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The Never Ending Product – Forever Beta

The world is changing from a “product” based goods/service market to a subscription based model.  This trend has been growing exponentially since the mid 2000’s.  In 2018, there are very few things you can not obtain and use from a subscription:

  1. Caterpillar (heavy construction equipment) now offers a service that shifts the discussion from “Products” to “Outcomes” based on the amount of dirt you want to move
  2. Cadillac, Hyundai, Porsche and Volvo all offer subscription programs for a car (This is not a lease)
  3. Stitch Fix – Clothing
  4. Graze – Snack food subscription
  5. My Royal Canin – Dog supplies
  6. Amazon Prime – enough said!
  7. Husqvarna – now offers battery powered tools in Europe on a subscription model
  8. Kanye West – First subscription album, “The Life of Pablo” sold billions of subscriptions
  9. Zipcar- to book the USE of a car and the ownership
  10. The New York Times – now generates more revenue from subscriptions than ads
  11. On and on and on…

The one industry that is most obvious is software.  The majority of what we consume in the form of software (remember your “apps” are just software) is done through a subscription.  But that transition was not as seamless or easy as you might think looking back.  In fact, it took more than a model change…it was a massive philosophical shift.

In his latest book “Subscribed”, Tien Tzuo reminds us of the huge shift the market had to make from obtaining software via a perpetual license and the age of a CD loading on your computer to the current age where most software is subscription based…especially with the age of Cloud computing and SaaS based applications.  Prime examples of this shift includes household names such as Adobe, Microsoft, Symantec and IBM.  Part of this shift is not just to avoid producing a “product” but rather that IT buyers prefer an OPEX vs. CAPEX.  In layman’s terms, organizations…including churches and not-for-profit firms…prefer an “operational expense” (i.e. subscription) in lieu of a “capital expense” (i.e. physical assets whether software or equipment).

As the subscription really started to take off, the term “beta” became common in the industry.  This basically means your software was “almost ready” and they wanted clients to test drive it for final tweaks.  Then, once the input was evaluated and implemented, the software was considered DONE!

That is changing as well!

On page 134 of Subscriber, Tzou conveys a story about Google and how for over 5 years their logo had the word BETA included.  Google received a great deal of pressure from enterprise prospects and Fortune 500 companies that the word BETA was a roadblock for those who wanted to invest in a “beta” product.  So in 2009, Google released a blog post saying it was removing the word from the logo. How ever, what is hilarious, is the last line in the 2009 release:

One more thing – for those who still like the look of “beta”, we’ve made it easy to re-enable the beta label for Gmail from the Labs tab under setting.

Google basically was saying that this little 4 letter word…means NOTHING to them.  This was the birth of the “never-ending product.”  Google and most other growing SaaS based products follow that…never-ending development…never-ending enhancements…never-ending improvements…never-ending listening to clients and prospects needs…always improving and never arriving mindset.

We too, at Cool Solutions Group and eSPACE adhere to this methodology.  We will never “arrive” or be complete with development.  There will always be more that can and should be done to assist organizations in being EFFICIENT, EFFECTIVE and INTENTIONAL with the facilities they are entrusted to steward.

Forever BETA!

The Pain of Change

When our team ventured into the world of church software nearly 10 years ago, we had an almost debilitating revelation. We did not see this one coming:

THE PAIN OF CHANGE! (or maybe better said – the PERCEIVED pain of change)

We assumed (and we all know what that means) that if you had a better solution, people would flock to it. WOW…were we wrong. In fact, we have seen that in many cases, it has taken years for a church to make the shift from an antiquated scheduling software to a system that works better and is usually LESS MONEY.

Or worse…still thinking that paper, pencil and post-it notes are an efficient way to mange a facility when a more intentional application was available for as little as $1.67 per day.

But that is exactly what we found.  10 years later, I am still scratching my head.

There is an adage that says – Change happens when the pain of staying the same is greater than the pain of change.”

So…what is the tipping point for you and your organization?  When is the pain of “staying the same” greater than the pain of change?

My guess is the pain of change is not nearly as painful as you may think.

What Batman Might Say About HVAC Integration

As we shared prior, we believe that the World of Integration is here to stay…especially in the realm of major facility systems, like HVAC.

eSPACE and Cool Solutions Group released its COOLSPACE HVAC Integration over 8 years ago.  At that time, the only option was for churches that had a JACE.  Then we developed integration with several brands of thermostats.

But do you know what?  Those 2 applications only represented a portion of church HVAC controls systems.  Our team has scratched its proverbial head for many years trying to break that nut.  We thought we had it figured out with the new JACE J8000.  It could do what we wanted…but the price point was in the $7-10,000 range.  That seems unreasonable for a simple “handshake” from one system to another. HOLY SMOKES BATMAN!

We then thought we had hit pay dirt with the Lynx Springs Edge 534…but alas…the driver written for the JACE would not work in this device.  CURSES…FOILED AGAIN!

Well, we are pleased to announce that our team, in partnership with North Building Technologies has developed a solution that not only works…but is cost effective! We have developed a “controller” to link the eSPACE Event Scheduler and pull the schedules from the eSPACE API and convert the data to usable BACnet/LON/Modbus schedule objects for occupancy.   BOOM! POW! BAM!

“Everything’s impossible until somebody does it.” – Batman

Well…we DID IT!

Now, if you have a system that can accept BACnet objects, LON or Modbus, eSPACE (and the 13 other ChMS event schedulers) can communicate with your HVAC system and assist with increasing energy and operational efficiency. You do not need a JACE (but if you have one, that is cool too).  You do not have to spend $10,000.  For a fraction of that, you can integrate your HVAC and Event Scheduler!

KA-BOOM!

The Least Expensive Time to Own a Church Facility

Over the years, I have been asked when the least expensive time to “build” a church facility…and 9 times out of 10, the answer is TODAY. The only exceptions to this have been when there was a recession like in 2008-2010.

Today, I want us to change the question and shift if from when to BUILD a facility to the least expensive time to OWN a church facility.

Strangely enough…the answer is nearly the same. The answer to the latter may not be “today” but it is definitely the day you finish construction and move in. Does that sound counter intuitive? Do you think I’ve completely lost it (you may be right in general, but not on this point)?

We have laid this out several times in the past in articles and blogs…but I am concerned that many church leaders still do not grasp this. Because our firm works on both the BUILD and OWN (what we call Sustain) spectrum, we see the miscalculations of church leaders that fail to plan for the long-term costs to operate their shiny new facility…as well as the nearly devastating results of churches that have been in their facilities for years with little to no planning for the inevitable.

Let me see if I can offer a simple example:

  1. Cost of new building = $4 Million (about 20,000 SF)
  2. First-year utilities – about $25,000 ($1.25/SF – the acceptable range for a church is $1.00 -$1.50/SF)
  3. First-year Janitorial, cleaning and paper products – $35,000 ($1.75/SF…which is the low side of average…but hey, the building is new)
  4. First year General Maintenance…you know…light bulbs, touch up paint, HVAC maintenance, clogged toilets, broken glass, etc – $40,000 – $2.00/SF…which is less than the national average of $2.50 – $3.50…but again, I am being gracious because the building is new.
  5. First-year Lawn/Grounds – $25,000 (assuming 5 developed acres)
  6. First-year Capital Reserve Contribution – $30,000 (the recommended range is $1-3/SF annually…so I picked middle ground)

TOTAL COST TO OWN THE BUILDING AFTER 12 MONTHS = $4,155,000.00.

That is a 4% increase over the initial cost to build.  So, let’s assume a 2 % inflation from year 1 to year 2, which makes the cost to operate the second year $158,100. So now, at the end of 24 months, my $4M building, costs $4,313,100 to own…which is about 8% above the initial cost to build.  And that does NOT even include the cost of:

  1. Interest on a mortgage
  2. Insurance
  3. Telephone
  4. Internet
  5. Security
  6. IT infrastructure
  7. Facility Management…the PROACTIVE part…not the nail driver/mop-slinger.

I am sure that some of you are saying, “why do we need a capital reserve account starting in year one?” There are several reasons:

  1. If you don’t get into the habit of doing it early, you are less likely to EVER do it.
  2. Systematic saving is done over a long period of time which means you need less incrementally as you have a long time to grow the funds.
  3. You WILL replace all HVAC…all the carpet…all the paving…all the roofing…etc. These are inevitable.  It is not a question of IF you will replace them, but rather WHEN and HOW MUCH. Just think of the big-ticket items such as:
    • HVAC – This size facility will have 110-120 tons of HVAC at a current value of $275 – 300,000. You will need money in 15-20 years to pay for new… at an inflation ration of 2+% a year, you will need $350-$400,000.
    • If you have 20,000 SF of flat roof, the value today is about $160-200,000 and it will need to be replaced in 15-20 years…at an inflated value…this could be $210-280,000.
    • If 50% of your facility has carpet at a value of $4.00/SF today, ($40,000) that will need to be replaced in 7-12 years at an inflated value.

Need I continue?

It costs more money to own and operate a church facility than to just build it.  Be Intentional.

You Cannot Do It All

You can be great at a small number of things or mediocre at a great many things. Unfortunately, in the church world, we expect our facility teams to be subject matter experts on a great many different things. As a result, we are getting mediocre results in several areas.

This is not a comment on the ability of the facility team, or on the demands from the church administration. Rather, it is an observation that there is a point in time where the benefit of bringing in outside experts is more profitable in the long term than trying to handle it in-house.

We readily see the benefit in certain “church” processes of seeking outside help (think church vision casting for example). When it comes to the facility, it becomes a much harder sell. There is this weird assumption that the paid facility staff should be able to handle everything. While I feel that facility teams accomplish a great deal more than folks realize, even I can admit that there are things that they simply should not be doing.

Therein lies one of the issues when it comes to outsourcing. What makes sense for one facility to outsource may not make sense for another. Each staff and church is unique in what they need assistance in managing. Some need help cleaning, some in maintenance, yet others only in project work. Determining where you need to outsource starts with making a realistic assessment as to what you and your team can accomplish with excellence. And it is not just executing a task with excellence once; it is what can you consistently perform well no matter the current operational pace.  Once you identify those areas, you can determine what areas are best to outsource.

What do you do then?

Before you start calling around and getting recommendations, you need to consider what results you want to see. It’s best to go into the outsourcing process with an understanding of what acceptable looks like to you. Be prepared to articulate that (in word and in writing) to the companies you are considering. The more you can define your needs, the better the company will be able to propose a scope and level of work that is appropriate. Effective and intentional communication is required if you want to have a successful experience.

What should we consider next?

For you, you should consider attending the free Church Facility Management Webinar on August 23rd. We will go to details on outsourcing, what to consider, what to ask for, and a great deal more. Navigate on over to www.cfms.cool and check us out, or click here to reserve your spot today.  Let us help you develop and understand how to leverage outsourcing as you work to steward your facility effectively.

 

Smart Money For Church Salaries

We are going to take a slight deviation from our typical “facility” topics and shift to a financial and HR related topic.

Over the last 5-7 years, we have developed a relationship with David Fletcher, founder of XPastor. Their organization is one of the forerunners in supporting, developing and coaching Executive Pastors.  I have great respect for David and his team and am honored that they are also a Ministry Partner with Church Facility Management Solutions (If you have not signed up yet…do so NOW…it is FREE).

Well…XPastor is partnering with some of my favorite people including Dan Busby, Brad Leeper, Vonna Laue, William Vanderbloemen and Michael Martin to do a series of workshops around the country focusing on compensation and salaries.

I am butchering what they are really going to address, so let’s hear directly from David.

___________________________________________________________________________________

Over the past several weeks I have heard from Executive Pastors, Insurance Agencies, and Elder Boards from across the country about their current Sr. Pastor’s pending retirement. For most of them, their Sr. Pastor is part of the Boomer generation and is roughly 60 years old. However, although many of the soon-to-be-retirees have projects they would like to retire to (ie – overseas mission work, consulting, community involvement), they don’t have the resources to retire from their current position. In other words, they didn’t save the money necessary for the move. This is causing Sr. Pastors to stay on longer than they should and preventing churches from moving into the future.

This is a common scenario, and it often times takes two to tango. The problem with Boomer pastors’ ill-prepared retirement is often times the result of poor compensation on the churches end and poor planning on the employees end. At our 12-city one-day workshop “Smart Money for Church Salaries,” we want to address the former. We want to make sure your pastors are being payed fairly, competitively, and legally for the area of ministry (and country!) they are in. This will help a church to communicate value, dignity, and respect to the pastor during the time they are with your church.

At this 12-city, one-day workshop, paid and volunteer leadership teams will walk out of the workshop having crafted a customized, scalable compensation chart for their own unique church. This is a conference you do not want your teams to miss!

By the way, did we mention it’s only a one-day workshop?!

Full price for this workshop is $239 but for a LIMITED TIME you can register you and your team for $159 using the code “XP” at checkout! Access this exclusive discount NOW at this link → http://bit.ly/XPastorLI

Cheap Shower Curtains (and church facilities)

If you have read my blogs for just about any time at all, you know that I am a big Seth Godin fan.

Recently he posted a blog entitled “Cheap Shower Curtains” that really caught my attention. Here is an excerpt:

The unskilled cost accountant might suggest you outfit your new hotel with cheap shower curtains. After all, if you save $50 a room and have 200 rooms, pretty soon, we’re talking real money.

On the other hand, experience will demonstrate that cheap shower curtains let the water out, causing a minor flood, every day, room after room. And they wear out faster. Cheap shower curtains aren’t actually cheap.

This is so in line with one of our recent blogs – “Cheap Is No Bargain”

Let’s take the analogy above a little further:

PERCEIVED SAVINGS: – $50 x 200 rooms = $10,000

AFTERMATH COSTS:

  • Damage to the floor and substrate of 200 rooms
  • Ceiling damage from water leaking from rooms above – about 75% of the 200 rooms requiring patch and repaint
  • Potential unseen issues such as mold, wet insulation, water migration to electrical fixtures, etc.
  • Increased humidity issues due to moisture causing HVAC to work “harder” to obtain comfortable levels
  • Replacement of floor covering to all 200 rooms
  • Loss of revenue due to repairs being made
  • Truncated life cycle of 200 shower curtains (this will be at least the cost of the original savings but at inflated dollars)

I am not going to venture a cost for the above…but I would say it is fair that it will be at least 10 times (and I actually believe it is 25-50 times) the perceived savings. So, unless your intent was to sell the hotel within the first few months of completion, you have just made an incredibly unwise decision. BY THE WAY: If you did plan to sell, you just sold a money pit to your buyer, damaging the one thing that really counts…your integrity and reputation. Another unwise decision.

“But Tim…we are not building hotels…we are a church.”

Right…all the more reason to not make such unwise decisions as you are utilizing Kingdom dollars entrusted to you and your church. You have been asked to steward them…not just on the “spending” of the initial costs/purchases, but of the long term value. The principle is the same whether you are building hotels, shopping centers or investing monies into the construction, renovation or sustaining your ministry facilities.

Sounds a lot like Facility Stewardship.

The Intersection of IT, Facility Management and the Internet of Things (IoT)

I have been involved in church for over 56 years (born into a pastor’s home) and have served the church facility “market” for about 32 of those years. I can tell you first hand that for the majority of my association and work with churches, the church tends to be laggards when it comes to adopting new trends, means, methods…and technology. This is not a slam on the “church” as an organization, but just a reality.

It is true that many churches are now keeping up with trends and in many cases leading the charge (especially with sound systems, video production, etc). Think about the YouVersion Bible app (Happy 10th anniversary!). They are actually leading the way. Also, think how online giving and text-to-give is almost as common place as the offering plate.

There is a technology that is trending that I believe will impact all aspects of your world…including church…so let’s get familiar with it – Internet of Things (IoT). According to a Forbes article, it can be described as:

Simply put this is the concept of basically connecting any device with an on and off switch to the Internet (and/or to each other). This includes everything from cell phones, coffee makers, washing machines, headphones, lamps, wearable devices and almost anything else you can think of. This also applies to components of machines, for example a jet engine of an airplane or the drill of an oil rig. As I mentioned, if it has an on and off switch then chances are it can be a part of the IoT. The analyst firm Gartner says that by 2020 there will be over 26 billion connected devices…that’s a lot of connections (some even estimate this number to be much higher, over 100 billion). The IoT is a giant network of connected “things” (which also includes people). The relationship will be between people-people, people-things, and things-things.

So what does this all mean for churches…YOUR church?

Here is what I see happening and where we are heading:

  1. Major facility systems will be more integrated with themselves and with their management tools (i.e Church Management Software and Event Scheduling Software).
  2. Given the incorporation of API’s (Application Programming Interface – a software intermediary that allows two applications to talk to each other), more and more of this integration is going to interact via API’s and not through proprietary protocols.
  3. So…seeing that API’s are an IT world widget and not an everyday Facility Management tool, the IT department at your church will play a much larger role in the selection, implementation, training and maintaining of these systems (via IoT).
  4. Most of these IoT integrations will require Ethernet or WiFi connectivity which may require the incorporation of Firewalls, networks, servers, static IP’s, cloud connectivity and storage, etc, etc, etc.
  5. These applications will likely have cost and budget implications. Some will have significant reductions in cost as we become more effective and efficient…but some of the savings may be offset by subscriptions, hardware, software and the maintaining of the same.
  6. That leads to to the real crux…IT and Facilities must collaborate.
    • They must communicate.
    • They must seek information from each other before decisions are made.
    • They must determine the WHY they need an application before they decide on the WHAT and HOW.
    • It may also require budget discussions. As stated above, there may be cost savings and offsets. Whose budgets do these savings and costs impact? Same for staffing.

As you can see…this is not to be taken lightly…and unless you plan to continue to live in a cave rubbing 2 sticks together to make fire, this is coming to us all. Remember, the iPhone is only 11 years old…and yet if feels like we have always had one (or similar).

Is this on your radar?  If not, if needs to be!

Decision Making

All of us must make decisions…it is inevitable. We decide to stay fit, make certain purchases or we even make decisions that are going to impact our lives and those around us. Like taxes and death, making decisions are are part of life…even a decision to not make a decision is a decision (that was a mouthful).

I was with another Christian businessman last week who gave me the following from a business leaders group that he attends. This is some great stuff.

DECISION MAKING
  1. Do I want God’s guidance? Do I want to follow God’s plan, or do I simply want God to bless my plans?
  2. Am I in fellowship with God? Am I in a good spiritual condition to make certain decisions? Sin, relationships, attitudes and deeds in my life can cloud our moral judgement.
  3. Have I asked God for wisdom? James writes: If any of you lacks wisdom, you should ask God who gives generously to all without finding fault and it will be given to you. (James 1:5) Praying and searching the Bible should go hand in hand.
  4. Do I have all the facts? Solomon writes: Every Prudent person acts out of knowledge, but a fool exposes his folly.(Proverbs 13:16)
  5. Would I want everyone to know about it? If you are making a decision and you would be embarrassed if other people found out about it that means it is probably not a good decision. Proverbs 10:9 says: The person of integrity walks securely but the one who takes crooked paths will be found out.
  6. Is this going to make me a better person? Everything is permissible, but not everything is beneficial, and not everything is constructive. (I Corinthians 10:23)
  7. Will this choice control me, or will God still be in control of my life? Could this be something that is addictive to me? No matter how enjoyable it is, or how simple it may be, will it dominate my life? Paul writes: All things are lawful for me but I will not be dominated by anything. (I Corinthians 6:12) I won’t let anything master me, consume me or control my life.

These are great reminders for us all…especially me.


Stop Wasting Money

Seriously, stop.

If you are not seeking and following energy saving guidelines, you are spending money you do not have to. Money spent on facilities, when not necessary, take away dollars available for your ministerial mission. The logical response to this opening is to ask, “What can we do?” I am glad you are being logical, because I have some real simple steps for you to start with.

Step 1: Commit to it. Being energy efficient is not something that happens by accident. If you are not committed and intentional, you will not fully succeed. With the increasing connectivity in facilities management (think Internet of Things), opportunities to save will either change or new possibilities added. It takes someone committed to stay informed to take advantage of all that is out there.

Step 2: Turn it OFF. Find a way to turn things off when you do not need them. Use power strips and shut devices off at night, use time clocks, install motion switches, etc. Anything you can do to create a culture that turns the switch off when it is not needed will make a difference. Consider a time clock on water fountains…why do you need to keep water cold overnight? Motion sensors and light sensors on hallway lights. Why keep it lit if no one is there and the sun is shining? You get the idea.

Step 3: Check your bulbs. There have been lots of improvements in lamping technology over the last decade. Survey all the lamps you use; see if there is a more energy efficient option. If you have older fixtures, there probably is. Consider exit signs; if you are not running LED signs you are spending too much. If you have T-12 fluorescent lamps, you are spending more than you should. Simple changes here can earn significant savings.

“If you are not seeking and following energy saving guidelines, you are spending money you do not have to.”

Step 4: Check your HVAC. Your HVAC is one of the largest contributors to your energy bills. Keep doors shut, change filters regularly, keep the coils clean, and only run them when you need them. Smart thermostats, an EMS system, computerized controls, WIFI stats…anything that can provide additional controls, integrated scheduling, and monitoring is what you should be using. In addition, consider your set-points. Varying set-points between vacancy, occupancy, and events can reduce energy consumption. Targeted improvements in HVAC make the most sense – they provide a very quick return on investment.

Step 5: Plug it Up. This step is referring to your building envelope. Check for air infiltration and plug the leaks whenever you find one that shouldn’t be there. Temperature always seeks equilibrium, any leaks in your building will cause the conditioned and unconditioned air to mix and affect your desired comfort level, which in turn makes your equipment run more than necessary.

Step 6: Keep learning. Similar to step 1, you must keep trying to learn the best ways to be energy efficient. There are many State and Federal programs that you can access to learn more. Check out Energy Star for Congregations for some great info to start.

Also, conveniently enough we are offering another FREE webinar through CFMS on Energy Management on July 26th. What a deal, a free resource to learn how to save even more money in your facility. We hope to see you there, and may you find the ways to save in your facility.