Expecting the unexpected: Being prepared with facilities data

"Over the past year, since the string of natural disasters that affected organizations across the globe, many have revisited what constitutes best practice in disaster planning and risk mitigation.
Recent events are a strong reminder that every organization - from government agencies to corporations - need to have disaster plans in place and be able to execute them well. And although effective plans involve a wide variety of functions within an organization, facilities managers and planners are often on the front lines of this issue.


Regardless of the nature of the crisis, whether it is a major hurricane, minor flood or a power outage, accurate, detailed information about an organization's facilities, their major systems, and functional uses is the foundation for making optimal decisions about how to redeploy resources and rapidly resume operations. This data forms the basis for establishing an effective in-case-of-emergency plan.


Organizations should at a minimum document the condition and replacement value of each building structure and its vital organs, such as the main fire, natural gas and domestic water valves, emergency generators, elevators, chillers, alternate portable water sources, and underground storage tanks. Other critical data includes access control information and equipment shutdown procedures. Organizations may also consider maintaining a detailed inventory of equipment and furnishings, which can not only enable them to better prepare a facility for operation after a disaster strikes, but also provide detailed documentation to support insurance claims.


Many organizations also are beginning to evaluate resistance factors for each facility. Depending on a facility's location, such factors may be calculated based on the ability of a facility to withstand excessive winds, the capacity of storm systems to accommodate heavy rains, or the ability of structural systems to support massive snow loads caused by blizzards. The standards for these factors will be developed over time, but eventually will create a metric from which facilities can be compared.


Based on assessment results, organizations can take short-term steps to mitigate potential business interruption by adding emergency generators, moving switchgear and other critical electrical and mechanical items to higher floors, and reinforcing building shells. In Miami, for example, a hospital added a fiberglass skin reinforced with concrete to its 1986 structure to help the building withstand the 178 mph winds of a category four hurricane.


Evaluating risk


Capital improvements targeted at enhancing disaster preparedness are often costly, and outside the scope of existing capital plans. For example, the American Hospital Association reports that the cost of an improvement specifically related to disaster preparedness is $2.93 million on average, but can run much higher. While these types of improvements may reduce damage in future hurricanes, they will not protect against other disasters. This illustrates a common misdirection in some organization's disaster plans. They anticipate and plan to meet a disaster very similar to the one they just endured. But all disasters, even those of the same type, do not follow the same script and do not require the same response action.


It is not possible, either financially or physically, to prepare for all possibilities. Therefore, risk analysis is an important component of disaster preparedness, balancing the probability of an event with its severity and impact. Organizations with a holistic picture of their facility portfolio are best positioned to project the impact of various disaster scenarios on future capital plans and to weigh various response alternatives. Again, comprehensive facilities data is the foundation for such a capability.

Data from anywhere, anytime


While disasters may strike without warning, there is often some forewarning, however brief, that can provide time to react to minimize resulting damage to life or property. While this was the case for last years' hurricanes in the Gulf region, different organizations'
reaction and response varied dramatically. Those with current and accurate information about their facilities were among the best prepared to take action to ensure business continuity.


For example, prior to Hurricane Katrina's landfall, a manufacturer located in New Orleans was able to analyze its facilities data to pinpoint its most vulnerable facilities based on their specific location and construction type. A crosscheck of the functions performed in these facilities highlighted a risk to the central payroll operations. The company was able to quickly identify an appropriate, underutilized site within its portfolio to relocate its headquarters operations and was able to execute the transfer of operations of critical functions prior to onset of the hurricane. As a result, paychecks to its employees across the country were issued without interruption.


Of course, good facility information is only valuable if access to the data is not affected by the disaster. In the past, a comprehensive and well-organized plan room was considered a best-in-class approach to supporting the operations team in its disaster response. However, if such a plan room is in the path of the disaster and suffers damage, the organization's ability to respond effectively can be significantly impaired and the loss of data can be crippling. Today, best practices dictate that this information be stored electronically in multiple locations to minimize the impact of a single event.


Assessing the damage


In the wake of a major disaster, damage assessment can be a particular challenge for organizations with dozens or even hundreds of affected properties. Those with well-documented information about pre-disaster facility condition are much more readily able to pinpoint those facilities that are at greatest risk of damage and determine how to prioritize the assessment process.


In some cases, damage to structural integrity or specific building systems may not be obvious. Following up on the initial triage analysis with professional assessments of specific facilities or systems can enable organizations to respond quickly and cost effectively to initial assessment needs, while developing accurate estimates of repair costs.


An organization's pre-existing assessment data can be used to make initial assessments much more efficient. For example, resistance factors can be used to predict damage levels associated with a disaster before anyone returns to a facility. This data can be used as a metric to predict the location of areas of greatest damage, and which facilities should be rebuilt rather than repaired.


Managing the recovery effort


Once initial contingency plans have been executed, and a return to at least skeletal operations is complete, the longer task of reconstruction must begin. In the case of Hurricane Katrina, the most common types of damage sustained included power outages, water intrusion, power distribution equipment damage, structural damage, mold build-up, broken windows, and major roof damage and leaks. Based on the extent of damage, corporations can expect to spend between 50 and 100 percent of an asset's replacement value to cover major repairs to full replacements. Organizations often choose to upgrade these systems in the course of repair or replacement.


Businesses that have comprehensive facility data management systems have an advantage in reconstruction as well. They more readily can make well-informed remediation decisions quickly, which often come down to a decision to repair or to rebuild. A facility with a pre-existing condition index at the high end of the scale, for example, will be a likely candidate for rebuilding rather than repairing.


Quick remediation decisions can help companies stay ahead of the rush for building materials and labor resources, which can become scarce and expensive after a disaster. In the aftermath of the Hurricane Rita, for example, the cost of fuel and raw materials, and the difficulty in transporting goods around the region posed an ongoing challenge. The longer an organization takes to determine the scope of necessary projects and to schedule them, the more likely they will face higher costs for labor and materials, as well as a longer timeline for project completion. Arranging for contracts with service contractors prior to the emergency allows for the up-front negotiation of costs and service terms.


Building it better than before


As the rebuilding effort proceeds, the lessons learned over the past year are leading many organizations to implement upgrades to existing facilities to better protect them against severe storm damage, and to more carefully consider disaster preparedness when undertaking new construction. Realistically weighing the risks and benefits of such upgrades is important to making decisions about how to allocate limited resources most effectively. There are a wide variety of factors that organizations need to consider in such an analysis, including:


* The mission criticality of the facility
* How tailored the facility is to its specific function
* The current facility condition index (FCI)
* The current resistance factors of the facility
By creating a standard set of factors that are evaluated in making decisions about upgrades related to disaster preparedness—including some that may be very specific to the organization's particular mission and objectives—it can create quantifiable analysis criteria.
Such an approach enables objective decisions about what can be emotional and subjective issues, and helps organizations make investments that will serve them well the next time they face the unexpected.


Consider a centralized system for facilities data


Having facilities data that is accurate and complete, and contained in a centralized system that provides the ability to both conduct what if scenario analysis and create project plans is critical to creating a timely recovery plan for several reasons:


The organization can more readily identify those facilities that are at greatest risk of damage prior to the disaster, and begin remediation actions.


Following the disaster, it can better prioritize the assessment effort.


Armed with the data and analysis it needs for quick remediation decisions, it can be first in line for hard-to-come-by construction staff for the rebuilding effort (as well as ahead of the curve as construction materials costs rise).


It will have hard data on which to base requests for funding for repair work from within the organization or from an insurance company, rather than relying on formulas or industry standards that may significantly underestimate actual costs."


Consider a centralized system for facilities data


Having facilities data that is accurate and complete, and contained in a centralized system that provides the ability to both conduct what if scenario analysis and create project plans is critical to creating a timely recovery plan for several reasons:
* The organization can more readily identify those facilities that are at greatest risk of damage prior to the disaster, and begin remediation actions.
* Following the disaster, it can better prioritize the assessment effort.
* Armed with the data and analysis it needs for quick remediation decisions, it can be first in line for hard-to-come-by construction staff for the rebuilding effort (as well as ahead of the curve as construction materials costs rise).
* It will have hard data on which to base requests for funding for repair work from within the organization or from an insurance company, rather than relying on formulas or industry standards that may significantly underestimate actual costs." For more information see: www.houstonrealtyadvisors.com or www.houstonrealtyadvisors.net