The second step to create value and cut occupancy costs in your workplace

13 September 2022    By  Mark Williams  

The second step to create value and cut occupancy costs in your workplace

In my previous post, I outlined the first step to reduce your property operating costs – Gather and understand the levers that impact cost.  Now, it’s time to take the second step – Analyse.

We now begin to analyse the data uncover the size, shape, and scope of the opportunities for reducing costs.

Analyse

We now begin to analyse the data uncover the size, shape, and scope of the opportunities for creating value and reducing costs.

Partition the costs into Asset quality and Service quality

To help you understand the size and shape of your opportunity, begin by partitioning your costs into two categories - asset quality and service quality.  Partitioning these costs helps you identify, understand, and interrogate the reasons for your spend. 

It’s likely that some 80% of your Corporate Real Estate, Facilities, and Workplace costs are building quality related - and, generally, fixed for five to ten years. So, extracting maximum value from the 20% you spend on service quality - making your visitors feel welcome and valued and ensuring your people are engaged and empowered - is essential for your operations.

Allocate historic costs

Having created the framework to examine asset quality versus service quality, next, allocate your spend for the last five years into each of the components.  Remember to include salaries relating to these works as it helps identify underspend, overspend, workloads, and duplications in costs.

Look at the levels and trends

After you’ve partitioned and allocated your costs, examine the various impacts and patterns of your spend.  Ensure you understand the levels, trends, and benchmarks for your Corporate Real Estate, Facilities, and Workplace costs and the impact of each component cost for your organisation.

Please let me know your thoughts.  If you would like to receive all five steps just DM with the message “Five steps”.  Good luck with your analysis. 

#workplace, #outsourcing, #collaboration, #corporaterealestate, #facilitiesmanagement


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