Space is often the largest under-utilized asset for businesses and therefore is not a focus for cost saving initiatives. When the facility manager views the physical space as a strategic asset s/he is able to deliver more value to their organization through better operational effectiveness.
To maximize asset value, the facility manager should focus on cost effectiveness. In this post, we analyze how one can achieve cost efficiency and how IBM TRIRIGA can deliver cost saving opportunities.
Three cost saving opportunities
1. Cost Reduction
To reduce space cost you have two options: maximize the capacity of the existing space or increase the space utilization. Maximize the facility capacity by re-configuring the existing space. Or you can increase the utility levels by analyzing the existing space occupancy percentage throughout the day and begin initiatives to increase utilization.
For instance, telecommuting to work has becoming increasingly popular in the U.S with a 2015 Gallup poll stating that at least 37% of workers are participating.[i] Take advantage of a distributed workforce by transitioning to an agile work environment of shared spaces to reduce the cost per square foot per person. Such measures not only increase the utilization of your physical facilities but also accelerate the configuration of your workplace.
2. Cost Avoidance
Facility managers continue to grapple with shrinking capital budgets and an aging infrastructure. While new capital investments can be cost prohibitive, analyzing leases for termination or renewal based on criteria such as age profile, operational costs, and project backlog may present cost reduction opportunities.
Facility managers need to arm themselves with data to not only increase returns from real estate-related decisions but also improve their ability to respond to change. Cost optimization measures can help save millions of dollars by postponing new facility investments or informed leasing decisions.
3. Cost Recovery
Charging facility costs pro-rata to various business units based on their usage ratio provides an incentive to business units to contribute to space usage optimization. Cost recovery techniques such as internal chargebacks and indirect cost recovery will motivate businesses to work towards space efficiency.
How can IBM TRIRIGA help?
As the industry’s leading IWMS software, IBM TRIRIGA can help with your cost efficiency measures:
- Strategic facility planning reveals gaps between business demands and space availability and analyzes, ranks and recommends best fit facilities planning scenarios
- Scenario planning provides decision making support providing real-time visibility of current performance and models various future scenarios.
- Move management manages requests and execution with automatic capture and space allocation charge-backs to internal departments
- Shared workspace usage tracks and eliminates inefficiencies associated with common-use space
- Lease administration tracking and accounting tracks individual leases, notifies significant dates, and streamlines the lease renewal process and regulatory (FASB/IFRS) compliance.
- Capital project management Identifies capital program funding priorities and project risks, provides financial benefit and environmental impact analysis, and supports advanced project execution and control.
- Demand and Preventive Maintenance tracks and evaluates building and asset deficiencies and helps identify opportunities to extend the life cycle of building assets.
For more information on how ValuD can help you to optimize your facility inventory, contact our IBM TRIRIGA experts at firstname.lastname@example.org.