1. FM Intersections FM and Finance Phyllis Meng, CFM, SFP, IFMA Fellow

2. Meet our Presenter
Phyllis J. Meng, CFM, SFP, IFMA Fellow, Meng Associates over 30 years in FM
Deputy Executive Officer, General Services, LA Metro, 28 yrs., Building manager for LA Metro 628,000 sq. ft., 28 story headquarters
Certified Facility Manger (CFM)
2002 – IFMA Fellow
Sustainable Facility Professional (SFP)
LA Chapter & Public Sector Council President
IFMA Foundation Chair & Board
IFMA & BOMI Instructor
UCI & UCSD Instructor
Chaffey College, FM Associates degree instructor

3. Session Learning Objectives
Understand what is important to CEO
Learn to convert FM info into quantifiable information
Conveying information in a way that the CEO can easily connect

4. Current Practices How does CEO perceive FM? Cost center
Do more with less
Stretch every dollar
Out of Sight Out of Mind
Think of facilities when something goes wrong

5. Important to CEO Company organized to create profit for owners
Communicates everything in terms of money
Greater market share
Higher profit
Higher stock price
More dividends for shareholders
CEO keeps his job

6. Cost Center to Value Center
Quantify how contributions benefit organization
Contribute to company’s profit
Contribute to other department’s profit
Health, safe, comfortable environment
Creating new metrics to measure how FM support bottom line

7. Communicating with CEO
Thinks about is profit and numbers
Translate technical data to financial data
Create metrics CEO understands
Facility Condition Assessment
FM Ratios
Benchmarking

8. Facility Condition Assessment
Analysis of condition of facility
Quantify cost maintenance, repair, replacements
Third party expert
Facility Condition Index
Benchmark to compare condition of a facility
Support asset management initiative
FCI = Maintenance, repair & replacement deficiencies/Current replacement value

9. Facility Ratios
Be able to convert facilities information into meaningful numbers
Know how to benchmark your information with yourself or others
Sell your projects to senior staff

10. Developing FM Ratios Total square feet in building Number of Occupants
Number and cost for maintenance/custodial services
Utility costs
Number of moves
Items recycled

11. FM Ratios Maintenance cost per square foot/occupant
Custodial cost per square foot/occupant
Diversion rate
Tons of paper recycled per occupant
Churn rate
Total occupancy cost per sq.ft./occupant
Utility cost per sq. ft./occupant
Landscaping cost per square acre/occupant

12. Benchmarking Establish base line Compare with yourself
Utility costs
Maintenance/custodial costs
Compare with other organizations
Similar business
Compare with IFMA benchmarking report
Sell projects

13. Financial Analysis Translate technical data into financial data
Payback
Easiest to understand
ROI
NPV & IRR
Present financing options
Rebates
Grants
Life Cycle Cost Analysis (LCCA)
Total cost of ownership (TCO)

14. Payback/ROI Payback Return on Investment How long to recoup funds
Years/months
Return on Investment
Evaluate efficiency of investment
Return on investment/cost of investment
Expressed as a percentage

15. Time Value of Money
A dollar in hand to day is worth more than a dollar next year because of its potential earning capacity
Present Value/Future Value
Net Present Value
Internal Rate of Return

16. Life Cycle Cost Analysis
Life-cycle cost analysis (LCCA) tool determine most cost-effective option to purchase, own, operate, maintain and, finally, dispose of an object or process
Cradle to grave
Costs included
Price
Cost to make ready (install)
Operate
Maintain
Disposition

17. Sustainability Natural environment Local community
Business environment
Corporate Triple Bottom Line
Environmental – effect on planet
Economic – profit
Social - people

18. Sustainability Initiatives
Where is company on environmental/sustainable initiatives?
Show how can increase profit
Save money – cost avoidance
Show how can improve environment
How can contribute to being a good neighbor

19. Champion for Sustainability
Example for other organizations
LEED certification
Measurable success
Recycling
Trash
Food
Energy initiatives
Water initiatives
Green cleaning

20. WIIF What’s in it for me Be prepared
Self directed judicious on strategy
Bring solutions with problems
Think like a CEO (Land baron)

21. Senior Management Sell projects Present argument on how efficient
Benchmarking
Always looking to save money
Present argument on cost avoidance
Show how support corporate mission

22. Starting Point Quantify current Baseline Benchmark
Water – where used & how much
Energy – Domestic, equipment, & landscape
Baseline
Benchmark
Life Cycle Cost Analysis

23. Itemized list Short description Implementation cost
Estimated savings (cost avoidance)
How implement
Think small

24. Lighting to LEO - TCO Payback of two years or less Energy savings
Rebate from service provider
Energy savings
Lighting provided – less wattage (50% savings)
Less heat from fluorescent tubes
Less heat from ballasts
Less cooling required
Less lighting required
10+ year life
Labor & materials for relamping saved
Less hazardous waste

25. Presentation to CEO Short WIIFM Consequences of not doing project
Power point 3 or less slides
WIIFM
Additional revenues
Consequences of not doing project

26. FM Responsibility Know facilities costs Use numbers
Ratios
Benchmarking
FCI
Speak in terms of money & numbers

27. What would you say to CEO?
30 second elevator ride
How supporting strategic initiatives
Implementation of sustainable issues
Update on capital project

28. Learning Objectives Understand what is important to CEO
Learn to convert FM info into quantifiable information
Learn how to convey information in a way that the CEO can easily connect

29. Phyllis Meng – pm.mengassoc@gmail.com