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Project Selection6 Ways to Make Smarter Investment Decisions
Budget pressures and other financial constraints facing higher education institutions continue to cause widespread challenges.
For facilities decision-makers, that means balancing
underfunded needs, aging facilities that weren't stewarded
effectively, pressure to build new and enticing space and
aggressive deferred maintenance growth. Institutions
nationwide are looking for ways to make smarter investment
decisions into their facilities and as a result, project selection
is more critical than ever. It’s imperative to be strategically
selective with your project planning process to ensure
funding is being allocated appropriately and effectively
supporting institutional priorities.
Conversely, sometimes the best investment decision during
times of financial uncertainty is choosing where not to
invest. Challenging times are ahead. Understanding that
capital need will always outpace available funding, this guide
is designed to offer practical strategies for optimizing the
funding you do have and ensuring you get the best return on
the assets you serve.
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1. Match Investment Capacity with Need
2006-2011 2012-2018
Distribution of All NeedsHistorical Investment
Space Renewal
59%Space Renewal
49%Mechanical
38%
Envelope
13% Space Renewal
25%
Mechanical
56%
Envelope
19%
Mechanical
27%
Envelope
14%
Examine your historic spending patterns and how they align with current and projected needs.
This analysis is a tool to measure and monitor your progress as you continually reassess your investment decisions to meet the needs of the institution.
An outright shift in investment strategy is not an overnight change and this approach doesn’t imply you need to match your distribution of needs exactly, it simply gives a framework to track performance against credible investment targets.
Investment Disconnect
© 2019 The Gordian Group, Inc. All Rights Reserved.
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0.000.00 0.10 0.20 0.30 0.40 0.50 0.60
5.00
10.00
15.00
20.00
25.00
Total Work Order Hours ( / GSF *1,000) vs. Building Condition Score
WO
Hou
rs/G
SF*1
,00
0
Building Condition Score
4
2. Link Operational Costs to Deferred Maintenance (DM)
Look at total work order hours spent on buildings against their overall condition to help link day-to-day operational costs to deferred maintenance.
The buildings in the shaded region are buildings of opportunity. These are buildings with greater deferred maintenance needs and a high volume of operational need or are simply building
clusters that may need to be examined independently from the rest of campus. Rather than investing time and money daily on work orders, consider replacing entire building systems for a better return in the long-term.
On the other end of the spectrum are buildings in better physical health, with lower amounts of daily operational need. These buildings are operating more efficiently and should be stewarded as needed to prevent decline into the shaded regions.
© 2019 The Gordian Group, Inc. All Rights Reserved.
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Weigh the costs of construction solutions against their potential drawbacks.
The constant pressure to add new space is often felt by higher education institutions either to relieve the sentiment of campus being too cramped or to make a good impression among potential recruits. However, new
3. Space Tradeoff – Invest or Divest?
construction doesn’t positively impact current backlog, it can actually skew the number by actively adding future needs and making it more challenging to confront. Sometimes the best investment strategy is to not invest at all. And if you can remove poor quality space, you can free up resources to maintain the rest of campus.
© 2019 The Gordian Group, Inc. All Rights Reserved.
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Demolition
Major Renovation
Minor Renovation
New Construction
Dollar-for-Dollar Impact on
Backlog
L E S S
M O R E
» Changes campus character» Reduces available space on campus» Politically unpopular
Drawbacks:
» Di�cult to secure funding» Perception is that it’s still an “old” building
» Doesn’t necessarily address keyinfrastructure issues
» Less e�cient than a major renovation
» Actively adds to future needs» Doesn’t actually reduce current backlog» 2-3x less impactful dollar for dollar
than other options
Project Impact on Backlog
© 2019 The Gordian Group, Inc. All Rights Reserved.
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4. Pair Need with Program Value
ProgramValue
Building Condition
H I G H
LOW
LOW H I G H
Major Capital RenovationsPoor Building Condition,
High Program Value
StewardshipExcellent Building Condition,
High Program Value
Transitional BuildingsPoor Building Condition,
Low Program Value
Maintain/RepurposeExcellent Building Condition,
Low Program Value
Tie facilities projects and funding to institutional priorities.
In order for your investment decisions to be supported by your institution as a whole, consider their program value. But how do you define program value? Is it space utilization? Is it mission-driven? If you need to secure buy-in from stakeholders, this framework can provide the rationale required to help campus constituents understand why projects are being selected in the sequence they are. When utilized correctly and with patience, this strategy is one of the most effective ways to prioritize and select projects.
© 2019 The Gordian Group, Inc. All Rights Reserved.
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5. Breakdown Campus Needs into Segments
Group buildings as a portfolio of assets based on similar functions, campus priority or strategic direction.
The Building Portfolio process helps to define areas of emphasis and distribute funding across campus facilities with a rationale for sequencing investments. With guidance from campus leadership, this plan tends to reflect university goals and objectives. This approach to setting priorities for resource allocation does not suggest that one project is less important than another on an individual basis but rather that another project’s “turn” will come further down the road.
© 2019 The Gordian Group, Inc. All Rights Reserved.
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Total Campus Need$609M
Academic, Admin & Research Need$494M
Auxiliary Buildings$115M
DivestmentTransition
$53M$134/GSF
Historic$151M
$146/GSF
Academic$83M
$87/GSF
Stewardship$41M
$25/GSF
HistoricStewardship
$83M$97/GSF
MaintainRepurpose
$25M$34/GSF
Housing$110M
Parking$5M
Central Allocation$233M
$118/GSF
Program Funding and Capital Renewal$149M + $47M
$47/GSF
Building Portfolio Strategy
© 2019 The Gordian Group, Inc. All Rights Reserved.
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6. Don’t Forget About Your Customers
HighestImpact
Projects
CustomerViews(Survey)
Condition of Building
(AR Need)
Value to Program
OperationalBurden
(Work Orders)
Link all factors together to see where you will receive the highest impact and then verify your results with relevant customer feedback.
Survey on the condition of buildings, general experiences with different spaces and first impressions.
© 2019 The Gordian Group, Inc. All Rights Reserved.
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Don’t go it alone
These frameworks are examples of how institutions can
make better investment decisions that strategically allocate
insufficient funding to projects in alignment with critical
campus needs and institutional priorities.
But how do you ensure the message is heard? How do you
break through the noise and remove the bias of project
selection that inevitably infiltrates decision-making? The
short answer - data and objectivity. You need a foundation
of data that objectively examines longitudinal investment
patterns and performance to better understand where
your campus has been and where it needs to go. Armed
with this data, finding the right path to a solution with
stakeholders often requires patience and calculated,
informed conversations. Removing subjectivity through a
third-party perspective and focusing on broadly verified data
will help you reach the best outcome for the institution and
the community you serve.
© 2019 The Gordian Group, Inc. All Rights Reserved.
About GordianGordian is the world’s leading provider of facility and construction
cost data, software and services for all phases of the building
lifecycle. From planning to design, procurement, construction
and operations, Gordian delivers groundbreaking solutions to
contractors, architects, engineers, business and financial officers
and facility owners in local, state and federal governments,
education, healthcare and other industries. A pioneer of Job
Order Contracting (JOC), Gordian’s offerings also include our
proprietary RSMeans data and Sightlines Facility Intelligence
solutions. We develop and maintain the largest collection of
labor, material and equipment data and associated costs for all
areas of construction. Gordian’s solutions are accessed through
our innovative software platforms and supported by a team of
industry experts proven to help clients maximize efficiency,
optimize cost savings and increase building quality.
Changing the Conversation in Facilities ManagementDiscover more at gordian.com