The ENTOUCH Blog

09. 27. 2017

3 Financial Challenges of Higher Education Facility Management

Higher education facility management objectives align with institutional goals to achieve better cost savings, meet the backlog of maintenance and more.  

Across the spectrum of public and private institutions of higher learning, budgets are declining, enrollment is decreasing, and the need to do more with less is growing. This triad creates great challenges for managing finances in higher education facility management. Legacy systems, outdated data models and gaps between existing higher education facility management systems and goals worsen the problem. To overcome the financial challenge of higher education facility management, facilities managers need to understand its causes and how smart building technology can overcome them.

1. Federal and State Funding Continues to Decline

As explained by “The State of Facilities in Higher Education: 2014 Benchmarks, Best Practices & Trends,” aging spaces continue to see little renovation and asset reinvestment, which are the costs of deferred maintenance. Also, federal funding for both private and public institutions is an ongoing debate. Population redistribution forces smaller schools to seek new funding sources, and the per-student costs are growing. Institutions face added pressure to keep tuition costs down, resulting in pressure to make strict budget cuts, repots the Connecticut Post. For facilities managers, this means facing more cuts in the future.

2. Fixed Costs Rise, and Aging Buildings and Systems Need Upgrades

The term, fixed costs, is a major misnomer. Fixed costs are the charges a school must pay regardless of enrollment, like utility costs. While funding has decreased, fixed costs are increasing, and aging buildings with poor weatherization standards, like drafty areas and single-pane windows are hemorrhaging money to pay such costs. The rate of building new structures has also grown stagnant; most institutions have not yet returned to pre-Recession rates, reports the New England Board of Higher Education.

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In fact, the rate of deferred maintenance among 25- to 50-year-old buildings has doubled over the last 25 years, and more than 60 percent of space in today’s higher learning education institutions falls into this age group. Upgrading these facilities, addressing the backlog of maintenance and creating protocols to isolate maintenance issues as soon as possible, such as using internet-connect smart building systems in higher education facility management options, are essential to addressing rising fixed costs and aging buildings.

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3. Facilities Management Is Often the First Department to Receive Cuts

Although enrollment and funding have declined in recent years, institutional capital funding has risen by at least 37 percent. These funds reflect those gathered through bonds and private donors, but they are still insufficient if institutions continue using the systems and higher education facility management processes of the past. Paired with the demand for lower tuition and budget cuts for block grants and funds from federal and state governments, explains Katie Lobosco of CNN Money, administrative officials tend to cut facilities management operations first. However, the need to address the backlog and prevent issues from arising in the future continues. Thus, facilities managers in higher education must find a way to do much more with fewer resources.

Higher Education Facility Management Tech and Automation Are Key to Doing More With Less

Higher education facility management can benefit from an infusion of automation and modern tech in existing institutions. Wireless technology also allows facility managers to retrofit space in the 25- to 50-year-old age group, which can overcome the fiscal challenges of higher education facility management. Moreover, automated systems, like ENTOUCH.ONE or ENTOUCH.360, allow campuses to operate internal facility management programs (ENTOUCH.ONE) or outsource the bulk of operations to a third-party (ENTOUCH.360). Having the ability to select the system best for your institution is key to overcoming challenges and still meeting traditional facility management demands.

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