When you last bought a car, for example, you might have considered the pros and cons of buying a new car in comparison to buying a used one. You’ll have factored in how long the new car was likely to last you and how much maintenance the older car was going to need in order to run efficiently.
This is an example of life cycle costing. Rather than simply looking at the initial cost of whatever it is you’re purchasing, you consider how much it’s going to cost you for the entire span of its life. For a car, you’d want to factor in insurance, repairs, services, and even cleaning costs.
When it comes to your business and LCC, the same principles apply. Imagine you’re looking at buying the latest IT software. First you need to consider if the long-term impact of having the software would make the initial payment worthwhile. Does the current software still work well? Would there be staff training costs involved if you were to install something new? How would this impair productivity?
The same idea applies when it comes to employing new staff. If you’re considering taking on new HR or security staff on a permanent contract, then it’s worth thinking about contracting the work out instead. A new employee’s LCC includes things like the interview process, administrative work, training, and holiday and sick pay. If you outsource that work, you’ll be making a significant cut to your costs without sacrificing on the quality of the work done for you.
If you’re thinking about investing in something new, whether that is a person or a new piece of equipment, then performing a life cycle cost analysis can save you both time and money. This analysis will allow you to assess future resource requirements, decide between suppliers, and assess if assets will need replacing when they reach the end of their economic life.
Not only will the analysis assist with future decisions, but it will help you to improve your current processes and system designs as well as optimise operational and maintenance support. By having a detailed understanding of how much time and money you’re inputting into your current assets, you can make decisions that will ultimately make those assets more efficient.
A facilities management consultant can help you to analyse where your business is losing time or money. By looking at your current methods, whether that is in your catering department or in IT, they can produce a report and then implement strategies that will make your business more cost effective.
If you think that your company would benefit from the help of a FM consultant, then get in touch with the experienced team at Blueshark Consulting. Our Business Reviews not only increase productivity, but the companies who have them see an increase in turnover. To talk to the team about how we can save you money, get in touch.
Blueshark Consulting delivers unique solutions to the obstacles facing businesses every day. The innovative facilities management solutions we provide ensure that our clients are on track and kept one step ahead of their competitors. Thanks to the diverse experience of our team, we fulfil various key roles for our clients according to their needs, from procurement specialist to management consultant. Our level of expertise and knowledge far outweighs any of our competitors and we have the track record to back it up.