Reserve analysis is an analytical project management tool that helps project managers and coordinators to effectively estimate the cost of various project aspects and components, accurately budget for all project processes, estimate the time each activity will take as well as monitor and eliminate various risks involved in the process.

In all its glory, reserve analysis encompasses 3 distinct approaches:

1. 1. Onsite outward analysis
   2. Component evaluation
   3. In-depth financial analysis

1. On-site analysis

This approach seeks to point out and quantify the components that should feature in the reserve study report. It also aims to identify components that ought to be omitted from the reserve study report due to their negligible financial value.
Components with substantial maintenance expenditure that have been eliminated from this report are usually listed as ‘excluded’ along with valid reasons for the elimination.

2. Component evaluation

Also an on-site procedure, component evaluation may be performed by a separate team of reserve analysts from the one that conducted the on-site analysis. It involves consideration of on-site analysis and further application of maintenance procedures geared toward extending the useful lifespan of components, evaluation of the time remaining for the components to wear off and assessment of alternate replacement parts.
It’s vital to note that the estimate component replacement charges should encompass all worn-out parts’ removal costs as well as costs for installing the new component and putting it to operation.

2. Financial analysis

This approach seeks to identify the requisite financial assessments for future funding. According to expert reserve study and analysis firms like Facilities Advisors Inc., the normal 30-year financial projection phase is usually necessitated by the long life spans of some components featured in a majority of reserve studies.

There are two major strategies for conducting an in-depth reserve analysis:

i. Manual option

In this approach, the analysis is usually conducted once every 3 or 5 years based on an outside professional’s site visitation. Preferably, the professional should be a holder of PRA or RS accreditation. After the analysis, a static report is availed on paper detailing the financial, timeline and component statuses of the project.
Moreover, highly active organizations additionally prepare annual analysis updates without site visits from outside specialists.

ii. Reserve Study Software

Owing to the static-paper limitations of the manual analysis, a few associations have invested in autonomous Reserve Search (RS) software to expedite the reserve analysis task and provide the results in real time. Additionally, this software can be used to effectively manage projects like reserve analysis.
Despite the convenience it offers, the RS software has its fair share of downs as well:
It inhibits the establishment of a successful knowledge-based analysis system

It’s only suitable for small associations with few and simple common areas. Complex-area large associations are at a loss.
In a nutshell, incorporation of these reserve analysis techniques is bound to help you improve your association’s operation.