Uncovering Hidden Costs: How Can You Pinpoint Operational Overspend with Financial Data Analytics

Graham Perry
January 28, 2025

Operational Overspend - the Silent Killer of Profitability in the FM Industry

Operational overspend can be the silent killer of profitability for FM service providers. Despite your best efforts, hidden costs can creep into operations, eroding already low margins and stifling growth.

For financial directors seeking to optimise their bottom line, the question isn’t just about where money is being spent—it’s about uncovering and controlling these elusive costs.  And it’s impossible without the right data & analytics at your disposal.

Financial Data Analysis - The Modern Approach to Cost Control 

Gone are the days when spreadsheets and quarterly reviews were sufficient for managing operational costs.

It’s not surprising that 89% of FP&A leaders consider focus on data & analytics “critical” in 2025, with “providing true business insights, not just financial information” as a top priority (Gartner, 2025). Are you one of them?

Companies implementing advanced analytics for cost control achieve a significant reduction in operational expenses—which is crucial for businesses operating in the FM industry where margins typically hover between 3-7% (i-FM, BCI 2024 report). 

Speaking from our experience, our client’s operational costs were reduced by 17% within a year after implementing Analytics as a Service. We analysed their operational data combined from multiple data sources and revealed costly inefficiencies. Our client then acted on the insights derived from that data, which directly improved their bottom line.

Uncovering Hidden Costs with Financial Analytics

If you’re responsible for finances in an FM service provider business, you know that identifying areas of overspend isn’t always straightforward.

Labour costs, supply usage, equipment maintenance, and administrative inefficiencies can all contribute to escalating operating costs. These expenses often get buried under layers of processes, making it hard to pinpoint the root causes of overspending. 

Compounding the issue is the fragmented nature of data within most organisations.

Critical insights are often scattered across spreadsheets, siloed systems, or outdated software, making it nearly impossible to obtain a clear picture of where money is being lost.

As a result, you have every chance of continuing to overspend without realising the true extent of your inefficiencies. 

Labour Cost Optimisation 

In the FM sector, labour typically accounts for 40-60% of operational costs. Whether this number is higher or lower in your organisation, you can break down labour expenses by shift, location, and task to uncover inefficiencies with analytics. For instance: 

Analytics in Action

Cutting costs with data-driven employee management

Our client has enhanced visibility and control over their operations – empowering management to effectively optimise their human resources and significantly cut costs.

Inventory & Supply Chain Intelligence 

Supplies can be a significant source of overspending if not properly managed. Analytics can track inventory levels, usage patterns, and procurement costs to identify potential savings:

Equipment Efficiency Metrics

Equipment maintenance and replacement typically consume 15-20% of operational budgets. With data-driven asset lifecycle management, you can:

Administrative Process Optimisation 

Inefficient back-office processes can also contribute to hidden costs. By automating repetitive tasks such as invoice generation and payroll processing, analytics solutions can free up valuable time and reduce errors. Integrating analytics with your accounting software can help: 

Why Data & Analytics Are Game-Changers for Cost Control 

Relying on intuition or manual methods to control costs has never really been enough. Well-designed and implemented data and analytics will help you not only uncover hidden costs but also drive strategic decision-making to prevent future overspending.

Centralised Data for Financial Analytics

By consolidating data from various sources—payroll systems, inventory management software, and customer billing, and people management tools—analytics platforms provide a unified view of your operational expenses.

This enables you to identify patterns and correlations that might otherwise go unnoticed. 

For example, a comprehensive dashboard could reveal that certain locations consistently use more cleaning supplies than others, prompting you to investigate whether this is due to inefficient processes or unauthorised usage.

Similarly, we often find that our clients are buying the same supplies, from 3 to 4 different suppliers all at different prices. Understanding patterns like this allow you to both consolidate and use the increased purchasing power to negotiate better rates.

The Power of Predictive Analytics in Financial Planning 

Organisations using predictive analytics for cost management report even 30% improvement in cost accuracy forecasting. For FM service providers, this translates into: 

Benchmarking for Performance Improvement 

Analytics platforms can benchmark your operations against industry standards or internal targets.

This gives you a clear understanding of whether you’re overspending compared to your peers and helps identify areas for improvement.

If your labour costs are higher than the industry average, it’s a clear signal to investigate inefficiencies in workforce deployment. 

5 Steps to Implementing Financial Analytics

A success of your data project is determined by a solid Discovery Methodology followed up by a proven Delivery Methodology. For the purpose of this article, let’s summarise implementing financial analytics in 5 steps:

1. Start with the END in mind – define your strategic goals

What specific cost-control challenges are you looking to address?

Whether it’s reducing labour costs or improving supply chain efficiency, having clear objectives will guide your whole analytics strategy and ensure you don’t put money down the drain by making wrong initial investments. 

2. Audit your current data landscape

Begin by assessing the quality and accessibility of your existing data. Are there gaps or inconsistencies that need to be addressed?

Consider centralising your data in a cloud-based analytics platform for easier integration and analysis. 

3. Choose the right tools

Now, you need to select technology that will help you achieve your strategic objectives in the most efficient way. Consider enhancements to your existing systems, like cloud insfrastructure, that will make collecting & storing data easier, and choose an analytics platform that is scalable and integrates with your existing systems.

Look for solutions that offer customisable dashboards, predictive analytics, and real-time monitoring that will help you achieving your strategic financial goals. 

4. Hire data team / Choose the right partners

Unfortunately, the data department is way more than an analyst with a Power BI licence.

To actually get actionable insights from your messy data, you need a data architect, data engineer, data analyst, and business analyst who play different roles in eventually making your business data-driven. To learn more about building a data team, read our article here.

Partnering with an Analytics as a Service provider can accelerate your journey by giving you access to advanced tools and extensive expertise without the need for significant upfront investment.

5. Train your finance team

Ensure that your finance team is equipped to interpret and act on data insights. Investing in training can help bridge the gap between analytics capabilities and actionable outcomes.

The good news? Data has long been the lifeblood of finance departments so the jump from those trusty spreadsheets to analytics dashboards shouldn’t be a big one.

Financial Data with Analytics as a Service

Building an in-house data department requires a huge investment and can take years to bring ROI.

Our Analytics as a Service solution removes all the barriers to becoming data-driven by providing:

needed to turn your messy data into insights that will support more informed cost control in your business – all for a fixed monthly subscription.

Of course you might ask: “is it safe to partner with an external organisation to analyse our financial data”?

At Datore, we specialise in handling sensitive data and guarantee leading data security solutions, proven by our ISO 27001 & ISO 9001 certifications, and our clients trust.

We had data coming through within a matter of days and a clear plan for future dashboards. With Datore, we have clearer insights into the logistics and day-to-day running of our business. It enabled our colleagues to be proactive instead of reactive and deliver unique visibility of systems to our clients.

I cannot speak highly enough of the support and guidance that Datore has provided to us on our data project. They are professional, dedicated and always go beyond expectation.

Datore helped us save over £500,000 in energy billing errors for one of our largest clients.

I love working with Datore! They have really helped us to uncover the value that exists in our client’s data. They are committed professionals who can take a complex subject and make it very simple. They are also easy people to do business with.

We have struggled for a solution to use our business data effectively. Then we found Datore. They really understand data and its value.

The team at Datore have delivered on some of our most challenging alterations and updates with a professionalism that has always impressed.

Data Integration 

Your data will be combined from multiple sources to uncover the most hidden costs affecting your bottom line, e.g.:

Essential KPIs for Financial Directors 

We focus on metrics that drive financial performance including (but not limited to):

Real-time Monitoring and Alerts 

You get automated notifications to flag potential issues: 

"Look after the pennies, and the pounds will look after themselves."

When margins are constantly under pressure, identifying and controlling operational costs isn’t just an advantage—it’s a key to survival and growth.

With modern analytics, you’re not just looking after the pennies – you’re tracking, predicting, and optimising them in real-time. 

The question isn’t whether to implement advanced analytics for cost control, but rather: can you afford not to?

Ready to uncover hidden costs in your FM operations?

Our team of experts is prepared to show you how to transform your operational data into actionable, cost-saving insights.  

Contact Us

Graham Perry

Managing Director

Graham has worked within the built environment technology industry for the last 30 years. He is the lead judge for technology in the IWFM impact awards and has been a judge for the i-FM technology awards for the last 7 years.