Get Smart - The Risk of slipshod Risk Management

Recently I met a Facilities Manager who was in the midst’s of a stressful legal battle which stemmed from an oversight which could very easily have been avoided. It wasn’t altogether his fault, in fact it’s fair to say that it was his boss’s channeled vision which brought them to strife. Perhaps the Facilities Manager wasn’t firm enough in what he believed, but for whatever reasons, Corporation X had decided to cut the FM budget as a knee jerk reaction to the economic downturn. 

We understand ‘cutting the budget’, it happens all the time and quite often the FM budget is one of the first to suffer for obvious reasons. There are smart ways to cut the budget, like working in partnership with your suppliers and re-negotiating your contracts; or re-assessing your energy spend which will save money in the long term as well as address your corporate environmental responsibilities. Small gains add up. There is currently no law on how much you spend with your contractors, or how much you improve your carbon footprint. However, there are legal implications if you don’t maintain your assets effectively. Very severe implications in fact, which Corporation X are now learning all about. Their idea of smart budget cutbacks was to slash the budget already allocated for an FM software tool which would have automated the scheduled maintenance of their assets as well as addressed essential safety measures. Their budget was slashed and management deemed a cheap off-the-shelf software to be sufficient for their critical property risk management. No integrated workflow, no automated alarms and a system not adapted to the Australian ESM requirements.

Corporation X didn’t get a fine for not having their ESM schedules up to date – although that will be a big issue this year with the new law on compulsory ESM schedules coming into play. Corporation X had a malfunction on a major asset which was overdue for service and which resulted in an OH&S incident, which in turn escalated into an avoidable legal situation. A scheduled service on this asset would have prevented any issues, but this is a typical case of slipshod Risk Management.

Get smart where you cut your budgets in this financial crisis. The fines and legal fees associated with risk management and compliance are far greater than the cost of good FM management tools. Don’t wait to find out the expensive way what is so obvious.  Should you have no immediate budget, work with your software partner to put in place a payment structure which mitigates the financial burden and alleviates the financial risk.

There are consultants and businesses who can help you to establish the most suitable FM systems for your business. For information on accredited FM partners and software solutions, you can contact us. 

Kristiana Greenwood,

Director FM Innovations