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How Legacy Technology Nickle & Dimes Your Facilities Budget

1/8/2020
Outdated or legacy systems constitute a significant problem among today’s facilities management teams. Facilities Managers need to understand how legacy technology can negatively impact the facilities budget and why updated systems make all the difference.

Facilities Budget Article

The best-laid plans for improved operations will always fail when an organization relies on obsolete processes and legacy technologies. In today’s world, the smallest of improvements have a massive impact on profitability across a distributed portfolio. Customers today can access anything they want or desire via the internet. It’s the ‘Amazon Effect’ all over again, and many terms exist to describe it—such as the death of brick-and-mortar stores or the retail e-pocalypse. Regardless of how your organization views the ever-changing world, you need to cut costs wherever possible and make your organization stand out with the best facilities possible.

The Costs and Negative Impact of Using Legacy Technology in Your Organization

The costs and negative impact of using legacy technology can be challenging to isolate. Costs may arise from increased length of the maintenance backlog, the time between problem identification and resolution, damage, and consequences to customer experiences and more. In addition, legacy systems were designed for a single company, disregarding the capability and limited potential of integrating with external data. While these companies could benchmark their current performance internally, it was difficult to measure performance against their competitors, which does not speak to the value of a specific industry, such as retail, but it does detail how the facilities budget may benefit from a system upgrade. Implementing a proactive maintenance strategy, when using a more traditional facilities system not connected to the “cloud” or integrated with other smart building systems see costs soar beyond 400%. Yet, an organization using legacy systems does not necessarily have 400% higher costs of operating expenses. The reality is organizations operating legacy systems have many missed opportunities to connect with consumers, CRE building managers, and their tenants, as well as understand employee concerns. Ultimately, it helps an organization learn how employees interact with facilities and deploy new services or products based on data.

Upgrading Systems Enable Better Capital Planning

Upgraded systems will boost your profitability by giving facilities managers something they desperately need, access to meaningful, actionable data. For example, what is the most essential aspect of any facilities budget? The value placed on time and resource management. Imagine the possibilities of better labor-management resulting from the ability to track a technician’s exact time spent making a repair, verifying the fix was made correctly, validating its impact on current costs and applying savings to continuous improvement in the facility. It creates a win-win situation for both field service providers that can accomplish more tasks and your organization that delivers better experiences for building occupants.

How to Evaluate the Cost Versus Benefit of Upgraded Systems

Building the business case for upgraded systems and better facilities budget processes is a hard-sell. Maintaining the status quo is simpler, but it becomes much more complicated when considering the additional effect of outdated systems. Data collected could be older than anticipated, not just preventing Facilities Managers for making beneficial improvements but contributing to higher costs through misinformed decisions. In other words, legacy systems could result in decisions that would further push the facilities budget out of alignment than what facilities managers realize. Instead of succumbing to this risk, managers should follow these steps to evaluate the current condition of their legacy systems and connect them, where possible, to advanced platforms and technologies that enable proactive, effective facilities management.

  1. Identify current legacy system-maintenance costs.
  2. Recognize the limited capabilities of current technology.
  3. Determine your cost of inaction for not embracing proactive maintenance processes.
  4. Consider the cost avoidance savings of implementing new technology.

Upgrade Your Legacy Systems to Avoid Unnecessary Costs Now

Legacy systems have inherent limitations and add to expenses based on diminished insight. More importantly, the investment of implementing modern facilities management technology makes good business sense, allowing more companies to increase their value-add from facilities management.

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