Facilities Management Performance Measurement Duane G. Hickling www.hicklingassociates.com dhickling@hicklingassociates.com APPA 1643 Prince Street Alexandria, VA 22314-2818 U.S.A

Agenda Key Metric Questions Institutional Activities Measured Evolution of Facilities Performance Measurement Case Study The Future of Higher Education – One Perspective Group Discussion Session – - Future Institutional Metric Alignment Group – Report Out

2 Key Questions Are your facilities metrics aligned with your institution? What are the key performance measures necessary to support the success of your institution? Are the institutional metrics aligned with the future directions of higher education? Will the future be anything like the past?

Institutional Activity Management Financial Endowment Academic Mission Real Estate Portfolio Management

Performance Measurement Evolution First Generation: Question: Are we spending enough on our facilities portfolio? Measures Considered: Cost comparisons against averages and benchmarks

Performance Measurement Evolution Second Generation: Question: Are we getting full value from the resources committed to sustaining our facilities portfolio? Measures Considered: Comparisons against identified best practices; Lean management process analysis

Performance Measurement Evolution Third Generation: Question: Is our institutional portfolio appropriate for the delivery of the mission? Measures Considered: Intensity of space usage; technology analysis

Key Performance Metrics (Annual) Institution 1 All APPA Res. Very High Annual Facilities Operating Expenses + Paid Utilities: ($/Gross Square Foot) $4.98 $6.91 $7.46 Facilities Operations Expenses Percent Current Replacement Value (CRV) .33% 1.61% 1.29% Facilities Operations Expenses Percent Gross Institutional Expenses (GIE) 1.91% 6.00% 4.03% Capital Expenditures on Existing Space Percent Current Replacement Value (CRV) .37% 2.71% 2.17% Utilities Cost per $/Gross Square Foot $2.66 $2.02 $2.97 Million BTUs $12.46 $17.86 $17.25 Utilities BTUs per Gross Square Foot 213,473 121,361 179,832 Data Source: 2011-12 APPA FPI Database Institution 1 qualitative performance for custodial, building maintenance and grounds is a level 4.

The Future of Higher Education “By 2030 over 50% of colleges will collapse” “… eight core wedge issues between business-as-usual and the unstoppable forces of change.” Thomas Frey, When Our Institutions Fail

Overhead costs are too high Substandard classes and teachers Eight Core Issues Eight core wedge issues between business-as-usual and the unstoppable forces of change Overhead costs are too high Substandard classes and teachers Increasingly visible rating system Inconvenience of time and place

Credentialing system competition Eight Core Issues Eight core wedge issues between business-as-usual and the unstoppable forces of change Pricing competition Credentialing system competition Relationships formed in colleges replaced by other systems and avenues Loss of trust; realize other avenues can provide knowledge and competency

Group Session Question What are the top 3-5 metrics our institutions should be monitoring over the next few years to monitor the possibility that Thomas Frey’s predictions might be correct?

Group Session Question – Report Out - I Suggested institutional metrics to monitor reported from breakout groups. Energy and sustainability Space use efficiency ROI of space Percent of virtual courses per student Overhead costs on both instruction and research Cost per degree (facilities) Opportunity cost of unused space

Group Session Question – Report Out - II Suggested institutional metrics to monitor reported from breakout groups. Exit interview of individuals leaving campus (faculty, staff and students) Student post graduation employment rate Student 4 and 6 year graduation rate Brand value of institution (attractiveness) Potential of federal government intervention into higher education cost control Space relevance (space vs. technology) International competition Number of online courses competed