We are going to continue our session where we expand on the questions and answers from our recent Ask Bill Anything webinar (which you can replay here).  Today’s post deals with a key puzzle at the heart of every facility manager’s work, estimating Operations and Maintenance (O&M) costs.

The question: How can O&M cost estimates be determined for in service assets and for new assets when there is no reliable historical data for O&M cost estimates?

This is a topic that often leaves people scratching their heads and looking for the best strategies to tackle the beast. My answer below serves to shed some light on this.

Picture this: you’re tasked with determining O&M costs for both existing assets and shiny new additions to your organization’s portfolio. Where do you even begin? When it comes to estimating O&M costs, facilities managers often struggle with historical data scarcity.

If you struggle with having historical data, there is some documented guidance out there you can use. The Building Owners and Managers Association (BOMA) has some information around O&M costs, that can be used as a benchmark or as a guideline to help you navigate O&M cost estimation. There are other industry standard numbers around O&M that organizations can use to try to budget for it, but the best way to look at it is if you’re already involved in a facility, whenever possible, track and use the historical information available and then if you have goals to try to improve upon O&M costs, set a level of service to try to reduce costs around certain things while also maintaining those levels of service.

In tackling this challenge, we must also acknowledge the variability that is intertwined with O&M requirements. As I often say, no two facilities are created equal. Take, for instance, the typical recreation center. One may be mostly dormant and used only sporadically, while another hums with activity day and night, serving as a place for community engagement. The same elements, the same pieces of equipment, in those two different buildings are going to require different, reactive, and preventative maintenance activities.

So here is my point: usage dictates maintenance needs. It’s a simple concept really. Whether it’s the special care taken with a well-used piece of equipment or the recalibration of systems to match a building’s evolving program, every maintenance activity is intricately linked to the ebb and flow of daily operations.

This is often a challenge on the preventative maintenance side of things. If you want to build a preventative maintenance plan, it’s a little easier to budget for that because you’re dealing with the proactive things that you’re going to do, not the reactive stuff that’s going to come up and catch you off guard.

So for preventative maintenance, if you have a list of tasks and you have approximate duration and you know your labor costs, you can start to budget for that aspect of it a little bit more reliably.

Until next time, keep those facilities humming, and may your O&M estimates be ever accurate and true.