Where an Operations Dollar Goes

Where the Money Goes

Of all the $$ put into a facility over 10 years

Cost of Operations DollarThe importance of applying good Human Factors in design is recognizing that so much invested value is dependent upon good design.

Safety must be paramount- nothing is safer than promoting the vigilance of those persons running the plant. Good people must be retained, and recruitment must be supported.  What we’re talking about is the leading edge of the Time-Value Chart.

The chart tells us that 82% of all costs spent over a ten year period on a structure once the bldg is in place goes to People:  salaries, benefits, taxes, vacation, sick time, recruiting, training, retention, etc. The next 10% of all dollars spent go to the specialized IT & computer systems, cable/fiber infrastructure systems beyond normal systems within the building. 5% goes to the Design & Construction:  5% of this 5% (depending on the size /complexity of the building) is for the Design services.  Rounding this tabulation up is 3% of all the dollars spent goes to the Operations & Maintenance.

As expensive as energy is, it pales in comparison to the cost of people.  If a good design can save (by not constructing) 10% of the building area considered just through good design understandings, the design fee can be covered by the savings.

For a 25,000 sf bldg: 10% saved (2500 sf) @ 350/sf = $875,000 in costs NOT spent.

A normal Design Services fee for a 25,000 sf building may equate to 5-6% of the construction costs for typical architectural services within the battery limits.  For a design fee range of ~$8.75MM x 5%= ~$438K in design fees.  Keeping the same ~5% design fee on a smaller bldg is 393K fees, plus the owner didn’t build ~$875,000 worth of building area: this indicates a $1.25MM savings could be realized.

These are strong incentives when recruiting and retaining workers when one factors in what it costs to train and develop employees.  Another way to look at this is to say that of every 100 dollars spent on Building Operations costs for that 25,000 sf example building, it will break down over ten years as:

  • $82 for people,
  • $10 for IT Systems,
  • $3 for Ops & Maintenance,,
  • just under $5 for Construction costs,
  • and of this, 25 cents per 100 dollars spent over 10 years on the Design of the facility.

Ignoring for a moment the profits developed by having that facility in place, from a purely maintainability perspective, it just makes sense to have better people-support designed into the facility to wield the most efficiency & savings. Including the higher profitability, lower absenteeism, and higher job satisfaction and better recruitment & retention capabilities if better human factors are designed into the structure….Good Design pays on-going dividends as cost savings.  Poor Design pays dividends too- every time the lights are turned on, we have to live with & pay for lost functionality.

1 comment

  1. Joe says:

    I really enjoy the article. Really looking forward to read more. Really Great.

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