Implementing the right Key Performance Indicators (KPI’s) starts

with thoughtful Key Performance Questions (KPQ’s)

Facility Management

Metrics
That Matter

OVERVIEW
IN A WORLD OF INCREASING DATA, IT IS BECOMING MORE
IMPORTANT TO EXTRACT THAT INFORMATION OF VALUE TO US
WHEN AND WHERE WE NEED IT. UNDERSTANDING THE TYPES
OF METRICS, FORMULATING USEFUL KPI’S, AND MAKING THESE
READILY AVAILABLE TO US AND OUR COLLEAGUES CAN LET US
DEVELOP FACILITY MANAGEMENT METRICS THAT MATTER.
Facility Management Metrics That Matter
Introduction 2
Information Overload? 3
Types of Metrics 4
Measurements 4
Indicators 4
Key Indicators / Key Performance Indicators 4
Lagging (Past Results) 5
Leading (Future Performance Prediction) 5
KPI “Matrix” 5
Useful Metrics Are Situational 6
Establish KPI’s using KPQ’s 7
Base KPQ’s on The Organizational Scorecard 8
Design KPI’s To Answer The KPQs 9
FM Metrics Need Non-FM Data 10
Presentation of KPI’s 11
Scorecards 11
Dashboards 11
Reports 11
Trending 12
Graphic Displays Help Communication 12
Group or Nest Large Quantity of KPIs 12
Conclusion 13
About the Authors 14

White Paper | FM Metrics that Matter 1

 Introduction
Facilities Managers (like everyone else) are being deluged with
data, and in turn are being asked to generate data for others.

The problem is, data on its own does not tell a story that can
lead to action. Data can be sorted and totalled to show what
you did in the past but does not tell you where you are going.

It is when data is used in combination with objectives that it

enables smarter, more efficient facility management.

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Information Overload?
Data, data everywhere – we are being bombarded with it and
there is more to come. All of our business systems, sensors in
the environment, the internet of things, even the apps on our
smartphones are vying for our attention. Sometimes it can feel
like keeping up with all this information is just one more thing
we have to do rather than something that helps us work
smarter.

Common data sources for facilities managers include all of the

following and more:

Enterprise finance Building Automation

systems systems
Enterprise HR systems Energy Management
systems
Facility work
order/CMMS systems Email
CAFM/CADD/BIM Text messages
systems Cloud systems
Construction plans & Online data services
specs
Industry publications
Project management
reports Benchmarking reports
Equipment sensors Commissioning reports
Occupancy sensors Social media
Security systems Photographs
Cameras Technical/design reports
Meter readings Regulations & standards
Spreadsheets Industry cost guides
Building Audits
Equipment Alarms

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 Types of Metrics
For simplicity, all the types of data and information will be called
metrics in this whitepaper. The exact terminology used is not
important, but it is essential that we understand the difference
between data, information, and knowledge.

Measurements
Emergency work orders wrench time
Measurements are just data, consisting of a value for defined
last month unit of measure and time/date stamp. Examples include things
such as cost, size, temperature, status, and a range of yes/no
conditions.
Total wrench time worked last month
Indicators
Indicators Require: Indicators are a sum of measurements about a single topic. For
1. A unit of measure ($, hrs, sum) example, number of work orders completed for a designated
2. A dimension of time period. On their own they do not provide any insight other than
magnitude which is the lowest level of information.

Key Indicators Require

Key Indicators / Key Performance Indicators
1. Indicators or other KPI’s Key Indicators use a math calculation (typically the divide key)

2. A math calculation between multiple Indicators to bring perspective to the results

3. The desired target/range and provide meaningful information. For example;

Indicators Key Indicator

open work orders
= % of work orders completed
total work orders

Key Performance Indicators (KPI’s) usually add a target or goal

to define the desired or acceptable values for an Indicator that
is believed to be important.

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Lagging (Past Results)
Lagging indicators are those that report past results. These can
be considered “factual” representation of past performance Results Indicator
because they are based on actual measurements. An example Tells you what you have done
is the number of scheduled work orders completed on time by
Performance Indicator
who performed the work.
Tells you what to do
Lagging indicators are best used to review recent performance
and historical trends. Lagging indicators are certainly valid
Key Results Indicator
information, and many times contribute towards knowledge and
Provides perspective on how you
leading indicators. have performed

Leading (Future Performance Prediction) Key Performance Indicator

Leading indicators are those that are believed to show Tells you what to do to increase
information that suggests likely future performance. Implicit in performance

these indicators is some type of knowledge of cause and effect.

An example is a forecast for hot humid weather as a leading
indicator for increased air conditioning demand and higher
energy usage.

Leading indicators are best used by managers to guide action

towards desired outcomes. Because of the challenge in
measurable items with reliable forecasting capability, we often
use “real time” lagging indicators as proxies for valid leading
indicators. This at least allows much less elapsed time between
the measure and any corrective action.

KPI “Matrix”
We can create a matrix of Indicator/Key Indicator x
Lagging/Leading as a way to organize our various KPI’s to
provide a blend of metrics.

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 Useful Metrics Are Situational
Now let’s answer the question asked as the title of this paper:
Which Facility Management Metrics Really Matter?

The answer is: It depends. (Yes it was a trick question.)

The metrics that matter depend upon the situation: Who is

using the metric and why do they need it?

Typically the complexity of the metric will increase with the

distance from hands-on performance of facility work.

For a Building Engineer, measurements can be useful metrics:

 Which open work orders need to be done today?
 What is the current equipment temperature for unit 1?
 How long has pump A been running?

For the Regional Building Manager, more complex indicators

are needed to be useful:
 Parts inventory as a percentage of asset value
 Service request on-time completion percentage
 Work orders completed within 10% of allotted time

The Director of Facilities is probably looking for even more

complex indicators, including data sets outside of any Facilities
Management systems:
Corporate Level
 Staff satisfaction rate with building services
Strategic Level  Operating cost per occupied square foot
 Utilization rate for office space by department
Functional Level
And the CFO is only interested in very high level metrics of the
overall business, of which Facilities Management is just a
Quantity of Metrics
portion:
 Total Facility Cost as Earnings per Share.
 Return on Net Asset for Properties

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Establish KPI’s using KPQ’s
Many organizations have difficulty identifying KPI’s that will
assist them in measuring their facility management
performance. The purpose of a KPI is to provide information for
decision makers and other users about the performance of their
operations and actions needed to stay on course.

A common approach to designing KPI’s is to look at the data

available and then try to figure out how to use that data. There
are two problems with this approach: 1) When we start
collecting data without knowing what answers we are looking for
then we often end up wasting time collecting the wrong or
unnecessary data. 2) When we start from the data that we
have, we end up with KPIs on things that might be easy to
measure but which offer few insights about the really important
questions we need answered.

Another tendency is to copy the KPI’s used by peers. There is

some benefit to learning from others with similar needs as long
as we confirm that our KPIs help us make the best progress
towards our own organization goals, which may or may not be
the same as our peers.

Here is where Key Performance Questions (KPQ’s) come in

handy – ask the questions that need to be answered to KPI
KPQ
accomplish our strategic objectives. The best KPIs will be KPI
Strategic
KPI
the answers to these very questions. Understanding the Objective
KPQ KPI
question we are trying to answer also clarifies why we are using
KPI
a particular KPI so it is easier to see when it needs to be
changed.

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 Base KPQ’s on The Organizational Scorecard
KPI The starting point for choosing which performance indicators
KPQ
KPI are key to a particular organization should be those that senior
KPI
management use. We probably have some type of strategic
KPQ KPI
scorecard, so that is the place to start.
KPI
Structure key performance questions to initiate discussion and
the search for useful answers. As we can see from the list on
Questions that lead to KPI’s the side, the questions may not have a simple answer. The

Do our facilities provide a safe and resulting discussion on how to answer it could determine that
productive environment for several KPI’s will be required.
customers and employees?
The most powerful KPQ’s will be those focused on desired
How well do we react to spikes in
future outcomes. While we use historical data to build
service requests?
knowledge, a primary value of KPI’s is to provide decision
Is our facility cost as low as it can
makers with actionable information that helps us achieve
be without jeopardizing the
building condition? desired results.

Do we have qualified staff ready As noted earlier, the actionable information varies by situation
and willing to fill vacancies when (user role) so it is important to refine the KPQ’s as we cascade
needed?
down the organization to make them relevant to the user while
Do our buildings perform (energy) ensuring alignment with the larger organizational objectives.
as well as they should?
Management should also periodically review the chosen KPQ’s.
What sustainability investments
Needs and objectives change over time, making it important to
would provide the largest benefit
per cost? update the KPI’s accordingly.

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Design KPI’s To Answer The KPQs
Once we have good KPQ’s, Key Performance Indicators (KPI’s)
KPI
can be developed to measure progress towards the KPQ
KPI
organization’s goals. Developing key performance indicators Strategic
KPI
Objective
can be challenging because we need to understand which KPQ KPI
actions will contribute to success and how to measure them. KPI
This is why good leading indicators are particularly difficult to
define.

A good KPI is one that:

 Helps to answer one or more KPQ. KPI Design Considerations:

 Is based on relevant, available data. 1. Link to Strategy

 Provides actionable information for the intended user. 2. Definition

 Is available on the required frequency. 3. Calculation

4. Purpose
A good KPI design will include the factors in the list to the side.
5. Data Sources
In this way the organization’s strategic objective will generate
KPQ’s, and the answers to these KPQ’s will be provided by the 6. Future Targets

KPI’s.

Bernard Marr lists “75 KPIs Every Manager Needs to Know”

described in a book of the same name. Note that while he
specifically defines this for “manager,” not all of these are
appropriate for all levels of managers in an organization. Also,
this list is offered only to provide some examples; these are not
necessarily recommended as the KPIs that everyone should be
using.

Reference:
www.linkedin.com/pulse/20130905053105-64875646-the-75-kpis-every-manager-needs-to-know

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 FM Metrics Need Non-FM Data
An area of growing sophistication and value is in integrating
traditional facilities management metrics (energy usage, area,
occupancy) with other business operation metrics.

An easy to understand example of this for retail is “sales per

square foot.”

This is increasingly important for us in order to understand and

communicate the importance of facilities management and its
impact on organizational performance.

Ideally, information from IWMS, CRM, ERP and other systems

in our organization would all be brought together and be
available to us when we need, whether on our mobile device or
desktop. Business intelligence systems offer this capability but
may require significant effort to accomplish this goal.

In the meantime, we can realize most of the benefits pretty

efficiently with less automated integration – merged exports and
selective data entry, especially when dealing with unstructured
data. Example where data entry is efficient would be adding
utility meter readings or the number of workplace injuries
(where the volume of data entry does not justify an expensive IT
integration).

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Presentation of KPI’s
The usefulness of a KPI depends on the situation, so does the
method of its presentation.

Scorecards
Many organizations use Scorecards to track and report
progress on multiple concurrent performance measures against
a pre-set goal. Scorecards are typically higher level KPI’s that
align with the larger strategic objectives of the business,
updated annually or quarterly.

Facilities management may have their own scorecard, usually

with items that cascade down from a few designated items at
the overall organization level.

Dashboards
Dashboards are typically less focused on a strategic objective
and more tied to specific operational issues. Dashboards may
be real-time or at least updated daily, to provide the user with
actionable information in a format that is both intuitive and
insightful. Information on a dashboard could range from raw
data measures to KPI’s.

Reports
Reports are best used to present information that is less
dynamic in nature, including complicated data calculations and
longer term trends. Since reports typically summarize past
information, they are most useful for administrative review of
past performance and technical analysis to identify trends for
future planning.

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 Trending
A KPI displaying performance in isolation over a single period
may not provide us with enough information to take action. An
indication on whether performance is improving or not may be
more valuable for us in assessing the need for action. (The
example on the side displays a color coded arrow that
communicates the current trend.)

Graphic Displays Help Communication

There are “human factors” to consider in the presentation of our

Ineffective KPI Graphic KPI’s, typical of any system user interface.

Does not assist the user in While the top chart on the side provides all the “data” for this
understanding if action is required
indicator it does not provide any insight on whether action is
required or not. The “information” is more effectively conveyed
More Effective KPI Graphic with the lower graphic that intuitively shows if the value is
Easy to understand current “better” or “worse” relative to our goal. It instantly
position and desired position.
communicates whether or not I need to take action on this item.

Group or Nest Large Quantity of KPIs

Most reporting includes far more metrics than we can really
focus upon. Studies suggest that humans can only focus on 4
to 7 things at once (Miller's Law says 7 ± 2 but others say 4) –
far less than the 75 “Key” Performance Indicators we reference
categories).

Even simple design is important to help us make sense of a

large number of metrics and then drill down into those of
Use Icons for Multiple KPIs
interest by grouping, “chunking” or otherwise simplifying the
Stoplights are one way to
simplify large data sets. information presented.

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Conclusion
This overview identified the types of metrics that can be used
for Facilities Management, and the value of each type. It also
identified how useful metrics are situational – both over time
and by the job function of the user.

Key Performance Questions can be the best way to develop

KPI’s that are useful, and these need to be reviewed to ensure
they still align with organizational needs and are appropriate for
the designated user.

Finally, the typical metric interfaces were reviewed to describe

considerations for selecting the presentation most appropriate
for the desired purpose.

Interested readers may also want to consider one of the

publications listed as references.

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 About the Authors
Chris Dodds is the President of Facility Team, an Integrated
Workplace Management Software (IWMS) system that allows
users to create and track whatever metrics and KPIs they want.
www.FacilityTeam.com

Bob Lambe is the President of RAL Location Strategies, a

consulting firm that helps organizations identify the facility
assets and associated data/systems that best support their
business objectives. www.RALStrategies.com

The Following References are all available on Amazon:

Key Performance Indicators, Developing, Implementing, and Using Winning KPIs

By David Parmenter

Key Performance Indicators, The 75 Measures Every Manager Needs to Know

By Bernard Marr

The Maintenance Scorecard, Creating Strategic Advantage

By Daryl Mather

Analytics at Work, Smarter Decisions, Better Results

Thomas Davenport, Jeanne Harris and Robert Morison

How to Measure Anything, Finding the Value of Intangibles in Business

By Douglas Hubbard

Key Performance Indicators For Dummies

By Bernard Marr

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