The CNA program provides a mechanism to track institutional changes to prioritize and maximize capital dollars on a regular basis. It also serves as a leadership model for making long-term decisions about facilities according to predetermined criteria, extinguishing departmental rivalries with the commitment to "do the right thing" throughout an institutional network that extends beyond the University's Provo, Utah, campus to sites in Idaho, Hawaii, London, and Jerusalem.

"Our vision statement is 'To be a trusted partner in managing a learning environment standard,'" says Doug Christensen, director of BYU's CNA Center. "We want to insure that our long-term investments in assets are appropriate, needed, and aligned with that vision."

Oriented Towards Needs, Not Dollars

The CNA framework was born back in 1981, amid what Christensen describes as :a culture of competition, compromise, and confusion." At that time, facility managers were often seen as owning the buildings rather than serving those who occupied them, and priorities were driven more by immediate needs than by plans for the future. BYU trustees, presented with recapitalization budgets that gyrated widely from year to year, asked for a solution to make annual spending more predictable.

The request caused a shift in focus from concern about how much money was being spent to a new emphasis on making sound asset management decisions.

"Our goal was to be needs oriented, rather than dollar oriented," says Christensen.

Embarking on this new path prompted the facilities organization to reinvent itself, sparking a review of its core competencies; a redefinition of its vision, principles, and values; and closer relationships with stakeholders. Tighter alignment with the trustees' perspective and mission was an especially important aspect of the renewal effort.

As part of the trustee mandate, the facilities organization was tasked to meet the following criteria, activities that the CNA Center continues to perform today:
• separate capital and operating funds,
• establish a 40-year average spending target,
• set an annual capital-funding limit,
• compile a line-item list of verifiable capital replacements,
• prioritize all institutional capital needs,
• project space needs based on a total utilization of existing square footage,
• define comprehensive replacement standards for everything from roofs and utilities systems to carpet, and
• develop an ongoing program of maintaining assets.

Becoming a Learning Organization

As part of its own internal review, BYU's facilities organization ultimately determined that the best asset management system looked at total cost, encompassing both operations and capital spending. Adopting a cradle-to-grave asset management approach, CNA built a database accommodating the institution's full complement of capital assets, from buildings to systems to individual components. Tracking to this level of detail provides an effective way of managing a massive number of items, all with different life spans and repair histories, while taking into account plans that might affect their future utility.

When the database was originally established, Christensen recalls, little information was available about the expected life span of equipment, and manufacturers' standards tended to be conservative underestimates. Twenty-plus years of record keeping have produced a much more accurate view of asset conditions. The systematic collection of data has thus allowed CNA to become a learning organization

"The existing organization was an information system more than a knowledge-, understanding-, or wisdom-based system," he says. "We were gathering a lot of data, which we studied to make short-term decisions, but that wasn't really getting us the results we wanted. Now that we have complete maintenance histories, we can assess proposed renovations in light of the realistic direction of the whole system."

The "bottom-up" input of those most familiar with the physical assets plays a significant role in both the learning and decision-making processes.

"We realized that the people maintaining and operating our systems know their condition best," says Christensen. "They could make decisions on the need for outside service or define where an item was in its life cycle, helping us with retrofits and renewal issues."

While software products have changed substantially over time, the original CNA database continues to function without much modification.

"We built the database for each institution in approximately four months in 1981," says Christensen. "We were fortunate because we had dedicated people who knew conceptually how the program should run. Programmers took an off-the-shelf database product running on the PICK operating system, which was easily ported later to a UNIX platform to keep us updated and compatible. Doing the same migration with today's software would be more challenging."

Useful Life, Not Life Cycle

CNA activity takes place against a backdrop of controlled capacity. While BYU is still growing, enrollment is stable, and a 30,000 FTE cap has been imposed on the number of students in Provo, with limits at other sites as well.

"Most early changes in asset function occur in the science areas and in adapting new teaching methods, not so much in our student numbers," says Christensen. "We have a limit on additional square footage, and current utilization must be thoroughly investigated before any additional space is justified."

In this context, maximizing facilities investments becomes even more significant, leading CNA to make decisions according to an asset's useful life, a more realistic technique than the commonly accepted life-cycle basis, Christensen points out.

"Useful life answers the question of how long something fits into the environment," he explains. "We've never worn out computers, but we've replaced a lot of them."

Each system or asset has its own way of being evaluated. For instance, as a building's electrical system reaches capacity, CNA will explore not just the options of adding another line or replacing the old one with a heavier feed, but also whether other factors might come into play.

"If the environment shifts completely, for example, developing the need for clean or uninterruptible power, then you have to ask if the asset's useful life has been shortened," he says. "We use the life-cycle concept to predict where we are going, but we rely on useful life to determine when and if the system or component needs to be upgraded or replaced."

No "Use It or Lose It"

A key to customer acceptance of the CNA approach is its asset resource plan, which, unlike many other institutional budgets, maintains needs funding even if the money is not spent on schedule. The 40-year cash flow forecast projects out far enough into the future to cover replacement to all buildings, utility distribution systems, and general site components.

"It's a closed loop concept," says Christensen, meaning that even if a need is deferred— because the need has remaining life— will not lose its funding.

For instance, suppose $2 million of work is scheduled for a particular building one year. The annual inspection might show that only $1.5 million of need is necessary at the time, so the remaining $500,000 is pushed into the future, not deleted from future cash flow projections, with the assurance that it will be available the following year, or when needed.

"We save the deferred needs value in reserves, which eliminates the idea of a penalty for not spending all the money by stretching the life cycle," says Christensen. "The incentive is that the money will be there when it's needed. Every year we conduct inspections so we can defer as much as possible to maximize useful life without jeopardizing the future reliability of the asset."

This "protection" is possible because CNA has a special arrangement with the campus trustees to receive funds directly. The agreement also stipulates that new assets will not be added unless trustees identify funds for both operating expenses and capital renewal.

Balanced Scorecard

CNA has adopted a balanced scorecard as a tool to help evaluate the effectiveness of its own operations. The scorecard identifies and rates activities in four specific areas: financial performance, internal business process, innovation and learning, and customer perspective.

The last category was judged especially important in view of the program objective to emphasize needs over money.

"We spend a lot of time with customers to get their input and understand what they need," says Christensen. "To be a quality organization, we felt that we really needed to have that balance."

Needs Separated From Resources

CNA's needs orientation has led BYU to a resolution of the perennial facilities question about what standards the organization can afford to support. Guided by the principles of good stewardship, CNA directs its efforts according to the priority needs expressed by customers and stakeholders.

"Most of the asset management groups we've been involved with worry more about money than about how to manage asset needs," says Christensen. "Our focus is on needs. Users, customers, operators, and maintenance personnel are the ones who know the needs of the building, and we make them a part of what we're doing."

The upshot is that funding virtually takes care of itself.

"We separated needs from resources, essentially choosing to manage CNA without a funding constraint," he continues. "We let the funding need happen as a consequence of the data and information coming out of our database. Our idea was that if the needs were important enough, the resources would be available. Since starting the program, that has really been the case," Christensen concludes.

By Nicole Stahl