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Facility Management and Its Importance in the Analysis of Building Life Cycle

Article  in  Procedia Economics and Finance · December 2015

DOI: 10.1016/S2212-5671(15)00814-X

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Procedia Economics and Finance 26 (2015) 202 – 208

4th World Conference on Business, Economics and Management, WCBEM

Facility Management and Its Importance in the Analysis of Building

Life Cycle
Marek Potkany a*, Milota Vetrakova b, Martina Babiakova a
a
Technical University, T.G. Masaryka 24, Zvolen 960 53, Slovakia
b
Matej Bel University, Tajovskeho 10, Banska Bystrica 975 90, Slovakia

Abstract

Since buildings count for half of the primary energy sources consumption as well as half of all consumed raw materials, produce
hundreds of million tons of waste and a third of the world’s CO2 production, construction and building of low energy buildings
has become an international trend. More than transportation, mining industry, or any other type of industry it is primarily the area
of building industry and building administration that lead to better management of narrow resources as well as to the reduction of
greenhouse gases emissions. In this area facility management also plays an important role. The aim of the article is via analysis of
building life cycle to present possibilities of the influence of a facility manager on the investment and running costs of buildings
with respect to the environmental management principle.
©
© 2015 The Authors.
2015 The Authors.Published
PublishedbybyElsevier
ElsevierB.V.
B.V.This is an open access article under the CC BY-NC-ND license
Peer-review under responsibility of Academic World Research and Education Center.
(http://creativecommons.org/licenses/by-nc-nd/4.0/).
Peer-review under responsibility of Academic World Research and Education Center
Keywords: Facility management, life cycle assessment, competitiveness, facility manager;

1. Introduction

Facility management is a term which is closely associated with building management. More broadly, facility
management should not only be understood as general building management connected with everyday building
operation but it should also include long term planning and focus on its users. This should already be essential in the
preparatory phase of investment process focused on construction of building itself. Major part of operation costs and
effectiveness of facility management processes is defined already at project of building. An important factor is also

*
Marek Potkany. Tel.: +421-45-5206-437
E-mail address: potkany@tuzvo.sk

2212-5671 © 2015 The Authors. Published by Elsevier B.V. This is an open access article under the CC BY-NC-ND license
(http://creativecommons.org/licenses/by-nc-nd/4.0/).
Peer-review under responsibility of Academic World Research and Education Center
doi:10.1016/S2212-5671(15)00814-X
 Marek Potkany et al. / Procedia Economics and Finance 26 (2015) 202 – 208 203

the ecological aspect of building influence on the living environment due to materials used for its construction as
well as energy consumption necessary for its operation.

2. Theoretical and methodological aspects of the issue

If we want to assess energy performance of buildings or its influence on environment, we have to analyse the
whole building life cycle (starting with building materials up to the building deconstruction and its recycling) and
not only the period of the building use. Such an analysis is called life cycle assessment. According to definition of
Life Cycle Assessment by US Environmental Protection Agency Life cycle assessment is a technique for assessing
the product influence on living environment connected with all life cycle phases (i.e. from raw materials extraction,
material processing, manufacturing, distribution, use, repairs, maintenance, up to deconstruction or recycling). Life
cycle assessment (LCA), is also known as life cycle analysis, ecological balance or from cradle-to-grave analysis).
By the ISO 14040 (2006) LCA comes before the narrow view on environmental protection:

x creating the list of corresponding energetic and material incomes and outcomes (emissions, waste) into living
environment,
x assessing possible influences (consequences) connected with the identified incomes and outcomes,
x interpreting the results which enable erudite (qualified) decisions.

To explain the scope of facility management we can use the definition of IFMA (International Facility
Management Association, a respected representative of the majority of world facility managers) which defines
facility management as “a method whose task in organisations is to mutually harmonize employees, work activities
and the work environment that includes principles of business administration, architecture and humanities and
technical sciences” (Vyskocil, 2009). Facility management (FM) is an effective form of outreach business
management which aims to provide relevant, cost-effective services to support the main business activities (core
business) and allow them to optimize. As follow from several studies Potkany (2011), or Stacho, Urbancova,
Stachova, (2013) At present, marked by the financial crisis, is the application of facility management most current
because it provides savings and optimization of operating costs promotes increased employee performance and thus
contributes to increase the profitability of the enterprise. The most common forms of application of facility
management in the enterprise is a partial or complete outsourcing. According to the definition facility management is
characterised by the interconnection of the three following areas (Somorova, 2012):

x area relating to employees, i.e. human resources and sociological aspects,

x area of work activities, i.e. area of achievements and financing,
x area of work environment, i.e. architecture and engineering.

Fig. 1. Axis of Facility Management

Source: https://www.axispointe.com/axisfm/fm_diff_one.php
204 Marek Potkany et al. / Procedia Economics and Finance 26 (2015) 202 – 208

According to the definition, facility management is characterised by the interconnection of the three following
areas - axis of facility management (Somorova, 2012) or (Drury, 2001): the area relating to employees, i.e. human
resources and sociological aspects, the area of work activities, i.e. area of achievements and financing and the area of
work environment, i.e. architecture and engineering (figure 1):

3. Energy efficient houses and their life cycle

With the continual increase of world population energy consumption is growing continually as well and in
parallel there is an increase in CO2 emissions. Buildings during their lifetime use approximately 40 % of energy,
while its operation concerning heating and cooling counts for 60-70% of this consumed energy. The most suitable
solution means building houses with low energy demands which do not harm the environment (Suchomel et al,
2011). Constructors can this way contribute to saving worldwide energy, lower emissions and what is crucial, they
can considerably lower heating and cooling costs within the building. There exist several types of buildings which
actively cope with the requirements of minimising the energy consumption of their operations. Tywoniak (2010)
declarates that, globally these are understood as so called energy effective houses (EED), which include low energy
houses (NED), energy passive houses (EPD), energy self-sufficient houses (END), energy independent -autarkic
houses (EAD) as well as plus energy houses. In this article we will closely focus only on low energy and energy
passive houses. Division of these buildings according to heat consumption is presented in Figure 2.

Fig. 2 Division of buildings according to heat consumption (kWh/m2/per annum)

Source: [online] http://www.modernerodinnedomy.sk/archives/684

Life cycle of a building can be according to United Nations International Development Organization (UNIDO) as
well as conditions of the Slovak Republic defined into three basic phases (Ivanicka, 2007). Differences are presented
in figure 3.

Fig. 3 Life cycle of building according to the UNIDO and conditions of the Slovak Republic
Source: Miske, 2010

Phases of building life cycle of energy efficient buildings (acquisition, use, deconstruction), in general do not
differ from classic buildings, but in more detailed specification there are certain differences in the phases of its
 Marek Potkany et al. / Procedia Economics and Finance 26 (2015) 202 – 208 205

acquisition and use.

In the phase of acquisition which includes initial study, preparation, design and project realisation leading to final
construction the following criteria have to be fully respected:

x when locating the building into the terrain it is necessary to consider cardinal points and the character of the
surrounding buildings with the main requirements of suitable big windows with the South orientation,
x avoid creation of thermal bridges and secure accumulation of passive energy profits in winter and shading the
building against overheating in summer,
x to avoid energy loses it is important to design air tight walls, choose high quality windows, roof construct,
x controlled ventilation with heat recovery (ventilation with back trapping of heat) will secure necessary income of
fresh air with the minimum energy loss.

The phase of using energy sufficient building has its advantages but of course some risks. The advantages in
comparison with classic brick buildings are:

x saving energy costs for heating represent about 80 %,

x high quality of interior air climate,
x if the building is well insulated, in summer the interior does not get overheated, controlled ventilation can divert
moisture and constant flow of fresh, clean and dust free air can circulate the building.

On the other hand a disadvantage is the increase of investments in comparison with the classic building when
considering improved insulation of the building envelope (more and higher quality heat insulation with specific
characteristics), investing into more quality windows, doors, heat recovery unit and requirements for highly qualified
and quality construction details. These increased initial investments are though compensated by energy cost saving,
which during a building life cycle represent a quick return on investment.

4. Cost of building life cycle

Costs of building life cycle represent the total costs from all building life cycle phases, i.e. costs for acquisition,
use and deconstruction.
It is obvious that costs of each building life cycle phase are influenced by various factors such as the purpose,
space, construction and material solutions of the building design. Financial costs of each phase of the building life
cycle cannot be mutually directly compared. This comes out from the change of money value over the time which
cannot be compared during usually a long lasting building life cycle. Therefore it is necessary to calculate all
financial values of regular periods to its present value within certain time period. This time period is usually the
beginning of the building acquisition.
Method of building life cycle costs is a way of calculation of present cost value for its acquisition, use and
deconstruction and serves for those building solution variations which require the lowest cost for its operation and
running. The basic prerequisite of the use of this method is the fact that for the investor are, except present costs,
important also cost for future ownership and use of the building. Costs of the life cycle should include at least 3
groups of costs, corresponding with real time “t“ within the overall considered time spam (Miske, 2010):
1. C acq,t = costs for acquisition of building, concerning the period t,
2. C use,t = costs for use of building, concerning the period t,
3. C dec,t = costs for deconstruction of building, concerning the period t,

Then to set the costs of building life cycle (Ct), concerning the period t the following pattern is valid:

Ct = C acq,t + C use,t + C dec,t (1)

These three groups can be according to their needs and availability of input data divided also into more detailed
cost entries. Calculation of total costs of the building life cycle for i- variation of building design lies in addition of
206 Marek Potkany et al. / Procedia Economics and Finance 26 (2015) 202 – 208

all building life cycle costs. Current values of all concerned costs are calculated within one given time t=1 with the
pattern:

TLCC I = σ௧ୀ்
௧ୀଵ ‫ܥ‬௧ ‫ݔ‬ሺͳ ൅ ‫ݑ‬ሻሺͳ ൅ ‫ݑ‬ሻ
ି௧
(2)

TLCC i = total building life cycle costs for variation i = 1,..., n

n = number of considered variations of building designs t = 1, 2,..., T
T = length of building life cycle in the number of individual periods, t
u = interest rate in absolute formulation,
Ct = building life cycle costs, concerning one particular period t

5. Facility managers and their task in individual building life cycle phases

Facility managers can be found in any type of a company while they are responsible for managing of all support
enterprise processes. They are responsible for fulfilling such tasks from the area of support processes which require
managing other employees in particular enterprise (Vyskocil, 2010). Such a manager is in practice understood as so
called internal facility manager. Internal facility managers are first of all a managerial employee. Their main mission
is to find such a form of facility management (enterprise support) where is a possibility with acceptable costs
towards the most quality support of all employees within an enterprise and to an optimal supply services of
records/files and running of real estate and assets/equities. In case that outsourcing becomes the form of the FM, it
means that the services are provided by external staff, an internal facility manager will be responsible for (Strup,
2008): facility management policy, facility management strategic administration, setting of standards and tactical
instructions, definition and measurement of key performance indicators (KPI), selection of external suppliers (in
cooperation with sales department), negotiation of exact conditions of FM contracts and SLA (Service Level
Agreement), financial planning (including proposal draw-ups for reconstruction and major refurbishment investment
plans) and performance quality control of external providers.
Building life cycle begins with acquisition phase (including investment project, project preparation, design of
operational projects, building construction and final building approval). Then it continues with a use phase, which in
course of time requires rebuilding, revision, maintenance and reconstruction. Final phase of the building life cycle is
the deconstruction phase.
Very often the tasks and competencies of a facility manager correspond with the phase of building use, i.e.
building operation, especially with the need of operational costs management (Mrackova, E., Hitka, M., Sedmak, R.
2014). Facility manager though can take part in the building life cycle much earlier. An ideal approach is if the role
of a facility manager is implemented already in the initial phases of building life cycle. Such a solution has many
advantages and brings about also significant savings of finance both at investment costs as well as later the
operational ones (Miske, 2010). Engagement of facility managers into individual phases and building life cycle
stages with more detailed specification of their tasks and competencies is presented in Figure 4.
 Marek Potkany et al. / Procedia Economics and Finance 26 (2015) 202 – 208 207

Fig. 4 Tasks of a facility manager in individual building life cycle phases

An important phase of a building life cycle where it is possible to influence the future basic operational costs on
a maximum rate is the phase of building acquisition (pre-investment phase). It can be stated that 50% - 70% of future
building operational costs can be influenced already in the acquisition phase (project design) of a building. The
output of project process which is the part of preparatory phase of an investment process is the project
documentation. It sets the space-disposition and material solutions of the building. Most of the operational costs are
conditioned by the area and material equipment. These factors are the most crucial in setting energy demands of the
building and its operational maintenance.
Future amount of basic operational costs of a building in the project phase of the investment process is decided
directly by a building acquisition manager (investor, developer, project designer, but also facility manager) and
indirectly also valid standards, limits, state and other subsidies. Including a facility manager into the beginning of
building acquisition already at the investment project design is from the aspect of strategic aims of the manager
absolutely necessary.
Facility manager as a consultant should take part in formulating the limiting conditions in the project design phase.
Facility managers can on the bases of their experience define requirements for the use from the point of view of
future basic operational costs. It specifies an optimum functional programme of the spatial use of the building (e.g.
limiting unused areas) from the point of view of future users, surface of some constructions (walls, floors)
concerning the future maintenance, building material solutions from the point of view of future maintenance and
repairs, as well as detailed, infrastructure and technical equipment necessary for the technical equipment support of
the building. Early and correct definition of such requirements for a building is necessary. Facility manager mainly
in co-ordination with investor and project designer define requirements for the building from the point of view of
strategic objectives and so it can cause lowering the investment costs and better facility management services
towards building users.

6. Conclusion

Building life cycle costs represent the total costs from all life cycle phases, which according to given analysis
have to be calculated as present net value. Most of operational costs are conditioned by space and material solutions
and its technical equipment. These factors predetermine energy demands of a building and its operational
maintenance. A modern, ecological and economical solution means constructing energy efficient buildings, which
except of their ecological approach fulfil requirements for minimising energy effectiveness for their operation.
Facility managers can with their active attitude already in the phase of building acquisition influence the future
208 Marek Potkany et al. / Procedia Economics and Finance 26 (2015) 202 – 208

operational costs. Facility managers should correctly define requirements for tasks of outsourcers of particular
support services within a building, such as cleaning, hygiene, maintenance, catering, administrative and many more
services for each object of specific parts of the operation. Facility managers should define individual construction
elements, e.g. tread flood surface, surface wall finishing, effective distribution of entrance doors and so on, in such
a way, so that the maintenance costs are minimal. Within the construction building preparation a facility manager
should give requirements for suitable building envelope with suitable heat resistance, which will prevent heat losses
and so will contribute to lowering the costs for heating. Accepting suggestions of a facility manager and their
implementation into project design can influence the effective services management of facility management in the
phase of building use and consequently also to the life time of a building.

Acknowledgements

This paper is the partial result of the Ministry of Education of Slovak Republic grant project VEGA No.
1/0268/13, „Perspectives of facility management application for the increasing of competitiveness within the wood
processing and forestry companies in the context of outsourcing principles”

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