The CFO's guide to facility management optimisation: From blind spot to bottom-line impact

As a CFO, you are responsible for the bottom line. You optimise procurement, you challenge the cost structure, and you expect documentation of value creation across the organisation. But what about facility management?  
In many companies, facility management is a blind spot. A budget that often accounts for 5-15% of operating costs, and which simply rolls over year after year, without management genuinely challenging its efficiency, quality, price or the risks that come with it.   

And that is a problem – because there are often millions in quantifiable savings just waiting to be captured. 

Facility management typically accounts for 5-15% of a company's operating budget. For a company with 500 employees, that amounts to DKK 20-50 million annually, covering building operations, cleaning, catering, technical installations, waste management and security.  

Yet in many organisations, facility management is still treated as a necessary evil – a cost that is accepted but rarely challenged in any systematic way. Decisions are made on a decentralised basis, supplier contracts are renewed automatically, and no one has a real overview of total expenditure or the quality of services delivered. 

As a CFO responsible for the bottom line, this is, to say the least, far from an optimal situation. Because how can you manage and optimise something you do not have full visibility of? And how do you prevent facility management costs from simply continuing to grow year on year without delivering real value?  

But the risks within facility management extend beyond the bottom line. A lack of control in this area also creates vulnerability to cost increases, compliance issues and inefficient resource allocation.  

That is why, in this article, you will meet four Danish companies that we have helped take control of their facility management – and the results speak for themselves: savings of between 17.5% and 25% in facility management costs, without compromising on quality. Money that can be reinvested in the core business instead of disappearing into inefficient processes and fragmented supplier agreements.  

A manufacturing company with 17 locations and 2,200 suppliers had for decades placed responsibility and sustainability at the top of its strategic agenda. As one of the first ten companies in Denmark to achieve CSR certification, documenting corporate responsibility was not merely a nice-to-have – it was a competitive advantage and a prerequisite for being a supplier that customers could engage with confidence.  

But with 2,200 suppliers spread across the organisation, ensuring that all of them met the company's high standards was a substantial undertaking – and at the same time, it was difficult to gain an overview of total costs. 

In addition, the procurement function had to strike a balance between cost optimisation and sustainability, whilst also ensuring that the company remained competitive.  

But how do you consolidate a supplier base and generate savings when you cannot always simply choose the cheapest solution?  

The company found its answer through a spend cube – Basico's tool for gaining full visibility of all facility management costs at invoice and supplier level, with the necessary level of detail.   

Through the spend cube, the company gained, for the first time, a complete overview of facility management costs at invoice level, broken down across all 17 locations. Supplemented by site visits and a review of existing framework agreements, the analysis identified an annual optimisation potential of between DKK 5.1 million and DKK 9.9 million. 

A key requirement was that the optimisation should support the company's CSR strategy and ambitions. A supplier evaluation was therefore included in the scope of work, in which the company developed a risk assessment covering social, ethical and environmental matters, as well as pricing – and we also ensured that suppliers had proper oversight of their own subcontractors.  

In addition, we established central framework agreements for the largest items in the company's facility management budget and standardised its facility management processes, with a focus on both cost efficiency and quality standards.  

The company now uses the spend cube analysis as a guide for determining which focus areas to prioritise going forward – as it is significantly more effective to have a data-driven foundation than to base priorities on gut instinct.  

A retail group with over 500 locations in Denmark was keen to explore whether anything could be optimised – ideally without compromising on quality.  

The company therefore approached Basico for a thorough analysis of its optimisation potential. As part of the deliverable, the company also received a facility management spend cube, providing a detailed overview of all costs and processes.  

The result was that, as early as the initial preliminary analyses, Basico identified a future annual savings potential of a minimum of DKK 11-15 million. The company consequently expanded the scope of the optimisation efforts to cover additional parts of the group, after which Basico's analyses identified total annual savings with a bottom-line impact of more than DKK 20 million.  

The optimisation included, among other things:  

One of the most critical areas for the company is cleaning, as it is essential to the customer experience – and thereby the company's revenue – that customers are greeted by clean food retail stores. Cleaning therefore became an area of particular focus during the process.   

By insourcing more cleaning tasks whilst simultaneously challenging existing cleaning suppliers, the company was able to raise cleaning standards across its chains whilst also reducing overall cleaning expenditure. In addition, the analysis identified optimisation potential in entering into multiple strategic agreements rather than a single agreement with one supplier covering everything.  

The overall scope of the project included:  

An IT company had already taken the first steps towards professional facility management governance, but needed fresh eyes on the area. The objective was clear: 15% in savings – but not at the expense of service levels or employee satisfaction. 

Yet even though they had already begun optimising their facility management function independently, the organisation was characterised by complex processes, numerous suppliers with overlapping responsibilities and extensive – but not necessarily value-creating – quality monitoring systems. 

In an optimisation project of this scale, having a systematic and detail-oriented approach to identifying savings opportunities is absolutely essential.  

The first step was therefore to review all of the company's supplier agreements and work processes in meticulous detail, observing workflows and interviewing employees to gain insight into the optimisation opportunities.  

All elements of the analysis resulted in three major optimisation potentials:  

We ran tenders for both Soft FM and Hard FM and entered into scalable service agreements with a focus on continuous optimisation, ensuring the company not only maintains, but also increases its savings going forward.  

The result was more satisfied employees and a far more constructive and progressive collaboration with suppliers, combined with realised and ongoing annual savings of 17.5% of the total facility management budget – and notably without any deterioration in service or quality.  

For a growing IT services group, the challenge was different, but no less pressing:   

The facility management function was primarily run by 17 in-house employees covering canteen services, meeting catering, cleaning, internal services and reception – tasks that were not part of the company's core business, and which the company therefore wished to outsource.  

With growing revenue and expansion into other Nordic countries, it became clear that resources were better spent on business development than on facility management oversight.   

The decision to outsource was therefore a strategic one: to find a partner for whom facility management is the core specialism, allowing management to concentrate on business development and client relations.  

But a successful outsourcing requires a solid foundation. Through a structured tender process – in which service specifications, baseline and contract were prepared in detail in advance – the company achieved:  

There are quantifiable savings waiting to be realised – but only if you dare to challenge the status quo with a systematic, data-driven approach.