5 Secrets to Benchmarking Excellence

Five Secrets to Benchmarking Excellence

Sightlines: Matthew Bausher, Director of Member Operations Janice Nolan, Director of Knowledge Management

and Professional Development

Descriptive text goes here

Session Overview

• 5 Secrets to Benchmarking

• Making the Case using Effective Benchmarking

• Questions and Discussion

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Sightlines ProfileCommon vocabulary, consistent methodology, credibility through benchmarking

• 10 year old company based in Guilford, CT• Common vocabulary, consistent methodology, credibility through benchmarking

• 95% Annual retention rate• Tracking $5.9 billion in operations budgets and $4.2 billion in capital projects

• Database of 23,500 buildings and 825 million GSF 3

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The 5 Secrets to Benchmarking

Consistency

Accuracy

NormalizationPeer Group

Context

Effective Benchmarking

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Consistency

Accuracy


Context



Creating Consistency

How to collect the right data:1. Start with the end in mind2. Create a finite list of priority data pieces3. Collect the same data at every institution• Understand institutional language – how does it fit into your analysis?• Exclude portions of data that are not critical to your analysis

Facilities Operating Budget - Exclusion Examples

Security/Public Safety

Mailroom

Fleet Vehicles/Transportation

Insurance, Tax, Rent

Academic Equipment

Daily Service Staffing – Exclusion Examples

Maintenance – excluded work (Projects/sold-service/moves, etc.)

Custodial – Non-cleaning duties (set-ups moves/special projects/etc.)

Grounds - Non-landscaping duties (driver/mechanic/recycling/etc.)

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Accuracy

Consistency


Context



Verify the information is correct and accurateValidating any changes in the numbers

%

8

80

85

90

95

100

105

110

115

FY07 FY08 FY09 FY10

Change in Energy Consumption

Fossil Consumption Electric Consumption

Step 1: Review the information

longitudinally look for spikes or valleys

in the data

Step 2: Compare to other data

pieces to crosscheck data Look for inconsistencies

in the two data pieces

$0

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

2007 2008 2009 2010

Energy Logs Operating Expenditures

Dol

lars

Comparing Energy Logs to Operating Expenditures

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Normalization

Consistency

Accuracy

Peer Group

Context



A B C D E F Sample H I

Gross GHG Emissions 40660 35580 55733 79454 29849 73983 80917 33085 39382

5,000

15,000

25,000

35,000

45,000

55,000

65,000

75,000

85,000

Annual Gross Emissions

MTC

DE

What happens when data isn’t normalized?

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A B C D E F Sample H I

Gross GHG Emissions 23 12 8.6 8 4.1 6.4 8.5 4.2 2.2

1.3

3.8

6.3

8.8

11.3

13.8

16.3

18.8

21.3

23.8

Annual Emissions per Student

MTC

DE/S

tud

en

tWhat happens when data isn’t normalized?

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Finding a way to normalize the information

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E

What factor affects the metric most:1. Size? (Square footage, acreage, etc.)2. Number of people? (Full-time equivalents, headcounts, etc.)3. Other (Dependent upon metric)

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Consistency

Accuracy

Normalization

Peer Group

ContextEffective

Benchmarking


Choosing the “right” comparison groupWho are we and who do we want to be?

Who are you?

•Physical characteristics•Location•Region•Financial capacity•Current program•Enrollment competitors

Who do you want to be?

•Institutional mission•Master plan•Programmatic changes•Future enrollment

14“Not all comparison groups are created equal”


Or change based upon metricsChoosing the “right” comparison groupUse just one group

“Not all comparison groups are created equal” 15

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Consistency

Accuracy

Normalization

Peer Group

ContextEffective

Benchmarking


Or providing superior service in support of institutional mission?

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Putting the data into contextUsing families of benchmarks

Cleanliness Inspection Score*

Sample Institution 4.8

Peers (Avg.) 4.1

Database (Avg.) 4.2

Too many people?

I I

I*Inspection scores on a 5.0 scale


B

B

Putting the data into contextUsing families of benchmarks

Oldest campus

Highest backlog

•Decreased effectiveness of maintenance staff

•Declining campus appearance

Neglecting campus needs?Or dealing with older facilities?

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Context makes the caseUsing benchmarking to provide…

VALUE

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Charting growth in project spendingSystem F moved from below peer average to above peer average

System A

System B

System C

System D

System E

System F

$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

$7.00

$8.00

$9.00

$10.00

Total Project Spending FY2007

System A

System B

System C

System D

System E

System F

$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

$7.00

$8.00

$9.00

$10.00Total Project Spending FY2009

Peer Average

$/G

SF

$/G

SF

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Context makes the caseUsing benchmarking to provide

VALIDATION

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Validating concernsLower operational funding than peers

20032004

20052006

20072008

20092010

$-

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

$7.00

$/ G

SF

20032004

20052006

20072008

20092010

$-

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

$7.00

Facilities Operating Budget / GSF

Peer Averages Sample Institution


Validating concernsLower funding means less resources and limited effectiveness

Cleanliness Score*


Peers (avg.) 4.3

General Repair/Impression Score*


Peers (avg.) 3.9

Sample Institution Sample Institution

23*Inspection scores on a 5.0 scale


Context makes the caseUsing benchmarking to provide

WHAT-IF? MODELING

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Providing context for funding decisionsUnderstanding what it takes to be competitive

$1.41/GSF on average, annually$1.65M on average, annually

$9.88M over 6 years

Sample Institution


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Aiding organizational decisionsModeling proposed changes versus current peer performance

Decrease of 1.5 Supervisor FTE’s

Decrease of 2 Trades FTE’s

Increase of 2.5 Custodial FTE’s No change in

supervisors (with addition of 2.5 custodians)

Mai

nten

ance

D

epar

tmen

tCu

stod

ial

Dep

artm

ent

HH

II


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The 5 Secrets to Benchmarking……lead to effective benchmarking and often yield positive results!

Consistency

Accuracy


Context



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Institution AMaking the case for increased Stewardship

IMPACT: Realizing the negative impact of sustained capital decline, the Board of Trustees approved additional Stewardship investments of $1.5M annually through FY2014

Case Study: Increasing Annual StewardshipFiscal Years: 2010+

Projected annual investment of $1.5M through FY14, plus $460,000

in “fast payback” funds in FY10

Institution A


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Institution B

Case Study: Custodial OperationsFiscal Years: 2009-2010

IMPACT: Benchmarking aided in validating concerns about the rising costs of the institution’s custodial operations, despite the lack of campus growth or staffing. Subsequent re-bidding of the custodial contract reduced costs by almost $1M.

Member Quote: “...we rebid the custodial [contract], and saved $1M based on your suggestion.”

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

2005 2009

$/G

SF

Daily Service Operating Costs by Department

2010

2009


Questions & Discussion

Contact Us:

Matthew Bausher Phone: 610.844.9633 Email: [email protected]

Janice NolanPhone: 203.682.4968Email: [email protected]

5 Secrets to Benchmarking Excellence

Business

Transcript of 5 Secrets to Benchmarking Excellence