How to Develop Building Portfolios for More Strategic Project Prioritization

Download our latest guide, “Planning for the Future: Strategies to Reduce Facilities Risk and Improve Investment Prioritization”, for more practical insight into facilities planning strategies that help establish a better prioritization framework and create more useful, long-term assessments.

All too often, facilities managers at higher education institutions think of their facilities as having similar needs when, in truth, each building has its own unique functions and challenges. When all buildings are treated the same, project prioritization becomes extremely difficult.

Not every building is created equal, so with more need than available funding it’s important to determine which projects are most critical for meeting both the technical needs of the campus and furthering the organization’s mission. Consider thinking of each facility as an asset in a larger building portfolio. This approach allows you to prioritize projects and makes it easier to secure funding for strategic improvements.

Using a portfolio to provide framework

Much like a financial portfolio, a building portfolio provides a framework for determining how to best invest resources. Using portfolios allows you to segment the campus into different groups of buildings.  This helps you see where each building fits into your school’s overall goals and mission. Different investment strategies can then be applied to different portfolios to enhance the institution’s mission and direction.

A portfolio approach provides numerous benefits for facilities managers and the campus as a whole, including:

  • It leads to more strategic decision-making.
  • Because it’s a highly disciplined process, it can be sustained over the course of years.
  • It creates a big-picture view that can be understood by successors. Portfolios can be handed off in a way that easily can be transferred from leader to leader, and board to board.
  • It allows institutions to plan for a longer horizon.

The first step in developing a portfolio approach is to begin thinking about the ways that buildings behave and the value they hold as assets.

Bring in outside viewpoints to support your organization

If you’ve never positioned your facilities in a portfolio framework, begin by assembling a team of individuals from across the organization who have a stake in furthering the institution’s mission. To understand what each property contributes to the school, seek out insights from key decision makers, including financial professionals, individuals who understand the academic and student life missions, and experts who understand any legacy issues around specific buildings. Then you can begin the process of organizing your facilities into useful categories.

These varied groups can provide a vast amount of insight for making the most strategic decisions for meeting the institution’s overall mission. But by involving decision-makers outside of the facilities management department, you can also gain insight into factors that wouldn’t appear on any traditional facilities investment. Consider, for example: in financial portfolios, investments are made where they make the most sense for the individual, endowment, or similar. Campus portfolios, however, must take into account the emotional ties donors might have for buildings bearing their names, or the connection a group of donors might have to a building central to campus life. These legacy issues will affect future investment decisions and should be carefully noted in your portfolio documentation.

Analyze your portfolio’s performance

The next step is to take a disciplined, data-driven look at your portfolio to determine how to deploy your resources. Your goal is to understand if each asset is performing as intended. But it’s not enough to know how the building is doing. You will also want to understand the “why”.

For example, if a residence hall is chronically underutilized, is it because the hall is no longer needed? Or has the campus center of gravity moved over time so students no longer want to live in this building? If the latter, what can you do to change students’ minds?

There are many reasons a building may underperform. For example, if newer residence halls with air conditioning are in demand, it may be time to upgrade older halls. Alternatively, it may be possible to attract residents to those building by assigning them a new function, such as creating a language- or service-based home that will attract a growing segment of the student community.

Data can help to create a clearer picture of the problem and uncover potential solutions. Data can also be a strong persuader, giving decision makers tangible evidence to work with.

Confront the reality of your portfolio

Once you have a strategic framework in place, it is possible to have the conversation with financial decision makers about how to deploy your institution’s limited resources.

Keep in mind, not every facility or facility type may be vying for resources at once. Project prioritization is about understanding which investments can be deferred in the short-term to address the most urgent needs first.

Take a critical look at your portfolio assets and assess their strengths and weaknesses. You may find, for example, that academic spaces are performing well, but residence halls are not meeting expectations. Or buildings on an older campus may have unmet maintenance needs but, for some reason (for instance, location), students still prefer them to the newer campus. By viewing a building portfolio as a whole, you can make decisions in a methodical fashion to address the most important student, faculty and strategic needs.

With a portfolio framework in place, you can strategically prioritize improvements, building by building, day by day.

 

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