See how much savings per unit area has been saved over time by those who have benchmarked their facility metrics. Also see a detailed example of the impact of benchmarking on a facility's preventive maintenance ratio.

While the amount of money saved through benchmarking will of course vary, depending on a variety of factors, the information presented here should be helpful in determining the potential magnitude of savings that could be realized through benchmarking. A large variable is how effectively one's facilities are already being managed; another variable is the cost of utilities and labor in one's geographic region.

With that said, we believe that nearly everyone should be able to save through benchmarking; it is only the amount saved that will vary depending on the factors in the previous paragraph. One of the reasons for this is, as you will see below, even in the fifth year of benchmarking, the median company in the database was able to increase its savings by over half as much again over its savings in the first year.

Why are there additional savings in each year of benchmarking? In the first year, one identifies the most obvious best practices to implement, and substantial savings should be achieved. Once those best practices are implemented, one will be able to compare one's performance to a different set of buildings—namely those who have reduced operating expenses and who have implemented more best practices than the original building had done prior to benchmarking. As a result, one is expected to identify different best practices than those that were identified at first. Therefore, one will achieve additional savings each year of benchmarking. See the section below for more details about the additional savings.

The numbers used in the analysis below are derived from those who have been benchmarking for at least five years. The benchmarking has been done using identical principles to those of FM BENCHMARKING, including the use of best practices. Here is some more information about those in the database being analyzed here:

• The group represents 58 companies with 238 buildings.
• The median facility size for the group is 468,000 sq. ft.
• The building type for the group was office space.
• The key benchmarking metrics for the group were utilities, maintenance and custodial costs.

The operating costs for the metrics studied represented 86% of the median operations spending in 2008, as shown in the following chart:

Spending for the areas of utilities, maintenance and custodial represented 86% of the median operations spending in 2008. When security spending was factored it, the areas accounted for 97% of the 2008 spending.

As seen in Figure 1 below, the median savings for this group was $0.17 per square foot after one year of benchmarking. After the second year, the median company uncovered additional savings of $0.14 per square foot, for a total of $0.31 per square foot for the first two years of benchmarking. Continuing through the rest of the chart, over the course of five year, the median company was able to reduce its expenses by $2.04 per square foot. Given the median facility area of 468,000 square feet, the median savings after five year was just under $1 million ($979,200). Considering that the maximum cost of FM BENCHMARKING is only $375 per year for a building (less for multiple buildings), the median company would have paid only $1,875 for the benchmarking to realize nearly $1 million in savings!

Figure 1. Incremental and cumulative savings for the Median (50th percentile) Company in the benchmarking database. Total savings for the median company over five years was $2.04 per square foot; the median size of facility was 468,000 square feet.

Figure 2 below is similar to Figure 1, except that instead of being for the median company in the database, it is for the company in the 70% percentile (i.e., only 30% of the companies outperformed these numbers). This means that most people should expect to achieve the savings shown in Figure 2.

Figure 2. Incremental and cumulative savings for the 70th Percentile Company in the benchmarking database. Total savings for the company over five years was $1.22 per square foot; the median size of facility was 468,000 square feet.

In the introductory paragraphs of this page, we demonstrated the concept of why each year should expect to surface additional insight into how to achieve further incremental savings through benchmarking. Now, that will be tied into what is known as the continuous improvement cycle of benchmarking. It shows why benchmarking is not something that is done at one point in time, and then it is finished.

In Figure 3 below, the group readily went through the right side of the benchmarking cycle:

1. What to survey.
2. Methodology selection.
3. Data gathering.
4. Report output (and then, after modifying parameters, regeneration of reports).

Figure 3. The continuous improvement cycle of benchmarking. Benchmarking is not a concept that is done one time and then filed away; the only way to improve continuously is to constantly reassess one's facility metrics.

After completing the Report Output phase, at best, the group has identified where it stands in terms of cost metrics, in comparison to other similar buildings in the database. But it will have no idea of why it is doing better than some buildings, and why it is doing worse than others. To do that, one needs to compare the best practices that the building is following to those who are being followed by others doing better than it. So now one is ready to proceed:

5. Focus on best practices.
6. Implement ideas (the appropriate best practices of those outperforming one's building).
7. Track the results (to develop new metrics)
8. Repeat the whole process (to attain incremental savings each year).

So a key value of benchmarking is to be able to see the impact of implementing best practices in other, similar facilities, to see if your facility may benefit from that.

An example using preventive maintenance is presented in the next section, to show how benchmarking can result in cost savings.

One area of focus of the above benchmarking group is the proportion of preventive maintenance to the total amount of maintenance (preventive + corrective). Most facility managers likely expect the cost of planned work to be lower than unplanned work, but what is the optimum percentage of planned work for a maintenance organization, and what is the cost impact of modifying that percentage?

The preventive maintenance ration is a key metric within FM BENCHMARKING. As the chart below shows the amount of PM work was relatively low when it was first measured. In the first year the group had a median PM percentage of 38 percent (see Figure 4).

Figure 4. Each year, the benchmarking process will increase the proportion of scheduled maintenance when compared to total preventive plus scheduled maintenance.

However some group members were reporting substantial maintenance costs savings by increasing their PM percent; they then measured their cost savings from this activity. Over a five year period, the median PM percent for the group rose to above 60 percent. The increase in PM percent correlates rather well with the median maintenance cost savings accrued by the group.

As Figure 5 shows, the median maintenance costs for those organizations performing between 65 and 85 percent PM is about $0.75 per GSF lower than those performing on 5 percent PM and $0.50 per GSF lower than those performing just 20 percent PM.

Figure 5. Maintenance costs go down as the preventive maintenance percentage goes up, until it reaches the "sweet spot" of 65% - 85%. After that, any increased maintenance may be spending money on items that don't need maintenance, while none of the remaining corrective maintenance will be avoided.

The basis for the savings from increased preventive maintenance should be obvious, as PM work has many cost and schedule advantages:

• Material can be pre-planned
• Resources can be scheduled (cranes, lifts, outages, etc.)
• Fewer unplanned breakdowns
• Increased wrench time (less travel time)

A frequently heard comment by benchmarking participants is:

"I've seen it work at the company in the next better quartile on costs. I know I can bring that concept or program into my organization and it will work for me."

Knowing that something works in another organization is often half the battle in implementing change in facilities organizations. Benchmarking participants know what to change to reduce costs without impacting the service levels in their organization.

The rationale behind savings experienced from other metrics is similar, whether they be utility consumption, other maintenance metrics, or custodial and security metrics.

Benefits of Benchmarking

The leading benefits of benchmarking are presented. See which are most applicable to your organization.

Examples of Savings from Those Who Have Benchmarked

See examples of savings from ten companies who have been benchmarking. Examples are in the areas of space utilization, utilities, maintenance, custodial and security. We also show the average percentage savings over one, two and three years from those who have benchmarked in those areas.

Benchmarking Savings Calculator

Plug in the gross square feet or meters for your building and see what the savings would be from the median company doing benchmarking over any period from one-to-five years.