Why the 'As A Service' Model Will Be a Game Changer for Intelligent Buildings
Today’s open protocol building automation systems have the potential to make the 'system of systems' within facilities operate as a well-designed, tightly integrated, ecosystem - the operative word here being – potential.
Due to the way that automation systems are designed and procured both within the new construction process and when they are being replaced at the end of their useful lives, that potentialis seldom actualized. These lost opportunities to actualize that potential 'intelligent building' functionality and value are primarily due to two things:
- The absence of a strong, well informed, BAS advocate to make the connections between the ultimate building occupant’s desires regarding the total building environment and the potential functional contributions of the BAS to meeting those goals.
- A value engineering process in the new construction environment, and an ‘in-kind' replacement mentality during end of life replacements, that can transform even a highly intelligent integrated systems design concept into a simplistic design providing little beyond automatic temperature control functionality in the pursuit of low first costs
Given the low rates of return on system replacements for these underutilized systems at end of life, one might ask why someone would bother to replace the automation system at all.
The short answer of course is that any building of significant size really needs an automation system to operate in a manner that provides a comfortable and cost effective work environment. The interactions between the various elements of the HVAC system alone are so complex that relying on manual interventions between a building operator(s) and these systems to maintain an acceptable work environment is simply not an option. If there were no automation system in place, the physical building environment would be a mess, and the operating costs would be far from optimal. Consequently, when the automation system is at the end of its life something must be done. If not, the potential for major building systems performance issues increase substantially.
The end of life 'choice' then really becomes when to replace the system, since without replacement the building environment and the operating costs would ultimately run out of control. Even considering this, given the low returns on 'in-kind' system replacements, many CFOs will choose to not replace the system until disaster is imminent. The logic behind that choice is 'bad investment, don’t fund it' or more accurately 'bad (but necessary) investment, delay funding it as long as possible.' Frankly, it is hard to argue this point with the CFO, given his or her fiduciary obligation to the shareholders to use scarce capital wisely. There is however another line of thinking to explore when faced with this 'bad investment, don’t fund it' scenario - nd that is to restructure the investment opportunity, thereby improving the returns.
As noted earlier, the automation system, in its optimal deployment can facilitate interactions between the various subsystems in the building (HVAC, Lighting, Access Control, Security, Fire, Life Safety, Building Transportation, etc.) capturing operating efficiencies and producing a more productive and efficient building environment. Making this happen would require an intelligent and robust system design that survives the new construction or system replacement bidding processes. It would also require that the system ultimately provided would feature an open communications protocol so that useful interactions between the various systems can take place in support of the occupant’s mission to achieve the most comfortable, productive, secure and efficient environment possible.
It is highly likely that the only way both things will happen is if these system-related decisions are isolated from the usual machinations of either the new construction, or in-kind replacement system procurement processes; and, instead made as service based decisions on the customer’s part, within a service based delivery model on the part of potential service providers. In other words, potential service providers would be asked to install and maintain (throughout its life) a system capable of providing the desired facility-related end results for the building owner/occupant.
In this context, a rationale service provider would be motivated to design and build a system that provides maximum efficiency (in delivering the customer’s desired end results) at minimum costs. This approach provides the intended ‘first cost controls’ of the new construction or end of life replacement bid processes and contributes to the service provider’s profitability.
The client gets a better performing building and the service provider grows a business grounded in sustainable value. This clearly represents a substantial improvement from what is typically delivered to the ultimate building occupant today, via the new construction process, or when at end of life, an old inadequate, system is replaced in-kind with a new, inadequate system.
Ask yourself if you have faced the ‘bad investment, don’t fund it’ CFO scenario at an end of life automation systems replacement or, have you had bad experiences with the results of new construction automation systems installations?
If so, you can continue to do the same things, the same way, and get the same results; or, change the game.
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UPCOMING REALCOMM WEBINARS
Commercial and Corporate Real Estate Cyber Risk - Developing a Comprehensive Strategy - 10/25/2018
Hardly a day goes by that we don’t hear about a Cyber breach. The most recent of scale was Equifax, the credit reporting agency in which credit information of 143 million of its clients was breached. While most of the incidents we hear about involve data or financial theft, there is a looming threat…our built infrastructure. This infrastructure includes everything from power plants to dams, but also includes the millions of buildings we use every day to work, shop, learn, recreate, manage our health and more. The threats range from unwanted building access to pirating of video surveillance and everything in between. This webinar will focus on the entire spectrum of Commercial and Corporate Real Estate cyber challenges, solutions and strategies.
Founder of Realcomm Conference Group, an education organization that produces Realcomm, IBcon and CoRE Tech, the world's leading conferences on technology, automated business solutions, intelligent buildings and energy efficiency for the commercial and corporate real estate industry. As CEO, Jim interacts with some of the largest companies globally pertaining to some of the most advanced and progressive next generation real estate projects under development.
Tom Shircliff is a co-founder and principal of Intelligent Buildings, a nationally recognized smart real estate professional services company that was started in 2004. Intelligent Buildings provides planning and implementation of next generation strategy for new buildings, existing portfolios and urban communities. Tom is a speaker and collaborator with numerous universities and national laboratories, a gubernatorial appointee for energy strategy and policy and founding Chairman of Envision Charlotte, a Clinton Global Initiative.
As CIO at Meridian Capital, Sandy Jacolow oversees the firm’s nationwide innovation and technology initiatives that support the company’s brokerage, investment sales and retail leasing businesses and growth activities.
Ron Victor is a Silicon Valley based technology entrepreneur with 20 years of experience and expertise launching new ventures at start-ups and fortune 1000 technology companies. To-date he has enabled raising more than $30Million in start-up capital for multiple start-ups in silicon-valley. Ron has founded and led three companies to-date with successful exits. His latest venture is IoTium Inc. – a Silicon Valley start-up that provides a secure, cloud-managed, easy-to-deploy software defined network infrastructure for all IoT verticals.
Coleman Wolf has extensive experience developing enterprise-wide access control and alarm monitoring systems, developing business analyses, and conducting detailed security surveys and assessments of corporate offices, power generation plants, and facilities related to national critical infrastructure. Coleman has also managed numerous security system installation and upgrade projects. He holds a Master of Science, Computer Information Systems degree from Northwestern University and a Bachelor of Science, Electrical Engineering degree from the University of Michigan. He is also CPP (Certified Protection Professional) and CISSP (Certified Information Systems Security Professional). Coleman also holds the following Professional / Civic Affiliations: ASIS (Member of American Society for Industrial Security), Chairman of the ASIS Information Technology Security Council, and is an active member of the ASIS Security Architecture and Engineering Council.