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Issue management: Are you paying for a tech tool or investing in an operational solution?

December 1, 2015 by Leave a Comment

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Photo Credit: LendingMemo, via Flickr.

Like offensive linemen and line cooks, facility managers only get noticed when something goes wrong. That’s why they need the right tools to properly care for equipment, provide oversight of vendors and ensure that tenants remain happy.

Many organizations turn to technological tools to help manage their buildings. These tools have the potential to help automate parts of processes for managing maintenance on mechanical systems, critical power systems and other building infrastructure. They also have the potential to provide support in structuring issue management—be it changing a light bulb, dealing with a temperature issue, cleaning up a coffee spill, or getting support for an IT issue.

Those tech tools comprehensively track, resolve, and close out issues. Additionally, these systems often serve as a primary way that building operators communicate and interact with their tenants.

Simply put, the goal of a technology tool is to help you run your facility (and your business) more efficiently—by managing your equipment, tenants and vendors.

However, there’s a problem: A technology tool is not an operational solution. Real estate organizations, for example, often underestimate or don’t even consider the amount of employee hours necessary to properly administer, tweak, and update the tool.

Long-term, your platform should match the dynamic nature of your building—given that your tenants, equipment and staff will all change over time. Is your system positioned to help you, or is it part of what needs to change?

An operational solution will do a great job of reducing risk, saving time and money, and preserving assets—if you invest appropriately.  A technology in and of itself can’t reach desired outcomes without the appropriate investment of people and process.  You need to consider how you’ll administer and staff the system and build the right processes because, if you don’t, you’re not going to achieve the business outcomes you’re expecting.

Investment or expenditure?

Most organizations take one of two paths with their issue management solution: under-investing or internalizing the costs.

Those who under-invest in the infrastructure necessary to make their issue management solution successful often run into issues with tenant satisfaction, vendor performance, maintenance scheduling and tenant bill-back, among other problems.

Then again, internalizing the necessary costs isn’t easy either—someone has to answer the phones, input the work orders and follow up to make sure they’re addressed. This labor burden can add up to dozens or hundreds of hours in a single building or thousands of hours across a portfolio, far more than the one-time cost of the technology tool itself.

All that said, there’s also a third way: Outsourcing these back-end administrative tasks to an expert third-party that is dedicated to issue management.

Outsourced issue management: What does it look like?

For example, at a large national REIT (real estate investment trust) that manages over 15 million square feet of property, a technology-only platform led to some significant tenant satisfaction issues and administrative challenges.

However, outsourcing the REIT’s issue management needs to a third-party system improved occupant satisfaction scores, increased tenant bill-backs by over a million dollars and reduced operational overhead.

The shift to outsourcing to a third-party provider improved this organization’s labor efficiency to such an extent that they reduced their operational overhead by twenty percent. For example, highly-trained engineering staff didn’t need to spend as much time answering phone calls and following up with tenants. This helped the company optimize their staffing levels and reduced overhead for their portfolio by $1 million.

This saved time and money can be put to good use. For example, this company had several account coordinators whose job was dominated by administrative tasks like answering calls, entering data into the system and following up on work orders. After the organization switched to an outsourced solution, those staff members were freed up to perform regular check-ins with their tenants to preemptively address any of their concerns.

Additionally, one of the best outcomes a well-managed issue management system can provide is good reporting and data. For example, when preparing to sell one of their properties, the REIT was able to quickly pull all of their maintenance data from the past several years.

This served two purposes. First, the internal due diligence team saved a lot of time, because all of their maintenance data was available via their well-curated database. Second, this data conclusively showed that the building had been well-maintained, which helped them maintain their high market-rate price. The company estimated that they saved six figures on this sale due to this data alone.

Invest like it’s your business—because it is

Remember, issue management solutions are investments, not one-time purchases. Invest appropriately, and you’ll see returns in tenant satisfaction and labor efficiency. As you consider your own building, we encourage you to ask yourself: What’s the best way to invest in an issue management solution to achieve the results you’re looking for?

Brandon Rogers, a Seattle-based account executive at McKinstry, focuses on issue management solutions for corporate and commercial clients. He can be reached at brandonr@mckinstry.com.

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Filed Under: Big Ideas, Home, Technology Tagged With: Efficiency, Facility Management, Investing, Issue Management, Technology

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