While CAFM (and IWMS) systems are useful tools for managing office portfolios, they lack the capability to report on actual space utilization. This flaw is concealed by confusing marketing jargon. They can only report on how much space is ‘occupied’ (ie assigned) but not on how well it is actually used. CRE executives who want to right-size their buildings need a complementary solution with specialized reporting of real-time space utilization of workplaces.
CAFM systems report occupancy numbers and percentages, i.e. the HR assignment of employees to workstations. Occupancy usually changes slowly over time unless there is an event such as a layoff, acquisition, or new project with associated hires. CAFM lacks the ability to capture and report on what is happening in the office in real time. Without real-time data and advanced algorithms and statistical methods, CAFM cannot provide insight into space utilization. CAFM is also not able to track employee mobility and duration of stay in a location through the course of day, both of which impact actual utilization.
To illustrate the importance of analyzing utilization rather than just occupancy for measuring the effective use of the office, consider the following example, illustrated in the chart above:
Building A has a design capacity of 500 people and the company has assigned 400 employees to A. Therefore, a CAFM system will reflect a headcount of 400. Using these numbers, CAFM will divide the headcount (400) by the capacity (500) and show a percentage occupancy (sometimes confusingly called ‘utilization’) of 80%. However, due to increasing employee mobility and dynamically changing portfolios, only 250 employees on average effectively use the office at any given moment. This means that true utilization is equal to the average effective use (250) divided by the capacity (500) – i.e. actual utilization of 50%.
Executives need to be sure they understand the difference between ‘occupancy’ and ‘utilization’ before drawing conclusions from CAFM systems. Using a robust software platform built for tracking utilization in real time is the only way for CRE executives to determine effective utilization and thus right-size buildings and the portfolio.