One of the benefits of gathering accurate facility data is that the true condition of the facilities portfolio becomes clearer, providing a benchmark to analyze the impact of investing in facility improvements.
This benchmark, developed by industry associations, is known as the facility Condition Index(FCI). The FCI is the ratio of deferred maintenance dollars to replacement dollars and provides a straightforward comparison of an organization’s key assets.
The FCI is an ideal tool to quickly compare the condition of assets across a portfolio or against industry standards, and help with further facilities planning. But, spreadsheets lack a system of automatic calculations around the FCI.
Calculating the FCI.
To calculate the FCI for a building, divide the total estimated cost to complete deferred maintenance projects for the building by its estimated replacement value. The lower the FCI, the lower the need for remedial or renewal funding relative to the facility’s value. For example, an FCI of 0.1 signifies a 10 percent deficiency, which is generally considered low, while an FCI of 0.7 means that the building needs extensive repairs, renovation or replacement.
For future facility planning, the FCI can be used to determine the effectiveness of capital plans and budgets, clearly showing whether critical needs are being addressed and overall deferred maintenance is being reduced. Facility metrics like the FCI allow facilities managers to compare similar buildings to each other and establish target condition ratings. Comparing buildings analytically can also highlight the buildings that are in the greatest need for updates, repairs or replacement.
Facility teams and managers should work together to establish target and minimum condition standards for various asset classes. Certain types of buildings, such as operating rooms and classrooms, are crucial to the organizational mission and call for a better target FCI. An FCI analysis can show the direct impact of investment decisions.
The FCI is calculated automatically in the Accruent capital planning software, VFA Facility, using data gathered from facility condition assessments. In Accruent's solution, this data provides a complete view of the necessary and recommended maintenance items and their costs across the facility portfolio, as well as the expected replacement dates and costs for major building systems.
This information can then serve as the basis of an organization’s strategic facilities planning and capital budget plan. Best of all, the fact that the FCI is built into the capital planning software means there is no risk of formula errors or wasted time.
Download the white paper "The 5 Limits of Spreadsheets for Facilities Capital Planning", to learn more about the key problems of managing your facilities with spreadsheets.
Understanding the benefits.
Facilities managers often ask us why they would need something beyond spreadsheets for their facility capital planning. While they suspect that there could be a better way, they are hesitant to jump to a new system without fully understanding the benefits.
Accruent's capital planning software features rich functionality designed to help optimize capital budgets, including:
- The ability to easily model scenarios to assess and compare the impact of alternate funding strategies on building condition.
- A systematic ranking methodology that includes pair-wise comparisons to effectively link requirements to organizational priorities.
- Centralized requirements across buildings and sites that help identify opportunities to cost-effectively bundle projects and determine key relationships between them.
- Business intelligence dashboards and reports that provide the insight needed for better decisions by stakeholders across the organization.
Every day, facilities professionals like you see the limitations of using spreadsheets for their facility capital planning. The inability to systematically measure performance is just another reason to move beyond spreadsheets.
You can no longer rely on spreadsheets to measure the impact of spending on the overall condition of your facilities portfolio. Without a centralized platform and systemic calculations, it is difficult to benchmark your conditions today, and even harder to measure your facilities planning success.
Want to read more on this topic? See these blog posts:
The Perils of Manual Data Entry in Facilities Capital Planning
How Spreadsheets Limit Facilities Capital Planning Collaboration
Facilities Managers Won’t Find Cost Estimation Norms Data in Spreadsheets
Spreadsheets Lack Functionality Facilities Managers Need