It has always been essential for chief financial officers to understand the total cost of leasing, operating and maintaining their company’s office portfolio. After all, real estate is the second largest expense for most organizations. Up until recently, many of the variables that played into that top line cost were assumed to be like parallel lines, existing within the same cost center but never touching one another. A CFO could pull up line-item reports showing how much was spent on things like electricity, waste management, or equipment repairs during a given period. But understanding whether and how these different overhead expenses influence each other was a time-consuming process.
Now, workplace management technology is giving CFOs better visibility of the myriad elements that make up the real estate cost center, and how the interplay between these variables can have unexpected impacts on the bottom line.
In this post, we’ll look at three ways FM:Systems workplace management solutions can help CFOs identify major cost saving opportunities across their organization’s real estate portfolio.
In a recent study by Forrester Consulting, in collaboration with Johnson Controls, 90% of respondents said their building systems and equipment are not fully integrated and it’s costing them time, people and money. Lack of integration is causing 67% less efficiency, 62% less customer loyalty and 52% less revenue.
Real Estate Costs are a Dynamic Ecosystem
CFOs know better than most that expenses rarely exist in isolation. That’s especially true when it comes to an organization’s real estate portfolio. Downsizing your office space to reduce your rent? A smaller space means fewer light fixtures and less area to heat or cool, so there’s a good chance your energy costs will go down, as well.
That’s an easy one, but there are many other examples of expenses that interact in ways that aren’t so straightforward. Workplace management solutions can seamlessly integrate with existing systems, offering CFOs a holistic view of space utilization, operational efficiency, and sustainability performance. This centralized data enables them to make informed decisions faster.
Poor Equipment Performance Can Spike Your Energy Bill
According to the U.S. Department of Energy, 30% of energy used in commercial buildings is wasted. That means that roughly 30% of the money organizations spend on electricity is also wasted. Much of that waste is due to office spaces continuing to be lit or air conditioned even when they’re unoccupied.
But a good portion also comes from improperly-maintained equipment having to work harder to do its job. FM:Systems workplace management solutions can give finance teams a combined view of energy spend and equipment performance data to help pinpoint and address energy (and money) waste due to suboptimal equipment performance.
Indoor Air Quality Can Lower Productivity
While real estate may be the second biggest cost center for most organizations, payroll is the first – so it makes sense to take care of your people at the same time you’re taking care of your portfolio. The Environmental Protection Agency reports that poor indoor air quality (IAQ) can cause headaches, dizziness and fatigue. You don’t have to be a CFO to know that those conditions negatively impact productivity, not to mention employees’ overall health and wellness. Environmental sensors, an essential part of FM:Systems workplace management solutions, collect data on temperature, humidity, noise, particulates and other factors affecting IAQ in a workspace. That data can then be combined with utilization and occupancy data to reveal if the climate indoors has got staff under the weather, helping CFOs take action where needed to improve employee well-being and productivity.
The Cost of Environmental Reporting and Compliance
Environmental reporting and building performance laws are making sustainability a major factor in real estate operations and decision making. The most substantial costs associated with these regulations may be the stiff penalties for non-compliance, but avoiding those fines is not cheap. From the expense of hiring additional staff and outside consultants to help navigate evolving requirements, to the intangible cost of having to deal with another distraction from the company’s core mission, the financial burden these laws represent for businesses is adding up. FM:Systems workplace management solutions can save companies money by streamlining the production of reports, ensuring that the information is timely and accurate, and supporting compliance with evolving regulations.
Of course, FM:Systems technology can also help organizations discover innovative ways to cut energy consumption, water waste, and trash destined for landfills. These efforts contribute to achieving Net Zero goals, providing added value beyond just avoiding penalties.
Identifying Cost Reduction Opportunities is Just the First Step
FM:Systems workplace management solutions do more than just deliver new insights. They help CFOs take action on those revelations and drive substantial cost reductions. How? Reports generated using good, timely data are hard to argue with. With accurate, real-time data, CFOs can make confident, data-backed decisions quickly, improving operational efficiency and agility. FM:Systems platform’s no-code configuration flexibility also allows organizations to adapt swiftly to changing business needs—without relying on costly customizations or external support.
Conclusion
Office buildings and portfolios are a major expense, but they’re also rife with cost-cutting opportunities. FM:Systems workplace management solutions, integrated with financial oversight tools, can help CFOs and finance teams identify and capitalize on those opportunities. And with a trusted partner offering ongoing support, CFOs can focus on what matters most: driving their organization’s financial success.
If you’re budgeting for your next fiscal year and have questions about how workplace management and smart building solutions can help you optimize your portfolio, contact us today.
