Failing to prepare is preparing to fail, as they say. Or better still, a dream without a plan is just a wish – and if our wish is to enhance the lives of students, as well as the local economy, we can’t have one without the other.
When we think about this in the context of universities, we might be extending our property portfolio to a range of buildings:
- Student accommodation
- Lecture halls
- Sports facilities
- Retail outlets or coffee shops
Each of these will have their own lease management agreements, and their own business cases for capital project planning.
So, why is capital planning important to universities in Australasia?
Capital planning and project management: an overview
In simple terms, capital planning is the presentation of a business case and the subsequent project management for a construction or development project. As facilities managers at universities, we first need to convince the relevant stakeholders that the development is worth the investment.
Some examples of developments may include:
- Building or redesigning existing space to get better value out of it, for example, achieving full occupancy from tenants at all times.
- Investments in sustainability or more energy efficient alternatives to help save costs in the long term, such as switching to a renewable supplier.
- Historic restoration to preserve the wide-scale appeal of a university building, for example, if an institution is well-known for on-site landmarks.
In every case, we need to showcase the benefits of the developments, whether that’s student wellbeing, enhanced economic recovery, improved health and safety, better legal compliance, or simply saving money.
This is where capital planning comes in – and specifically, how capital planning and project management software can help.
Why capital planning is so important for universities in Australasia
From changing economic climates to a profound need for data, capital planning projects have never been more important for educational facilities in Australasia.
1. Universities have a direct impact on the prosperity of Australasia in general.
In 2015, Deloitte produced a comprehensive report on the positive impact that universities can have on the Australian economy. Specifically, the report noted the following key findings:
Universities make “significant contributions” to Australia’s economic output.
At the time of writing, Australia’s university sector employed over 120,000 staff, educating more than 1 million students. High education contributed $25 billion to the economy, offering a worthwhile business case for further capital planning projects on universities.
University sectors are associated with “stronger economies and higher standards of living”.
To improve the general quality of life in local areas of Australasia, we need a thriving higher education sector – supporting employment in higher income roles.
University education increases living standards by increasing productivity.
Studies show that university graduates achieve higher labour force outcomes, with university education adding $140 billion to Australia’s GDP in 2014. Once again, we need thriving facilities to support this overall development.
University research drives innovation and economic growth.
By investing in better resources for students and teachers, we can contribute more to general local entrepreneurialism. University research, for example, contributes around 10% of all Australian GDP.
Universities contribute to society through community service activities.
By involving all stakeholders from staff to students and even the facilities themselves, universities help to build community spaces and run cultural events.
The role of the university sector is expanding and evolving with the global economy.
Disruptive factors such as changing technology are evolving the higher education sector, putting more pressure on capital planning projects to find the right investment.
2. Data-driven capital planning can help universities achieve their goals.
With a strong, data-driven business case, university facilities managers can allay the common problems that inhibit the development of capital planning projects. These problems may stem from many different sources, for example:
Inter-departmental tensions may slow the application process.
If one university department feels that they have been unfairly treated while another department is allocated funding, this could slow down project planning. By having a comprehensive data dashboard, facilities managers can provide an evidence-based business case and prevent any conflict.
There may be a lack of accountability due to the number of stakeholders.
With universities, there are many more stakeholders to consider than other capital planning projects. Not only do we have the construction teams, project managers, engineers and health and safety managers; we also have teachers, parents, and students.
Without the proper capital planning software, this could lead to a lack of accountability. Using the right tools helps to assign roles to every person and every stage of the process, maintaining a culture of transparency and efficiency.
External stakeholders may make requests for information.
As above, there are many more stakeholders to satisfy than those working on the project alone. As such, facilities managers may have to deal with more RFIs. By using a completely digitised capital planning system, they can respond to these enquiries individually and only provide access to the relevant information.
3. Changing legislation and general socioeconomic factors are making the capital planning process more difficult.
A 2018 report into the Australian education sector highlighted the concerns over Federal Government funding reforms. The report also called into question the market for international students – how it is becoming more competitive, and what we can do as facilities managers to make sure we are hitting that target market.
With capital funding projects outside the higher education sector, the process is relatively simple. Investors need to see that their funds will break even or even provide a return. Basically, investors need to see that the funds they deliver will add value over time.
This is more challenging for the higher education sector in Australasia as we’re dealing with not-for-profit entities. We need to factor in the associate risk of investment and the opportunity cost of carrying it out.
As such, capital planning and project management software can help facilities managers by:
- Identifying the best methodologies for higher education financial analysis
- Assessing and quantifying risk
- Calculating the relevant financial metrics
- Valuing the minimum rate of return for the capital investment
- Performing sensitivity analyses
We can use this software for both types of value-adding projects: upgrading existing capital items, such as investing in classroom technology, or starting new ones – such as building university accommodation.
4. We need additional qualitative data to support our business case.
It’s one thing to present investors with the facts and figures around a new development. For example, we might look at the economic benefits such as contribution to GDP, local employment figures or investments in innovation.
But we also need to look at qualitative data – focusing on more than the numbers. For example, we can use capital planning and project management software to:
- Identify how urgent the need is for the new development, drawing on feedback from relevant stakeholders such as the university board.
- Plan marketing campaigns to showcase the new development and bring in new revenue sources to guarantee a return on investment.
- Discover more potential donors through personal connections, gleaning feedback from investors such as parents of other members of the local community
Essentially, we can use software to help us create a feasibility study. While it’s great to have figures on the local economy, sustainability, or general return on investment, we also need to look at the overall wellbeing of stakeholders. We can present all of this by combining information silos in one simple dashboard.
How capital planning and project management software can help universities
Beyond the feasibility studies and presentation to investors, AssetWorks’ software can help university facility managers as they get their projects off the ground. For example:
- Multiple properties in one portfolio are all available to see in one unified platform.
- Funding coming from several sources can be grouped together to demonstrate how it is supporting the project.
- Systems can be integrated to keep relevant stakeholders in the loop and work with general business planning – for example, facilities managers can combine capital planning software with their own Enterprise Resource Planning software.
- Operations can be integrated with project planning, helping stakeholders to see the benefits in the long term, from developing new sites to making use of existing space.
Key features of AssetWorks’ capital planning software
The benefit of using software to help with capital planning is that it automates tasks. Strategic decisions based on hours of analysis can be streamlined, using machine-based learning and historic data to present a business case.
What’s more, AssetWorks’ software is also fully compliant with the latest rules and regulations in Australasia, for example:
- Building Information Modelling support is available.
- All date is presented in a COBie2 data format.
- Facility Condition Assessment integration comes as standard.
- There is ongoing support available for Energy Conservation Management.
- Key performance indicators are identified, and goals are managed more easily
We can see from the above mentioned studies that enhancing the university sector in Australasia can only serve to make the region more prosperous. To find out more about our capital planning software, contact AssetWorks.