By, Marc Petock
Vice President, Chief Marketing & Communications Officer
Lynxspring
Building owners and operators are constantly tasked with the need to make decisions about operating and managing their buildings that will have an impact on their bottom line. This means making investments in facility operational improvements by replacing what they have, upgrading existing systems and equipment, repairing what is there or just doing nothing.
Regardless of the decision, an important question that needs to be asked and answered, is how do you measure the effectiveness of the decision? Most of the time, and historically, we have used ROI and NOI as an indication of how well a particular change works. In the case of the built environment, there are other outcomes that can be used to measure success: occupant satisfaction, asset and property valuation, occupancy rates, risk mitigation, cost reduction and efficiency, CAPEX/OPEX planning and balance, building resiliency, maximizing equipment lifetime compliance requirements and more.
However, there is one measurement that many times goes neglected, THE COST OF DOING NOTHING. This is the cost of not making decisions that could have a positive impact on your business and in our case, building and facility management and operations.
The cost of doing nothing is often used in various contexts to highlight the potential negative consequences or missed opportunities that can arise from inaction or the decision to maintain the status quo. The specific cost of doing nothing can vary widely depending on the situation, but can generally refer to the following:
Missed Opportunities-By choosing to do nothing, you may miss opportunities for improvement, better efficiency, cost savings increased asset value, reduced risk etc.
Stagnation-Doing nothing can lead to unhappy occupants and tenants who decide to go elsewhere.
Increased Risk-In some cases, not acting can increase the risk of negative outcomes. For instance, ignoring health issues or failing to address environmental problems can lead to more significant and costly problems down the road.
Deterioration- In situations where maintenance or upkeep is required, such as with infrastructure, equipment, or property, the cost of doing nothing may lead to deterioration, which can result in higher repair or replacement costs.
Loss of Competitive Advantage-In competitive situations, not taking action to stay ahead of the competition can result in a loss of market opportunities, a weaker market position and a weaker brand.
Social Environmental Consequences- Not addressing social or environmental issues can result in long-term costs, which may be more expensive to address later.
Our built environment is experiencing the most transformative and compelling application of innovative technologies in businesses today. The challenge is not technology—it is here, and it is proven—but it is the willingness and preparation to now take advantage of it. Making an investment in smart building solutions is a big step but it comes down to identifying gaps, finding right-sized solutions, and unifying systems so that you can control, monitor, and take an initiative-taking approach.
It is always important to keep in mind that the cost of doing nothing is not always financial. When evaluating the cost of doing nothing, it is essential to consider the specific context and the potential short-term and long-term implications of. While the cost of action may seem high, the cost of doing nothing is higher.
