The dangers of cutting FM budget by Steve McGregor, CEO, DMA Group
The senior leadership teams across schools, colleges and universities have shouldered immense, yet routine pressures in trying to reconcile the financial and operational challenges of delivering education in a cost-down environment. Compounded by the unprecedented cost-of-living and energy cost crisis, worrying indicators that suggest a looming recession, these establishments are scrambling by cutting costs wherever possible.
Recent reports suggest that hundreds of schools are cutting teaching hours to cope with an average 106% increase in their energy bills (Metro, 2022) . Furthermore, 37% of headteachers fear that they’ll have insufficient resources by the end of 2023, a tragic warning that a potential wave of redundancies could be on the horizon.
Ahead of those brutally tough realities, senior leadership teams will also be forced to reduce any non-essential and discretionary spend to alleviate some of that inflationary pressure. But when it comes to cutting the costs of running and operating their buildings, there can be costly pitfalls, with potential legal implications, if undertaken without expert supervision. A little bit of knowledge in this area can be unintentionally dangerous, so it should be a cautionary note.
Beware of false economies
These harsh financial challenges understandably create an almost forensic attention to costs. We make buildings work better, so we are routinely supporting educational establishments to keep their buildings safe, functioning and legally compliant. When repairs and replacements are needed its usual for us to provide everything that’s required, including labour, materials and equipment right through to completion, which comes with the added value of warranties which may last 12, 24 or even 36 months depending on what’s been done.
However, we’ve increasingly encountered some management teams wanting to source cheaper parts themselves off the internet. It’s an understandable tactic, because parts can often appear less expensive online, but that’s not the whole story. If the wrong parts turn up, or they’re late, it will cause delays and further costs.
In addition, if your service provider schedules their labour to coincide with the delivery dates of parts/equipment you’ve purchased, your supplier will levy abortive charges if they don’t turn up on time or they’re wrong. Not to mention the adverse impact on getting your building working as quickly as possible. You will become another critical link in the supply chain, so is this a risk you can afford? Trusting your FM supplier to provide parts may seem a little more expensive, but it ensures there are clear accountabilities.
Obtaining and keeping records of guarantees and warranties for your parts is no easy a task either. It can be easily forgotten by your internal teams, who’s primary role is focussing on the day-to-day demands of operating your premises. Tracking long term warranties can save you money, but it isn’t easily achieved using spreadsheets and diaries, particularly if your own people leave. DMA uses its own unique digital technology, called BiO®, to inform and support our customers, our own teams and our service partners too. With the right service provider alongside you, we can keep track of all your guarantees and warranties and provide the expertise to know when parts are not working properly, to trigger warranty activation.
Equally, purchasing lesser standard of parts will save you initially, but the increases in running, maintenance and replacement costs over the longer term will be a false economy. These are tough dilemmas to reconcile, but buying the wrong or lesser quality kit will cost you more, or even worse damage your premises, risk the health and wellness of your occupants, not to mention the reliability of your building.
Press the help button
When you need help with the costs of operating your buildings, then engage with your existing suppliers. We are all acutely aware of the challenges facing our customers, we’re wrestling with them every day. Retaining your business in the current climate is key to us all, so we will always try and help. Engaging your service partner(s) will bring their expertise into the conversation. They’ll help you avoid the potential pitfalls, tackle things in different ways and even consider temporary cost saving scenarios because they’ll know what matters to you.
Of course, you cannot expect a great service partner to come cheap, but good FM suppliers will tailor their offering to suit your budget and needs as far as they can and legislation will allow. Asking your suppliers what you could be doing more efficiently could make a big difference.
Avoid becoming a Jack-of-all-trades
It’s clear your primary focus is teaching your students, however some customers have created large and expensive internal manage-and-deliver estates and maintenance teams, which is counter-intuitive to the skills and capability that exists supply-side. We imagine this strategy will rightly come under closer scrutiny, as there are big savings to be made and added value from adopting optimised and proven outsourcing models.
Retaining a small intelligent senior team that knows how to reliably outsource building and estates maintenance will be far more cost efficient in the long-term. Having the right service provider under long term service contracts with the right experts by your side when it matters most will provide measurable added value.
Our customers are grateful for our contributions when crisis hits, because our additional resources, expertise and tech-enabled know-how comes to the fore to provide fast and effective support.
Making buildings work is often oversimplified, but it’s complex, with many moving parts and is shrouded in legislative compliance and dire personal consequences for getting it wrong.
Getting our people at the right place, at the right time, every time to fix things first time isn’t easy. Our engineers need the right location, contacts, information, instructions, tools, parts, equipment, access, and training. Making it run like a reliable Swiss watch demands clear processes. But how can we make that happen? The answer is through technology - it’s the only way to drive uber efficiency and great service quality at scale.
At DMA, we’ve used most off-the-shelf computerised maintenance management systems (or CAFM) for over 20 years, but our experience is that they were expensive, over-promised and under-delivered. Market research over 15 years has confirmed that maintenance customers in the UK have been unsatisfied with service, so we decided to fundamentally change things for the better by building our own digital platform and invested £1.5million over the last 5 years.
It’s called BiO® and we’ve automated all of our business processes to provide transparent real-time information so that our customers know what’s going on every moment of every day. And what’s more that performance data, documents and status information is available to everyone, anywhere, anytime, on any device at no cost. Our in-house teams have become 50% more efficient, and our engineers have become twice as productive.
By automating the repetitive mundane tasks, we’ve allowed our engineers to spend their time doing the work that really matters, further enhanced with smart calls-to action to let our customers know what needs to be done when.
For further information please visit https://www.dma-group.co.uk/