Multi-site facilities leaders are under pressure from both sides. Customer expectations are rising, while Direct Store Operating Expense (DSOE) continues to climb. Over the past two years, DSOE increased 12.7%, with repairs and maintenance up 17.3%.
Most organizations are overspending 10-15% on their facilities programs.
The issue is not hourly labor rates. It is hidden leakage across callbacks, duplicate work orders, invoice overcharges, ineffective preventive maintenance, and outlier sites.
Use the TCO calculator below to quantify that leakage and model your true Total Cost of Ownership opportunity.
What Is Total Cost of Ownership in Facilities
Total Cost of Ownership, or TCO, includes every cost tied to asset performance across its lifecycle. That means:
- Labor
- Parts and materials
- Trip charges
- Repeat visits
- Energy consumption
- Asset downtime
- Premature replacement
Making decisions based on labor rate alone is insufficient. In fact, higher hourly rates often result in lower total invoice cost when first-time fix, labor duration, and parts accuracy are controlled.
A TCO calculator shifts the conversation from rate negotiation to outcome management.
The calculator above quantifies five common drivers of facilities overspend:
- Reactive leakage
- Models avoidable spend from callbacks and duplicate work orders. - Invoice overcharges
- Applies conservative assumptions to materials and labor expansion that often go unchallenged. - Preventive maintenance impact
- Estimates repair reduction and energy savings tied to consistent, quality PM execution. - Outlier site concentration
- Calculates the disproportionate impact of high-cost locations on portfolio spend. - Portfolio-level ROI
- Calculates the disproportionate impact of high-cost locations on portfolio spend.
These are not theoretical assumptions. They are patterns repeatedly observed across large, distributed portfolios.
Sample Portfolio Output
ROI Percentage:
(Total Savings − Program Investment) ÷ Program Investment
Most multi-site portfolios modeled conservatively land between 8-15% total reactive savings when applying structured controls and performance management.
How Facilities Leaders Should Use This Calculator
This calculator is not just a budgeting exercise. It is a strategic planning tool.
Use it to:
- Quantify overspend before renewal cycles
- Justify investment in audit and preventive programs
- Build a business case for consolidating vendors
- Support capital reinvestment decisions
When maintenance spend is rising faster than revenue, incremental rate negotiation will not close the gap. Structured TCO management will.
Frequently Asked Questions
What is Total Cost of Ownership in facilities management?
Total Cost of Ownership includes all lifecycle costs of maintaining assets, including labor, parts, travel, repeat work, downtime, energy impact, and asset longevity. It goes beyond hourly rates.
How much can preventive maintenance reduce repair costs?
Portfolio data shows 35-60% reduction in repair volume when preventive maintenance is executed with quality and accountability. Energy savings of 12-16% are also common for HVAC systems.
Why do multi-site portfolios overspend on maintenance?
Primary drivers include callbacks, duplicate work orders, invoice overcharges, lack of root cause correction, unmanaged outlier sites, and rate-focused procurement decisions.
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