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Facilities Managers are often under pressure to reduce FM costs in their organisations. This can be achieved by focusing on a few key areas, such as implementing predictive maintenance, using smart technology, and automating tasks. With FM costs rising and FM budgets shrinking, the need for cost-effective strategies has never been more critical.
Table of contents
Why is cost-cutting important?
Why should an FM be cautious about cost-cutting?
How can preventative & predictive maintenance cut costs?
7 ways smart technology can cut costs
How to improve project tracking to reduce costs
How negotiating with suppliers helps cut costs
Invest in your team to cut costs
Implementing a strategy for cost reduction
Why is cost-cutting important?
Beyond the obvious benefit of saving money, there are other clear advantages to reducing costs:
- Gaining a competitive advantage over competitors
- Improving cash-flow
- Implementing sustainable operations
There is a large potential for cost-cutting and optimising building operations without sacrificing quality.
Why should FMs be cautious about cost-cutting?
Reducing costs is only beneficial if it does not compromise other areas of your business. FM costs have risen significantly, so strategic timing and planning are essential for effective cost reduction.
Implementing cost-cutting measures in an unplanned way can lead to customer dissatisfaction, which could, in turn, affect brand image and loyalty.
How can preventative & predictive maintenance cut costs?
Preventive maintenance strategies are among the most impactful cost-reduction areas in facilities management.
They have a positive financial impact and, in comparison to reactive maintenance, can save up to 40%. Scheduled maintenance helps reduce expensive breakdowns and costly downtime. Proactive asset management can extend asset lifespan through regular maintenance.
Some facility managers are hesitant to implement preventive and predictive maintenance due to the associated upfront costs. However, the technology easily pays for itself within a year of implementation.
These returns happen because predictive maintenance uses condition monitoring tools, IoT sensors, data analytics, and machine learning algorithms to predict equipment failures before they occur.
Real-time monitoring systems provide facilities managers with the information they need to schedule maintenance at optimal times, preventing costly emergency repairs and unplanned downtime.
7 ways smart technology can cut costs
1. CAFM (Computer-Aided Facility Management)
Computer-Aided Facility Management systems have evolved from simple scheduling tools into comprehensive platforms that deliver measurable returns on investment.
CAFM systems leverage artificial intelligence to optimise workflows in ways that were impossible just a few years ago. Organisations can cut costs by 10%+ with smarter, AI-driven workflows that automatically prioritise maintenance tasks, allocate resources, and identify inefficiencies.
For facilities managers considering CAFM implementation, resources are available to help calculate potential returns. For practical implementation, read our CAFM guide.
2. IoT (Internet of Things)
The Internet of Things is revolutionising energy management in facilities, delivering savings that seemed impossible just a decade ago.
HVAC systems, which typically represent the most significant single energy expense in most facilities, have seen particularly impressive gains. IoT installations in HVAC systems have saved up to 70 per cent of energy use in some implementations.
The IoT helps reduce water use and provides a clear understanding of how your facilities are being used, at what times, and for how long.
3. Automation
Automation in facilities management delivers benefits far beyond simple labour cost reduction, though those savings alone are substantial.
Automation helps reduce labour costs, with some labour management programs showing a return on investment within 12 months.
The real power of automation lies in how it transforms work itself.
Automation helps reduce tedious manual processes and repetitive work by streamlining them and freeing up staff for higher-value activities. This shift lowers operating costs and, in many instances, improves employee satisfaction and retention.
Looking to learn more about automation?
4. Energy management
Smart energy management systems go beyond simple monitoring to provide actionable intelligence that drives real savings. These systems offer real-time tracking of energy consumption, enabling facilities managers to identify waste and optimise usage patterns in real time. The results can be dramatic: one organisation monitoring 146 priority targets achieved savings of £552,000 and a global reduction of 22 million kW across 12 sites.
Learn about successful energy efficiency in your buildings here.
5. Data-driven decisions using CAFM reporting
The facilities management profession has shifted from intuition-based to analytics-based.
Using insights for decision-making enables facilities managers to identify cost-saving opportunities that would otherwise remain hidden, track performance against KPIs for strategic planning.
Real-time analytics provide the information allowing facilities managers to respond to issues before they become expensive problems. For more insights on leveraging data effectively, read our detailed guide: Data-Driven Decisions Using CAFM Reporting to Optimise Your Facilities.
6. Workflow optimisation
Workflow optimisation through technology streamlines maintenance scheduling. This ensures that resources are deployed where they're needed most, while improved resource allocation eliminates waste and duplication.
Reduced response times mean problems are resolved before they escalate, and enhanced communication between teams prevents the misunderstandings and delays that often plague facilities management.
7. Mobile and cloud-based solutions
Facilities management is increasingly mobile and cloud-based. Mobile-first building operations are becoming the standard, with centralised apps enabling paperless approaches and easier communication with tenants. Complicated, restrictive spreadsheets are a thing of the past.
These solutions provide real-time access to facility data from anywhere. They enable remote monitoring that reduces the need for physical inspections and enables faster responses to maintenance issues.
The reduction in administrative overhead justifies the investment in mobile and cloud technologies.
How to improve project tracking to reduce costs
Effective project tracking is essential for controlling costs and delivering projects on time and within budget.
Seeing a project's status in real time allows facility managers to identify cost overruns before they spiral and to improve resource allocation across multiple projects.
Project tracking improves accountability and enables proactive management.
High-level dashboards, analytics, insights, and prescriptive recommendations suggest what should happen next, transforming project management from reactive to proactive.
How can negotiating with suppliers help cut costs?
Strategic supplier management has become increasingly critical for cost control, particularly in the current environment.
Modern technology enables more effective supplier management. Readily available information on SLAs and KPIs enables facilities managers to monitor contractor service delivery in real time, measured against contractual obligations to trigger penalties or bonuses. This transparency creates accountability and ensures that supplier relationships deliver value.
Best practices in supplier negotiation include:
- Consolidating vendor relationships
- Implementing performance-based contracts
- Conducting regular contract reviews
- Renegotiations for competitiveness
- Building long-term partnerships
- Reduce transaction costs.
Using a CAFM system can be beneficial because it enables you to track vendor performance objectively.
Invest in your team to cut costs without compromising quality
Investing in people is more important than ever; there is an industry-wide generational shift leaving many FM teams understaffed. Investing in your team delivers over time.
Reduced turnover costs eliminate the expensive cycle of recruiting, hiring, and training replacements. Improved efficiency through training means existing staff can accomplish more with the same resources. Better problem-solving capabilities emerge when team members develop deeper expertise, and enhanced use of technology multiplies individual productivity.
Centralised help desks
Implementing centralised help desks benefits the organisation. A single point of contact for all facility issues simplifies the user experience and reduces confusion. It improved response times and tracking. Then, analytics reveal patterns that inform strategic decisions.
Strategy for cost reduction
Assess: Begin with a comprehensive assessment:
- Review current spending patterns
- Identify inefficiencies and waste
- Benchmark against industry standards
- Analyse energy consumption
- Evaluate maintenance practices
Set goals: Establish clear, measurable objectives by defining specific and measurable targets. Set KPIs to track your progress, but make sure your goals are realistic.
Implement the plan: Roll out initiatives systematically, starting with high-impact, low-cost changes. Ensure all the stakeholders are engaged and aligned.
Continue monitoring:
Ongoing monitoring ensures sustained success:
- Track KPIs regularly
- Review cost savings quarterly
- Adjust strategies based on results
- Share successes with stakeholders
- Continuously seek improvement opportunities.
Don't compromise quality
By strategically implementing predictive maintenance, smart technology, automation, and data-driven decision-making, facilities managers can significantly reduce costs while maintaining, or even improving, service quality.
Combine technology investment, process optimisation, supplier management, and team development to achieve substantial cost savings while positioning themselves for future growth and success.