When you’re managing a large portfolio of assets, such as schools, university campuses, retirement villages, shopping malls, or office buildings, it can be hard to keep track of individual status. This makes financial planning difficult: how do you know what assets most urgently need interventions? Have some assets reached the end of their life and need to be replaced?
Facility Condition Index (FCI) analysis is like a health check for your assets. It lets you know if and when they need to be replaced. Having this kind of visibility is important to make informed decisions, as the physical condition of assets is a critical factor in their performance and value.
🔩 How FCI works
Analysing FCI of your asset portfolio typically starts with a Facility Condition Assessment. This is carried out to understand the condition of assets within each facility, through on-site inspection as well as modelling. Asset management software such as AssetFuture is helpful here, as it can draw on a huge degradation model library to get a more accurate idea of when and how a building may deteriorate.
FCI indicates where your buildings are functioning well, and identifies areas that need immediate improvement. This enables a more proactive and strategic approach to asset management planning, avoiding more costly, critical failures and instead potentially extending the life cycle of assets.
🧮Calculating the FCI score
FCI analysis gives you a measure of performance and visibility of the condition of your assets, the total cost of backlog as a function of the total asset replacement cost. It’s calculated as a ratio of the current deferred replacement cost against Asset Replacement Value (ARV). A higher percentage of FCI indicates that assets are in poorer condition.
Good - 0 to 5% FCI
Fair - 5 to 10% FCI
Poor - 10 to 30% FCI
Critical - greater than 30% FCI
For example, a residential building that needs $200,000 of replacements, which would cost $4 million to replace, scores 5% which is "good". But if the replacements needed to exceed $1 million, the building would score 25%, edging into the "critical" zone. At this point, the organisation may want to weigh its options if they should divest or continue to maintain the site.
🤝Helping with compliance obligations
Asset managers face increasingly strict requirements when it comes to the upkeep and management of built assets. Retirement operators are dealing with a swathe of new legislation in most states. ABMA (Australian Building Management Accreditation) identifies "over 100+ Acts, Regulations, Australian Standards, Codes of Practice and ‘best practice’ standards imposing duties, tasks, responsibilities, accountability and actions upon building owners and their management teams".
FCI assessment takes these standards into account, enabling issues to be remedied before an organisation is in breach.
Additionally, many organisations want to go beyond compliance. Doing so helps future-proof their business against anticipated changes such as even stricter standards. But it’s also simply good business sense. If assets aren’t looked after, unexpected things happen, which can be disastrous. A single defective humidifier seal in a swimming pool roof resulted in a fire that destroyed the pool and two neighbouring buildings.
💯Taking FCI to the next level
FCI is an extremely powerful tool that leads to easier and better-managed asset portfolios. It leads to more accurate and strategic decision-making and increased asset value. Managers have much better insight into their portfolios and can plan budgets with confidence. To take FCI to the next level, organisations should consider:
Deploying the best platform: using advanced asset management software that can collect and analyse data, using technologies from machine learning (ML) to the Internet of Things to predict vital maintenance and estimate time and expenditure.
Conducting regular assessments: this is essential to maintain up-to-date data and ensure that FCI scores are accurate and useful. Frequent inspections should be carried out to detect and repair any issues that might affect a building's condition index.
Establish comprehensive, predictive maintenance programs: the power of FCI is being able to detect potential issues and address them before they become significant problems. Preventing failure is far less complex and expensive than having facilities break down.
FCI makes life easier for asset managers and the residents and visitors using the facilities they manage. AssetFuture has an FCI dashboard within its platform that enables users to benchmark asset portfolios according to FCI targets.
🚀 If you’d like to know how this can work for your organisation, our experts would be happy to discuss your specific needs, please submit your details below.