Facilities Management

Manage wisely to survive the slowdown

Depending upon your industry, whether it's banking, insurance, or manufacturing, for example, facilities costs can range from 10 to 30 per cent of a corporation's annual operating budget. Understanding facilities costs is vital to any strategy aimed at surviving an economic slowdown. Facilities costs represent the expenditure associated with provision, operation and maintenance of the built environment in which the corporation conducts its business. Key drivers include occupancy costs (lease rent, service charge, rates and taxes, electricity, property insurance), office remodelling and fit-outs, furniture, fixtures, repairs and maintenance, cleaning and housekeeping.

For a 30,000-square-foot Class A office building located in Port of Spain, typical facilities costs disaggregated into its components are illustrated in the box below. Any strategy aimed at reducing facilities-related costs should be based upon an understanding of these costs and their contribution to total facilities expenditure. Those items whose costs contribute significantly to overall facilities expenditure are likely candidates for cost savings.