3 Smart Questions to Ask About Project Selection Right Now

With all the pressure on organizational finances due to the COVID-19 pandemic, it can seem wise to pause or eliminate plans for capital expenditures. There’s a clean logic to this way of thinking: If the budget is getting slashed, stop spending.

So everything freezes. New buildings and renovations get put on hold. Renewal funding for building upkeep is eliminated. But this logical spending hiatus is actually detrimental for facilities, as pausing planned projects can accelerate deferred maintenance and impede investments. That’s a wicked combination. The stakes are enormous for the few projects that do move forward: Deliver revenue or jeopardize the future of the organization.

But how do you choose which projects should move forward and which should wait when the budget is under tremendous strain? Ask yourself three questions when considering a capital project.

Project Selection Question 1: Will This Project Affect Business Continuity?

When reviewing a potential project, it’s important to detail and prioritize any critical issues related to building reliability. Imagine the systems and areas of your facility that would be catastrophic to lose, then move these projects to the front of the line. Unplanned outages create sizable expenses that make difficult budget scenarios unmanageable.

Project Selection Question 2: Will This Project Help Us Avoid Costs?

Sometimes, completing a capital project can save an organization money in the long-term. It sounds counter-intuitive, but it’s true.

Consider energy use. Installing a new, high-efficiency system can reduce annual utility costs significantly. Over time, the savings outpace the cost of the project.

These kinds of projects are smart opportunities for savings, to be sure. But often the low-hanging fruit — like energy systems — has already been picked. To find areas of cost avoidance, search for buildings and systems that command a disproportionate amount of time and resources to maintain. Targeting those areas for investment can help you avoid operating costs.

For more advice for making strategic reductions around capital project selection, space management, operations and service levels, download our free eBook, “Smart Opportunities for Savings: Navigating the Facilities Budget Shortfall.”

Project Selection Question 3: Will This Project Help Us Create Revenue?

Times are tough. Any chance your organization has to react to customer needs and generate revenue is an avenue worth exploring. Would repurposing or improving a space inside a facility allow you to provide a service your community needs, increase appeal and recover lost income? Be imaginative. Organizations often have more space at their disposal than it seems. For instance, our space utilization data for college and university classrooms shows that the average classroom is only occupied 60% of the available time, and when it is in use, a third of the seats are unoccupied.

These smart investments can help reduce the need for — or the magnitude of — budget cuts.

Capital Project Selection: Inaction Can Be Costly

In times of financial strain, pausing all capital projects is an option. But it’s not the only option. By gathering the right data and asking the right questions, you can select projects that will help you save money or generate revenue.

Watch this video to learn more smart facilities considerations to make during capital planning.