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How Can Your Business Benefit From Life Cycle Cost Analysis

Aug 10, 2018 by

Being an owner of a property, regardless of its size, involves a lot of responsibilities and challenges as well. One of the biggest of such challenges includes making predictions about the costs related to different operations and maintenance, and, naturally, covering these expenses.

When you don’t have an ability to get a clear insight into all of the expenses related to your property, you might be unpleasantly surprised by some unexpected costs which will negatively affect your project in many ways in the long run.

That is why property owners are advised to analyze life cycle costs before they make a decision to invest their money in some building or any other kind of property.

Luckily, there is a powerful solution which is designed to help you do that in the most effective way possible – Life Cycle Cost Analysis or LCA for short is a tool which enables you to measure the overall economic sustainability of your assets in an accurate way, in order to determine whether a certain asset should still be kept or rather sold because it brings more expenses than advantages.

You can pay a visit to the Andromeda Systems Incorporated website where you can take a look at their Enterprise Asset Management Software solution called OptiAM.

So, if you are a property owner looking to optimize any property-related processes and make the best decisions possible, keep on reading as we will explain which great benefits a proper LCA tool can bring and make the whole process a lot easier.

The biggest benefits of having an LCA tool

If you have an ability to analyze the life cycle cost of a property, you will experience many benefits, and we will focus on some of the most essential ones that you should take into consideration if you really want your projects to blossom:

  1. You will have more accurate repair and maintenance budgets

Forecasting expenses related to repair and maintenance is pretty much impossible unless you are using the right tools and methods that can provide you with the necessary information.

According to numerous industry experts, you need to always put aside at least 2 to 5 percent of your facility’s annual operating budget for any potential maintenance costs.

With the implementation of an LCA tool, you will have an ability to easily calculate the amount of a budget needed for your specific facility and that way you won’t be surprised by some shockingly high expenses you didn’t have in mind.

      2. You will have a better insight into costs related to your property

Utilizing an LCA tool will help you familiarize yourself with different concepts related to life cycle costs calculation. These concepts might include the following: sunk costs (design fees, for instance), first costs (purchase, investment, and construction costs), future investment, salvage and residual value, energy costs, etc. all of which are essential for making the right decision when it comes to a certain facility.

      3. You will be more efficient when it comes to maintenance scheduling

As we have already mentioned, an LCA tool is designed to provide you with all the valuable information about costs related to a property, as well as about its maintenance.

When such information is available and when it is organized properly, you and your employees will be able to schedule a maintenance in a way that it doesn’t interfere with any other important operations.

What is more, when you have such information at hand, it is easy to determine whether you have all the resources which are necessary for the maintenance process itself.

      4. You will be able to be compliant with the US energy standards

The conservation of energy is being largely promoted these days. In fact, there are even some utility companies in the United States which are offering incentives to the owners who are compliant with these energy-related standards.

Since life cycle costs include the energy costs as well, using an LCA tool will help you be compliant with these standards and receive some incentives.

      5. You will be able to predict various utility costs

Expenses such as utility costs and water costs “behave” in a different way when compared to some other expenses related to your property, and using the appropriate LCA methods, you will get an ability to easily predict such costs as well in order to distribute your budget accordingly.

      6. Increased public safety

It goes without saying that having an insight into all the potential expenses related to some property are very important for the initial project itself, but what is equally important is that the public safety is ensured.

Using the right LCA tool, you will be able to make sure a certain property is completely safe for the residents to stay in.

In conclusion, after taking all the aforementioned benefits into consideration, it becomes clear why life cycle cost analysis is so important. So, if you want to have a better insight into expenses which come with a certain property as well as to make sure everything is going according to the plan, be sure to implement an LCA tool to your project!

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