Facilities executives, CFOs and other organizational leaders make decisions that require significant financial investment into their facilities portfolios and make profound impacts on the day-to-day lives of people in the greater community. To track the efficacy of these decisions, leaders need to keep a close eye on Key Performance Indicators, or KPIs. In this blog post, we’ll explore a few common facilities KPIs and why various organizations use them to optimize their physical assets, their budget allocations and their spending decisions.
Facilities Metrics vs. Facilities KPIs
Before we get going, it’s important to understand the difference between a metric and a KPI. A metric is a single data point. Common metrics include the gross square footage of your portfolio, the size of your maintenance staff and the condition of a building system. A KPI uses multiple metrics to measure portfolio performance. Common KPIs include operational costs per gross square foot, maintenance coverage per full-time employee and facility reinvestment gap.
Another big difference between a metric and a KPI is that while a metric provides data on performance without any context, a KPI measures progress toward a goal. Think of it this way: Total distance is a useful metric for an amateur runner, but the trend of his or her average pace is a useful KPI.
Space KPIs
Facility Condition Index
To get an idea of the overall condition of their facilities and the severity and costs associated with addressing needs, many organizations use the Facility Condition Index (FCI). Expressed as a percentage, FCI divides the cost of completing all required and renewal projects by the cost of replacing the entire asset exactly as is. The higher the FCI, the worse shape an asset is in.
The FCI is such a valuable facilities KPI because it gives leaders an objective way to demonstrate needs, secure funding for addressing those needs and show progress toward an ideal FCI they can set at the portfolio, asset or departmental level.
Space utilization rate
Measuring how often an asset is used during its available time tells an organization if it’s spending too much money and too much manpower maintaining a low-value space. It might also uncover opportunities to provide users with better experiences by making a sought-after space more available or reimagining a space to become capable of something better.
Read this report for insights into how college and university leaders can rethink their space utilization efforts.
Spend KPIs
Ratio of preventive maintenance to reactive maintenance
Imagine all your maintenance work as a pie chart. It’s vital to know how much of that pie is preventive maintenance and how much is reactive. Because preventive maintenance is by far the more cost-effective of the two choices, the general rule of thumb is that less than 25% of all maintenance tasks should be reactive. Any more than that, and you’re probably spending more than you need to.
Operational costs per square foot
This is a fundamental facilities KPI. Organizations must know what it costs to maintain their assets and the equipment therein on a day-to-day basis. In addition to benchmarking this KPI against your organization’s historical performance, it’s useful to compare your spending against that of your peers to see how you stack up to industry standards.
Check out Gordian’s Assessment and Capital Planning capabilities to see how they can help you set and reach your goals.
Staff KPIs
Maintenance coverage
Your staff can only be reasonably asked to cover so much area. Overstretch them, and you’re likely to find yourself discussing another KPI: employee turnover rate. On the other hand, if your staff has too little area to cover, you aren’t managing your personnel budget properly. This is another area where benchmarking your performance against that of your peers might prove useful.
Work order response time
Knowing how long it takes to complete a given work order sheds some light on the user experience. Do reported problems go unaddressed for a long time? Are there seasons when response times are slow? This KPI is also useful for understanding gaps in your process and uncovering opportunities for enhancing operational efficiency.
See all the insights, technology and expertise offers for effectively managing the building lifecycle in this comprehensive eBook.
Goals First, Facilities KPIs Second
This list of KPIs doesn’t approach completion. Not by a country mile. There are dozens of other performance measurements organizations can consider and track in support of their goals. It’s important to keep in mind that your goals must lead your KPIs, and not the other way around. After departments and functions have aligned on a shared mission, the work of selecting KPIs can begin. Once you’ve selected the right facilities KPIs, you’ll be able to measure asset performance, assess future requirements and demands, and clearly convey needs across your organization.
