s little wonder then that FM is often under the spotlight when it comes to cost-cutting measures, despite the fact that this department’s responsibility is wide and growing. Gone are the days when FM was solely responsible for maintenance and cleaning, teams are now tasked with improving sustainability, meeting copious compliance measures and adopting smart building technologies.
CMMS software is helping FM teams manage their sites more effectively than ever before through rapidly evolving functionality and the provision of in-depth data analysis. It offers a multitude of ways to monitor, control and even reduce costs but teams often don’t use their systems to maximum effect and therefore miss out on substantial, ongoing savings.
Welcome to the first in our new monthly blog series, providing ideas on how CMMS software such as QFM can save sites thousands of dollars (and pay for itself in the process).
A necessary expense
This first blog in the series will look a subject that can pose large costs as well as risks to FMs: contractor management. Whether for in-house teams or service providers, contractors provide specialized knowledge, skills and tools that allow FMs to focus on their core activities. However these services come at a price – a contracted engineer could cost double the equivalent daily rate of a salaried engineer – and as they don’t work directly with the main team, service levels can be hard to manage. For more on this, read our blog: Contractor Management Made Easy.
How can CMMS help manage contractor costs?
Contractors are paid to do a job, often with several different companies employed to work on different assets and services. It’s often assumed that the work is completed as agreed but with the right data in hand, QFM allows you to see what’s actually happening.
- How much contracting costs
At a fundamental level, CMMS makes it easy to see the total amount spent on contractors over any given time period, without digging through paperwork. And from here, the savings can begin.
Users can filter what they need, such as spend per contactor, service type (for example cleaning or water treatment) or by site. But the biggest savings are often made when looking at spend vs estimate; users can drill down through the data to see any services which have significantly exceeded the estimate, which contractors are regularly over-changing, and evaluate specific contactor performance to see how well each job is being done.
The examples below show a large discrepancy in June between estimated and actual costs, mostly coming from HVAC services. We can further drill down and see it’s Contractor 6 who is over-charging. This data provides the opportunity for discussion to make improvements in this areas, or alternatively, look for a different contractor.
- Incomplete work
Once work is passed over to a contractor there is often little visibility of what happens next as they aren’t directly accountable to the site facility manager. However, a CMMS app is an easy way to monitor performance.
Contractors can be given access to the site’s CMMS system (with access permissions restricted as required) so they can receive and complete work via their mobile or tablet device, and be able to access pertinent information to help them with the job such as full work order details and asset history. Crucially, this allows FMs to track work with more accuracy, and establish which jobs have not been completed, but have been charged for.
- Missed deadlines
Via an app, start and finish times for each task are recorded in real time, providing an overview of how long the job took. Reporting will show the percentage that met the SLA, and if it is not agreeable then negotiations can take place.
FMs can drill down into the data to understand if SLAs tended to be failed by a particular contractor (in which case a replacement could be requested to keep standards high) or around a particular asset which could show lack of expertise by the contracting company.
- Scope of work required
When tendering for a service contract, it’s important to understand what’s involved to set expectations from both sides. FM software can show what PPMs have been conducted over the last year for the set of assets in question to inform a realistic quote; avoiding overpaying for inflated man-hours.
Performance-related contracting
Data is the FM’s best friend when it comes to negotiating. Accessing this data gives the power to identify where change is needed. Whether its need for service improvements, moving certain suppliers to performance-related contracts, better managing quotes vs invoices, or no longer paying for incomplete works, these factors add up quickly to provide substantial savings.
