In today’s world, it seems like finances are tighter than ever, and facility budgets are no exception to this. Successfully managing and allocating a facility’s budget is a complex and challenging task, and it should be of the utmost importance to facility managers to ensure every dollar is being productively utilized.

However, despite best efforts, wasted spend can still occur in various areas and frequently goes unnoticed. We will identify areas where unnecessary spending may be occurring and provide actionable insights to address these inefficiencies. 

#1: Inefficient Energy Usage

Energy inefficiency can stem from a number of different sources, including (but certainly not limited to) lighting, HVAC systems, equipment, and machinery.
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Obviously many buildings are becoming “smart” in order to prevent this. However, changes such as these across the entire facility can take time to implement and typically cost more money up front. Our top 2 recommendations are:

• Ensure you schedule regular maintenance for HVAC, lighting, and other relevant systems that could be unnecessarily dropping dollars from your budget.
  
  
• Put someone on your team in charge of watching and improving processes around energy efficiency. A watchful eye can do a lot in the long run.

#2: Unnecessary Unused Space

With 58% of organizations following hybrid work models, underused space is a more relevant issue than ever. Whether it’s empty spaces, unused conference rooms, storage areas, or even redundant office space as a whole, unnecessary space can be a major sunk cost.

Downsizing is a great option for many who do not have a mandatory in-office policy. However, you can make a difference without downsizing the space. Our top 2 recommendations are:

• Reconfigure office space for better use. We recommend you do this by watching the trends during the day of where people naturally go and turn to in order to identify any areas that may be ideal for a new configuration.
  
  
• Understanding utility usage and occupant comfort can be a great way to curb wasted spend. In fact, you could even consider leveling up your occupant experience by applying real-time data from occupants with system integration through a software like CrowdComfort.

#3: Poor Vendor Management

At the surface, vendors may appear to be offering favorable pricing for their services. However, some may actually be overcharging you, not actually providing service, or giving you the runaround on actual results without you being aware.

Many vendor agreements stem from multi-year relationships that were initially well established. Though, over time these can sour due to key players no longer being in place and should be evaluated regularly. Our top 2 recommendations are:

• If you believe you may not be getting what you are paying for, ask for a validation of services. Validate it yourself. Consider using a third party software to really get a glimpse as to your internal operations.
  
  
• While it may seem costly at first, establishing specific services to take place in-house rather than through a 3rd party can drive major savings and bring the power of quality control into your hands.

#4: Reactive Maintenance Vs. Preventative Maintenance

Maintenance is a critical and necessary part of facility management, but following a reactive maintenance style, when you only fix something when it breaks or malfunctions, can be extremely costly.

In order to avoid this, we recommend switching to a predictive style of maintenance, where things are fixed and maintained ahead of schedule to prevent future issues. Our top 2 recommendations are:

• Implementing a facility management system capable of showing when, where, and why something needs to happen is a common way to streamline this.

• Ensure staff are adequately trained on the work that needs to take place in order to minimize human error in the maintenance process. Everyone can imagine what it would be like to have a plumber set up the electrical in your house.
  
  

While this is by no means an exhaustive list of potential sunk costs that can arise in a facility, it is a list of areas that budgets are commonly overallocated towards. By using this list as a loose guide to evaluate your own budget, money can be saved and used elsewhere to improve efficiency and drive real value.