Maximise the return on investment on your facilities and assets

One of the most significant expenses incurred in running location-based service delivery in the health and community services sector is the cost of providing and maintaining facilities. Whether you are a hospital, a provider of residential aged care, disability accommodation, or other facility based health and community services, it’s critical to ensure your facilities, and the required specialist modifications within them, are not just in good condition but also capable of providing those services to the highest standard.

To deliver the best business outcomes, including a maximum possible return on investment, asset management of these facilities and related components needs to shift from a 'condition' approach to a 'level of service' approach.

Done right, this enables facilities to rapidly adapt to the changing customer and staff expectations of service delivery. For example, the introduction of the NDIS (National Disability Insurance Scheme) forced many service providers to pivot their services and delivery, directly impacting on the assets used to provide them.

A 'level of service' approach evolves from simply assessing facilities maintenance based on the condition of the asset, to evaluating many asset parameters including capacity, fit-for-purpose, condition and frequency of use.

This is a strategic approach, requiring high-level asset management plans that consider the current condition and functionality of the asset, asset degradation, and the treatments needed to deliver its service potential. To be agile enough to keep up, this approach needs to be part of the long-term planning process and funding - rather than a reactionary change.

To get the most out of their facilities, service providers need to develop a holistic, enterprise approach to facilities management that considers the strategic, tactical and operational lifecycle of assets. This can be challenging in an environment where facilities management and its systems are siloed from the rest of the business.

While tactical asset management is all about delivering capital programs of work, operational asset management manages the ongoing maintenance of facilities, ensuring any compliance in the process. In contrast to both, Strategic Asset Management determines the optimised future spend to refurbish or upgrade existing facilities, as well as construct new facilities to meet future demands.

Done right, an optimised asset intervention program can be correctly seated amongst all potential projects on the organisation's radar - scored and ranked to provide a targeted program of projects to deliver maximum return on asset investment balanced with competing for discretionary projects and activities.

There are generally stakeholders throughout the organisation invested in the operational and financial management of its facilities. However, both the facilities manager and associated information management systems are not always integrated with the rest of the institution's corporate system architecture.

If you are operating with disparate systems for financials, building management and contract management, it is challenging to improve outcomes and long-term planning. Similarly, you will have trouble managing assets from the acquisition or capital construction, right through the operating life.

Using one integrated information system for all stakeholders offers a single source of truth and transparency across the entire organisation. It ensures the CFO has full visibility of facilities maintenance costs, utilisation measurements and operational costs.

A true enterprise facilities asset management system will allow an organisation to improve asset visibility and gain compliance, by ensuring all the components are operating cohesively and not in isolation. It will allow entire lifecycle management of the facilities - from capital project management to long-term strategic planning.

For best practice, you need to consider more than just the day-to-day management of buildings. To get the most out of your facilities, you need to be able to determine for the next twenty years or more, what you need to spend, on what assets, when, and why. This allows for a more accurate and scientific assessment of long-term capital planning, with the confidence that money will be spent on the right assets at the right time for the right reasons.

With the targeted list of projects in hand, the organisation should, in the same system, put these projects through a defined governance methodology including cost estimates, risks, benefits, issue management, change requests, schedules, work breakdown structure and budgeting.

Project delivery in that same system that encompasses tightly integrated financial transactions from sources such as contract schedules and claims, human resources and payroll timesheets, inventory and purchasing should seamlessly flow to asset capitalisation and operational handover.

Publish date

05 Nov 2020

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