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FACILITY
MANAGEMENT
Budgeting and Key Performance Indicators
Deyan Kavrakov FRICS, CIPS
Managing Partner at TCM
9th International Facility Management Conference,
Sofia, Bulgaria, 2014
CEN FM STANDARD ЕN 15221-4
1000 2000
TCM © Deyan Kavrakov FRICS, CIPS
FM EXPENDITURE KPI
FM Costs
sqm/employee
Capital Expenditures
Costs of space provision
Operating Expenditures
Space & Infrastructure
Operating Expenditures
Consumptions
Operating Expenditures
People & Organization
Interest rates
Rent
Leasing rate
Depreciation
Taxes
Insurances
Workplace
Cleaning
Open grounds
Operation &
Maintenance
Sustainability
Waste Management
Water
Heating
Electricity
Info center, reception &
helpdesk
ICT
Catering
Logistics & Fleet
management
Other services
HSS&E
TCM © Deyan Kavrakov FRICS, CIPS
OPERATIONAL FM BUDGET
✓ Term
✓ Short-term - 1 year
✓ Midterm – 2-3 years
✓ Allocation
✓ Personnel
✓ Other Operational expenditures
✓ Budget process
✓ Program Budgeting
✓ Zero Based Budgeting
✓ Incremental Budgeting
TCM © Deyan Kavrakov FRICS, CIPS
CAPITAL FM BUDGET
▪ Life cycle costing (LCC) - TCO, CRV
▪ Term
▪ Mid-term – 2-3 years
▪ Long-term – 3 до 10 years
▪ Budget process
▪ Total capital expenditures pool
▪ Allocation among various projects competing
for corporate funds – ROI, IRR, NPV
▪ Priorities
❖ HSS & E
❖ Protect corporate financial integrity
❖ Completion of ongoing projects
❖ Maintenance or replacement of worn-out equipment
❖ Modernization of work processes
❖ New capacity with high expected ROI
❖ New capacity with average expected ROI
❖ Other projects
TCM © Deyan Kavrakov FRICS, CIPS
FACILITY MANAGEMENT BUDGET COST CENTERS (EXAMPLE)
Property costs
Interest rates, rent, taxes, 655570 31.7
insurance, amortization
Premises and facilities service cost
Bulding maintenance 141433 6.85
Technical maintenance 20050 0.99
Open grounds maintenance 13100 0.64
Alterations and fit out 109500 5.3
Cleaning 150000 7.26
Security 97900 4.74
Utilities 193510 9.36
Internal decoration 8950 0.43
Business support service costs
Archiving 3590 0.17
Reprograhics 199200 9.64
Stationary 48820 2.36
Mail room 50100 2.42
Transport and fleet 15460 0.75
Reception & porterage 15130 0.73
Business travel 14000 0.07
Furniture 24430 0.13
Business equipment 37430 0.19
Staff support service costs
Catering 317000 15.35
Gym 4500 0.22
Occupational health service 8130 0.39
FMhelpdesk 6510 0.31
Total 2,134,313 € 100
Cost centers Total costs in € Percentage of Budget %
TCM © Deyan Kavrakov FRICS, CIPS
IF YOU CAN’T MEASURE IT, YOU CAN’T
MANAGE IT.
Measurement is the first step that leads to control
and eventually to improvement. If you can’t
measure something, you can’t understand it. If you
can’t understand it, you can’t control it. If you can’t
control it, you can’t improve it.
PERFORMANCE MANAGEMENT
TCM © Deyan Kavrakov FRICS, CIPS
€ Gross FM Expenditure / 1 m² of Gross Built Area (Total Cost of
Ownership)
% Return on Investment
€ Operational Expenditures / 1 m² of GFA / tenant or user
€ Capital Expenditures / 1 m² of GFA
% Maintenance Expenditures / Replacement Expenditures
€ Utility Consumption Expenditures / 1 m² of GFA
€ Cleaning Costs / 1 m² of GFA
TOP FM KPI
Quality
Space
Sustainability
Satisfaction
Productivity
FACILITY MANAGEMENT KPI
Financial
Condition
Maintenance
Accessibility
Utilization
% Occupancy rate (Net Floor Area)
# Net Floor Area in m² / 1 working place / 1 user
% Percentage of Planned maintenance vs. Reactive maintenance
# Energy consumption – kWh / 1 m² of GFA
% Net Floor Area from Gross Floor Area
# CO₂ emissions, ton, annually
% Utilization rate
TCM © Deyan Kavrakov FRICS, CIPS
Pan Europe
€7581
17 m²
€449
€4376
12 m²
€398
€8521
14 m²
€604
€6273
15 m²
€414
€10020
16 m²
€622
€12143
26 m²
€468
€5483
17 m²
€323
€4031
14 m²
€281
€6617
19 m²
€344
€6169
22 m²
€286
€ Cost per person, annum
m² Space per person
€ Cost per m², annum
Benelux
Germany
Ireland
Italy
France
Poland
Spain
Switzerland
UK
EUROPEAN FM BENCHMARKS
TCM © Deyan Kavrakov FRICS, CIPS
KPI INFOGRAPHICS
FACILITY MANAGEMENT KEY PERFORMANCE INDICATORS
Objectives (SMART)
➢ Task Reduce TCO
➢ KPI % of annual TCO
➢ Target 10%
➢ Timeframe By Financial Year Еnd
➢ Responsible Facility Manager
KPI naming standards Value of Number of Percentage of
KPIs – start with symbol € TCO # failures % budget variance€ # %
TCM © Deyan Kavrakov FRICS, CIPS
!
TCM © Deyan Kavrakov FRICS, CIPS
Do Don’t
Bar Charts Pie Charts
Waterfall Chart Dark backgrounds
Line graphs Non-zero baseline
Bullet graphs 3-D graphs
Gridlines
Measures the percentage of Net floor area that are occupied by tenants/end users, from overall Net floor area.
А = # sq. meters of Net floor area that are occupied by tenants/end users B = # total sq. meters of Net floor area
Calculation formula (А/B)*100 Type of KPI Rate
Trend is negative, when: ˂ 85% ; 95% ˃ Target: 90% to 95% TCM © Deyan Kavrakov FRICS, CIPS
FM BUDGETING
AND KPI TRENDS
▪ Financial Management and Facility
Management – CFO and CFM
▪ Performance Management
▪ Technologies and software – CMMS, IWMS
▪ Sustainability - EMS
TCM © Deyan Kavrakov FRICS, CIPS

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Facility Management Budgeting and Key Performance Indicators

  • 1. FACILITY MANAGEMENT Budgeting and Key Performance Indicators Deyan Kavrakov FRICS, CIPS Managing Partner at TCM 9th International Facility Management Conference, Sofia, Bulgaria, 2014
  • 2. CEN FM STANDARD ЕN 15221-4 1000 2000 TCM © Deyan Kavrakov FRICS, CIPS
  • 3. FM EXPENDITURE KPI FM Costs sqm/employee Capital Expenditures Costs of space provision Operating Expenditures Space & Infrastructure Operating Expenditures Consumptions Operating Expenditures People & Organization Interest rates Rent Leasing rate Depreciation Taxes Insurances Workplace Cleaning Open grounds Operation & Maintenance Sustainability Waste Management Water Heating Electricity Info center, reception & helpdesk ICT Catering Logistics & Fleet management Other services HSS&E TCM © Deyan Kavrakov FRICS, CIPS
  • 4. OPERATIONAL FM BUDGET ✓ Term ✓ Short-term - 1 year ✓ Midterm – 2-3 years ✓ Allocation ✓ Personnel ✓ Other Operational expenditures ✓ Budget process ✓ Program Budgeting ✓ Zero Based Budgeting ✓ Incremental Budgeting TCM © Deyan Kavrakov FRICS, CIPS
  • 5. CAPITAL FM BUDGET ▪ Life cycle costing (LCC) - TCO, CRV ▪ Term ▪ Mid-term – 2-3 years ▪ Long-term – 3 до 10 years ▪ Budget process ▪ Total capital expenditures pool ▪ Allocation among various projects competing for corporate funds – ROI, IRR, NPV ▪ Priorities ❖ HSS & E ❖ Protect corporate financial integrity ❖ Completion of ongoing projects ❖ Maintenance or replacement of worn-out equipment ❖ Modernization of work processes ❖ New capacity with high expected ROI ❖ New capacity with average expected ROI ❖ Other projects TCM © Deyan Kavrakov FRICS, CIPS
  • 6. FACILITY MANAGEMENT BUDGET COST CENTERS (EXAMPLE) Property costs Interest rates, rent, taxes, 655570 31.7 insurance, amortization Premises and facilities service cost Bulding maintenance 141433 6.85 Technical maintenance 20050 0.99 Open grounds maintenance 13100 0.64 Alterations and fit out 109500 5.3 Cleaning 150000 7.26 Security 97900 4.74 Utilities 193510 9.36 Internal decoration 8950 0.43 Business support service costs Archiving 3590 0.17 Reprograhics 199200 9.64 Stationary 48820 2.36 Mail room 50100 2.42 Transport and fleet 15460 0.75 Reception & porterage 15130 0.73 Business travel 14000 0.07 Furniture 24430 0.13 Business equipment 37430 0.19 Staff support service costs Catering 317000 15.35 Gym 4500 0.22 Occupational health service 8130 0.39 FMhelpdesk 6510 0.31 Total 2,134,313 € 100 Cost centers Total costs in € Percentage of Budget % TCM © Deyan Kavrakov FRICS, CIPS
  • 7. IF YOU CAN’T MEASURE IT, YOU CAN’T MANAGE IT. Measurement is the first step that leads to control and eventually to improvement. If you can’t measure something, you can’t understand it. If you can’t understand it, you can’t control it. If you can’t control it, you can’t improve it. PERFORMANCE MANAGEMENT TCM © Deyan Kavrakov FRICS, CIPS
  • 8. € Gross FM Expenditure / 1 m² of Gross Built Area (Total Cost of Ownership) % Return on Investment € Operational Expenditures / 1 m² of GFA / tenant or user € Capital Expenditures / 1 m² of GFA % Maintenance Expenditures / Replacement Expenditures € Utility Consumption Expenditures / 1 m² of GFA € Cleaning Costs / 1 m² of GFA TOP FM KPI Quality Space Sustainability Satisfaction Productivity FACILITY MANAGEMENT KPI Financial Condition Maintenance Accessibility Utilization % Occupancy rate (Net Floor Area) # Net Floor Area in m² / 1 working place / 1 user % Percentage of Planned maintenance vs. Reactive maintenance # Energy consumption – kWh / 1 m² of GFA % Net Floor Area from Gross Floor Area # CO₂ emissions, ton, annually % Utilization rate TCM © Deyan Kavrakov FRICS, CIPS
  • 9. Pan Europe €7581 17 m² €449 €4376 12 m² €398 €8521 14 m² €604 €6273 15 m² €414 €10020 16 m² €622 €12143 26 m² €468 €5483 17 m² €323 €4031 14 m² €281 €6617 19 m² €344 €6169 22 m² €286 € Cost per person, annum m² Space per person € Cost per m², annum Benelux Germany Ireland Italy France Poland Spain Switzerland UK EUROPEAN FM BENCHMARKS TCM © Deyan Kavrakov FRICS, CIPS
  • 10. KPI INFOGRAPHICS FACILITY MANAGEMENT KEY PERFORMANCE INDICATORS Objectives (SMART) ➢ Task Reduce TCO ➢ KPI % of annual TCO ➢ Target 10% ➢ Timeframe By Financial Year Еnd ➢ Responsible Facility Manager KPI naming standards Value of Number of Percentage of KPIs – start with symbol € TCO # failures % budget variance€ # % TCM © Deyan Kavrakov FRICS, CIPS
  • 11. ! TCM © Deyan Kavrakov FRICS, CIPS
  • 12. Do Don’t Bar Charts Pie Charts Waterfall Chart Dark backgrounds Line graphs Non-zero baseline Bullet graphs 3-D graphs Gridlines Measures the percentage of Net floor area that are occupied by tenants/end users, from overall Net floor area. А = # sq. meters of Net floor area that are occupied by tenants/end users B = # total sq. meters of Net floor area Calculation formula (А/B)*100 Type of KPI Rate Trend is negative, when: ˂ 85% ; 95% ˃ Target: 90% to 95% TCM © Deyan Kavrakov FRICS, CIPS
  • 13. FM BUDGETING AND KPI TRENDS ▪ Financial Management and Facility Management – CFO and CFM ▪ Performance Management ▪ Technologies and software – CMMS, IWMS ▪ Sustainability - EMS TCM © Deyan Kavrakov FRICS, CIPS