With detailed data, you can set benchmarks to gauge the effectiveness of your investments in your facility improvements.
Using the FCI.
Industry associations have teamed up to develop a standard benchmark forfacility capital planning, known as thefacility condition index or FCI. The FCI represents the ratio of deferred maintenance dollars to replacement dollars, providing a straightforward comparison of an organization’s key facility assets.
To calculate the FCI for a building, you divide the total estimated cost to complete the deferred maintenance projects for the building by the estimated replacement value of the current systems. The lower the FCI, the lower the need for capital projects funding related to the facility’s value.
For instance, if you calculate that the building’s FCI is 0.1, it means that there is a 10 percent deficiency. This is considered quite low within the industry. On the other hand, a calculated FCI of .7, or 70 percent deficiency, indicates that a building needs extensive repairs or even replacement.
Leveraging the FCI serves as a way to compare the buildings within your portfolio to each other. For large teams, it provides insight into why certain buildings may require more care from the facilities teams than others. As a result, you can prioritize your capital planning funding into buildings that require more TLC than others, based on the objective FCI.
In addition, it also gives you a way to establish target condition ratings. By having a target, you can set goals for what you wish to achieve with the investments you are making in the facility improvements.
When you leverage acapital planning software solution, you can enter the FCI information into the database.This will give you a comprehensive view of the necessary and recommended maintenance items and their associated costs across the facility portfolio.
As a result, you can analyze expected replacement dates and costs for the major building systems, which will serve as the basis of an effective and strategic facilities capital plan for your organization.
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In case you missed it, check out the other blog posts in the series:
- 7 Steps to Better Capital Planning.
- 7 Steps to Better Capital Planning: Data Gathering.
- 7 Steps to Better Capital Planning: Analyze Benchmarks.
- 7 Steps to Better Capital Planning: Prioritize Capital Projects.
- 7 Steps to Better Capital Planning: Funding and Defensible Budgets.
- 7 Steps to Better Capital Planning: Prepare for the Future.