Why Data is Key to Your 2021 Facilities Survival Plan

After a challenging 2020, retailers are eyeing the year ahead with quiet optimism. The arrival of coronavirus vaccines means an end could be in sight to the constant closing and reopening that defined the last year, and stores can look forward to a release of pent-up spending when shoppers venture back out.

However, nothing should be taken for granted, and businesses must lay a strong foundation of financial discipline to ensure they survive the year ahead. A big part of this depends on how physical locations are managed. Store operations have become a top priority for senior leaders, from ensuring cleanliness to reconfiguring layouts for social distancing. Boarding up against social unrest capped an unprecedented year.

Retailers must manage this activity with maximum efficiency, oversight and predictability. My company connects chains like Best Buy, Kohl’s, Nike, and Louis Vuitton with the contractors who perform their cleaning, repairs and maintenance. Senior leaders tell me they’re myopically focused on stripping out cost while providing the safest and best experience for customers.

It’s become a cliche to talk about data, but that’s exactly what smart brands are depending on to minimize costs and optimize planning for 2021. This is no time to manage facilities “by feel” or in an ad hoc manner.

Here are some of the ways retailers we work with are using data to fortify themselves in 2021:

Benchmarking

There are several ways to benchmark costs and ensure you’re spending the correct amount for tradespeople such as cleaners, technicians and carpenters. They include benchmarking externally against peers and internally across regions.

For example, if 40 percent of your facilities spend goes towards cleaning and sanitation and your peers are spending 20 percent, you need to understand what’s causing the difference. What’s your mix of spending across trades and what accounts for deviations from the norm? This could be a sign of wasted spend.

You should also ensure your contractors are charging fair rates. Comparing providers across cities and states is a place to start. Hourly rates can be misleading, since some providers resolve problems a lot faster. What’s the empirical time spent, and what do the actual invoices tell you? We’ve found that hourly rates rarely correlate with lower costs.

Performance Management

Quality of service matters. It’s the difference between a parking lot being closed for two days for repairs or a week. How consistently are your contractors performing? Can you identify the 10 percent that consistently show up late, and manage them out of your network?

Do contractors show up on time and perform the work they say they have? Data from smart devices can show exactly who turned up when and how long they spent on site. This is invaluable for managing performance, but also for another critical area: compliance.

Compliance

Compliance is always challenging, but the pandemic has taken it to a new level. Besides having a duty to ensure worker and customer safety, some retailers are facing lawsuits over COVID-19 exposure in the workplace. Ensuring sanitation is performed properly is essential for reducing exposure to liability, and that means having the data trail to prove it.

Could you produce a work order for the second week of May for a store in New York to show that it was properly cleaned before an employee got sick? Having this data on hand can save huge headaches down the road.

Faster Insurance Claims

Between a record hurricane season, damage from social unrest, and claims related to the shutdown, tensions between insurers and the retail industry are high. Century 21 claims it went out of business because its insurer failed to play out on its business interruption policy. Many of these disputes end up in court.

If you do file a claim, an audit trail will help you avoid disputes and get paid faster. Insurers want proof that you had repairs done when and where you say you did. Make sure you have the relevant invoices on hand.

Budgeting and Planning

Accounting teams planning for 2021 need all the help they can get. Having COVID-19 expenses sequestered from normal run-rate costs will allow you to categorize spending precisely and budget more accurately for the year ahead.

Accounting teams also benefit from a detailed picture of repair and maintenance costs. Where were COVID-related costs incurred? Where can they be reduced this year? Having detailed work order information turns facilities spending from a black box into something that can be managed and controlled.

Approvals Automation

Most teams are having to do more with less. Automating routine tasks allows your staff to focus on what’s important. For example, applying machine learning to historical data allows work orders to be approved automatically as they come in. If a work order is in line with previous costs, it shouldn’t need manual attention. With data, understaffed teams can focus on the exceptions and free up time for more important work at hand.

I’m optimistic the retail industry can emerge stronger from this storm, but thriving in 2021 requires discipline and a deliberate plan to manage the business efficiently. Using data to manage your physical locations will be an essential part of that.

Tom Buiocchi is the executive director, president and CEO of ServiceChannel, the leader in facility management software and contractor sourcing.