Underfunding Routine Maintenance Leads to Problems

By Andrew Gager

June 2014

Breaking the cycle

We’ve all played the game of moving money around to pay the bills ’ robbing Peter to pay Paul, if you will. Eventually, that practice catches up to us and causes bigger problems. In facilities, underfunding routine maintenance can cause deterioration, which evolves into major work and serious conditions. Deferring maintenance only adds to the backlog. When our backlog grows, we don’t have enough resources. When we don’t have enough resources, our backlog continues to grow. The result is a vicious cycle.

Managers need to break out of this cycle of futility and gain control of the situation. Top executives must understand the risks, rising costs, and overall impact of deferred maintenance on facilities. Present a business case and proposal to top management for funds to address the maintenance backlog before it becomes too big to manage.

Managers can take these two steps to start the process:

Recognize. Recognize and calculate the risk of deferment. Assess the true deferred maintenance backlog and the extent of the risk it poses. This step is vitally important in validating the need for funding. A facility condition assessment of current operations and buildings can help managers identify unknown problems and provide a better understanding of the extent of deferred maintenance. The assessment should yield a clearer picture of maintenance needs and the magnitude of the required work. Once the assessment is complete, we can calculate the associated risk and estimated costs based on the results.

Justify. Make the business case for financial planning to reduce the impact of deferred maintenance. When I was an operations manager and one of my managers requested funding without justification, a business case, or a return on investment, I considered it an emotional request, not a business need. When we’re requesting funds to tackle deferred maintenance, it must be predicated on documented data. That data should include the following documentation to build the business case:

• Historical data. No one can argue history. If the data is captured correctly, it builds a solid foundation for justification and business-plan development.
• Potential of risk. Consider my story of the falling tree. What if that tree had fallen on a bedroom in the evening or a kitchen during mealtime? Deferring certain activities can affect safety, health, and environment, as well as occupants and operations.
• Cost acceleration. Managers can use several tools and software programs to calculate and predict future expenses resulting from deferred maintenance.