Organizational effort: How and where do hidden costs arise in the maintenance of buildings?

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Anyone who works in a facility service company knows:

 Those activities that are carried out directly for customers are only the tip of the iceberg.  

We want to illustrate this right at the beginning: A cleaning worker is completely busy with work, the margins are low – in other words, a lot of work has to be done in a short time. For this purpose, the specialist should also document what they have done: photos before and after, read counters, report irregularities such as junk or damage. All this information has to be sent via messenger service under time pressure. So it is no wonder that there is hardly any documentation or that office management takes a long time to summarize it coherently.

In addition, the workflow of the cleaning staff is often not optimized . This means that due to the long journeys, the logistics and the tool transport, the optimal amount of – for example staircases – cannot be cleaned. This fact can not only be observed in cleaning companies – it runs through all facility service and maintenance companies.

This results in the following question for us:

How and where do hidden organizational costs arise in the maintenance of buildings or facility service companies?

In order to arrive at a meaningful answer, we have chosen the following procedure: As a company that offers a digital solution for maintenance management, we deal with various customers from the industry on a daily basis. As a first step, around ten interviews with the decision-makers of these companies brought us closer to answering our question. Next we turned to three experts – Dipl.-Ing. Mag. Dr. Alexander Redlein, Dipl.-Ing. Dr. Helmut Flögl and Mag. Mike Jäger, M.A. – agile who deal both practically and scientifically with topics related to facility management. Interestingly – probably due to the complexity and the breadth of the topic – there has not yet been a study that addresses our exact question. All the more exciting are the results that we were able to achieve through the expert and decision-maker interviews, as well as the analysis of existing studies on related topics.

At the end of the article you will likely see a new question: "Why haven't I dealt with this before?"

Administrative activities in facility service and maintenance companies: The status quo

Although the real estate market has seen some technological advances in recent years – including IoT sensors, more efficient energy use and blockchain solutions for the sale of apartments – the facility service and maintenance sector is relatively silent. Not much has changed in this area in the last 15 years. One exception: the emergence of the messenger service WhatsApp as a communication tool in 2013.

After the interviews with customers, a administrative work process emerged, which occurs in this or a similar form in technical building management. It looks like this:

  1. The customer calls and reports a concern.
  2. The reception picks up, makes a note the concern outlined.
  3. The front desk checks which service employee is currently available and notifies them.
  4. The employee receives the order and drives to the customer.
  5. At best, the order will be completed immediately. Employees must keep records of the situation before and after, the work done and the time spent. (If there are complaints or follow-up orders, the process shown is extended.)
  6. The customer signs the director’s license, if it is an individual order.
  7. The employee drives back to the company, hands in the director’s license and / or the documentation about the service carried out there.
  8. The director’s license including the invoice is sent to the customer (by post or e-mail).
  9. The director’s license is filed.
  10. In the case of warranty cases or complaints, the director’s license and documentation (e.g. photos) will be sought.

In most cases, a messenger service such as WhatsApp is used for coordination of orders and employees . The individually created documents are stored non-automated in a folder structure. Sometimes reports and photos are only saved on the mail server or remain in WhatsApp. What is also part of the everyday work of building maintenance assistants: classifying employees by calendar in Outlook and planning, recording and continuing the activities in an Excel list.

The following grievances also revealed:

  • Sometimes there is no or hardly any professional reporting after the completion of an order. “Sometimes I have to manually enter up to 160 photos from WhatsApp into a Word document for each order“, reports a Wowflow customer.
  • A complete documentation is rarely given, as this represents a high administrative effort. There are lacking valid documents or evidence when a complaint is made.
  • The search for information such as reports and photos takes (too) much time. Sometimes it is even several hours – especially when there are complaints or warranty processing.
  • In certain cases the management of a key alone takes up to 20 minutes . (Click here for the Wowflow blog post that covers this topic in more detail.)

What, according to Redlein, is one of the biggest administrative time wasters is the master data system. He explains the topic using an elevator as an example. When it comes to preventive maintenance, a few points must be clarified in advance. These include, for example:

  • Which elevator laws apply in the region in question?
  • What does the elevator manufacturer recommend?
  • What type is it?
  • What are the requirements for this particular elevator? (In hospitals, for example, more specific requirements apply than in an office building.)

All of this – and more – master data must be created for every conceivable system in the building to be supervised.

Die oben aufgezeigten Prozesse und Probleme sind in der Branche allgemein bekannt, werden jedoch gerne übersehen. Warum? 

Sie haben sich während der letzten zehn bis 15 Jahre in die Unternehmensstruktur eingebrannt. Führungskräfte und Mitarbeiter*innen werden durch den erhöhten Informationsfluss “betriebsblind” – sie sehen das Problem gar nicht. Umso wichtiger ist es, die Problemstellung vor Augen geführt zu bekommen.

Maintenance of buildings: Administrative effort of up to 100 hours per week

The fact is: The process shown above in bullet points takes 15 to 60 minutes – that depends on whether it is a reactive or a preventive maintenance and how much documentation is required. The actual work of the service team is excluded. It is purely about the communication , the coordination and the proper documentation .

The specific administrative effort naturally depends on the size of the company – for SMEs in the field of technical building management, we can speak of up to 100 hours per week . These 100 hours are made up as follows: 27 service or building services employees spend a total of 67.5 hours on admin work per week. The staff in administration around ten – depending on the intensity of the documentation and the work carried out by the technical team. With two project managers it is about twelve administrative working hours per week – also depending on factors such as the coordination and communication effort. (Note: All of these and other figures quoted in this article are based on our customer surveys.)

What is this effort made up of?

Susanne Hauk lists in her dissertation “Economic efficiency of facility management” the FM cost driver data acquisition and processing with 44 percent. This means that almost half of the facility managers in Austrian companies surveyed said that they see the processing and recording of data as the cause of costs. A statement that was only confirmed by our surveys and the master data problem mentioned by Redlein.

It has also been shown that another large part of administrative activities consists of communication. This means communication with:

  • Employees of the company
  • External service providers, suppliers, partners,
  • Customers, owners and tenants

Information is usually exchanged via phone calls, e-mails or messenger services. The latter is often used, especially in internal communication. All of these ways of exchanging ideas are time wasters, but are rarely seen as such. Because communication is – very clearly – essential and unavoidable.

One component that also leads to hidden costs in a broader sense are travel times. Here is another example: A service employee has an assignment at the other end of town. Experience has shown that the process usually looks like this:

  • Obtaining information from the reception staff (by phone, in writing or in person)
  • Collecting the keys from the office
  • Carrying out the order – if there are missing materials or tools, you have to go back and forth again
  • Bring the keys back to the office
  • Hand in the director’s license to the secretariat

Depending on where the order is located, this process takes several hours . As already mentioned, in some cases up to 30 minutes have to be spent on key management alone – which in turn has to be passed on to the client as a flat rate.

How much does the administrative effort cost a facility service or maintenance company?

If we convert the processes outlined above into costs, there will be nasty surprises. This is illustrated in the table below. The average hourly wage (gross) of a back office employee is 20 euros. Multiplied by ten hours a week for administrative activities (for SMEs), that’s 200 euros that are spent weekly. According to our calculations, two project managers cost 360 euros a week. With 27 employed in-house technicians at an hourly rate of 22 euros, this is 1,485 euros per week. Mind you:

This total of 106,340 euros per year is not chargeable.

Mr. Jäger from MACH Energiegesellschaft can also confirm this: “The customer rarely honors administrative times. The common tenders for facility management but also for facility services reflect this. The excessive reporting requirements, some of which are not read at all, are immense. These indeed demand facility management and brain power, which do not conform to the customer image of FM as a caretaker service. ”

In addition: The more administrative work, the more manpower is required (1.5 administrative staff per 12-15 employees in the technical area, according to Jäger). The expenses for the corresponding personnel are increasing – a vicious circle.

Facility service and maintenance companies have been working as shown in this article for the past ten to 15 years. So why should that be changed?

The answer is simple: Times have changed.

First, it is more and more difficult to find well-trained facility management staff (source). And secondly, we’re talking about a low margin business – every penny counts.

In this environment it makes no sense to spend up to 100 hours a week on administrative activities that cannot be passed on to the customer.

What facility service and maintenance companies could achieve with the time saved and the cost savings

The study carried out by Redlein “savings potential in facility management” shows that a productivity increase of 26 percent is possible in the area of ​​maintenance of buildings through the use of synergies between the services (16%), the process optimization (13%) and the organizational optimization (11%). As an example of synergies, Redlein mentions in the conversation that the security staff not only walk through the corridors during the night shift, but can also check the emergency lighting. The person then has to be trained a little better, but there are no costs and no time for performing the controls separately.

Without going into the individual possibilities in this article, we would like to briefly outline what you can do with the saved resources:

  1. Extended sales opportunities
  2. Improved service quality for existing customers
  3. Acquisition of new customers
  4. Increased employee satisfaction
  5. Time for further training

How are you and your company doing on this topic? Are you struggling with the same or similar challenges? Or have you already found a satisfactory solution for your company, your employees and your customers?

If you would like to exchange ideas with us on this topic or if you feel that we can help you with the problems shown, please contact us.

We constantly deal with similar topics and consult experts from the industry. You can find our other blog articles here: