If the tools and methods are out of date property owner is most likely losing money and at the same time the value of the property shrinks.
Global real estate market forms the world’s largest asset class. It’s even bigger than the market of stocks, bonds and shares. Still it is surprising how poorly property owners take care of their investments and how much they let market value and profits vanish in the air.
It is not likely that owners let their properties to deteriorate deliberately. In many cases they are simply missing the tools and methods how to control this. Business wise there’s also continuous demand to increase profit margins. In real estate business it’s easy to do this by cutting the operational costs even though it is generally acknowledged as short-term thinking.
Maintenance is too often seen only as an expense, not as an enabler for real estate business as it can be. The facility managers are under continuous pressure to cut operational costs, improve service level, save energy, be more sustainable etc.
What makes it so difficult to save costs and improve maintenance practices continuously in a sustainable way? Facility management segment comes somewhat behind of these global megatrends such as digitalizing the processes. Still today it’s common that there is no availability to centralized up-to-date data indicating how the facility management processes function and properties are operating. And as they say: What you can’t measure you can’t manage. What you can’t manage, you can’t improve.
Facility management’s approach is too focused on single building level. The used CAFM solutions don’t generate strategical portfolio level KPI’s for management. Neither do they combine data such energy efficiency and technical operability from other solutions. Lacking these essential features CAFM solutions don’t get strategical status and are incapable of creating top management add value in the real estate business.
What is the most important ingredient to solve this paradigm? The solution is very simple! It is reliable and up-to-date data supporting management decision making and giving the whole portfolio level visibility and control.
How to get the required data? Firstly, the only realistic way to generate data in large scale is to digitalize your facility management. Secondly, the only way to collect the data efficiently is to centralize your data management.
How does this all relate to maintaining the property value? Direct influence is optimized operation costs (Opex) and avoided maintenance backlog (Capex). Indirect but often more significant is the influence on lease level which again has direct influence on property value. Well maintained and technically highly operating facilities result as good end user satisfaction and happy customers.
Veikko Martiskainen is the head of Granlund Manager international business. Veikko has more than 25 years executive level experience of CAFM/CMMS softwares, business development as well as property management consultation. Veikko enjoys to explore different cultures and countries both professionally and privately.