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
Achieving Optimum Energy Efficiency in Buildings - New Benchmarks Being Set - 7/26/2018
Five years ago, the driving factor for smart buildings was energy costs. While operational efficiency and occupant experience have been added to the discussion, energy savings still play an important role in the smart building strategy. Energy usage in buildings accounts for over 40% of electrical consumption which has ties to coal, natural gas, petroleum and nuclear energy. Energy waste in buildings is easily evident and provides great opportunities when addressed. Advanced energy analytics, enhanced building automation monitoring, new lighting solutions, low voltage infrastructure, micro grids and other technologies are reshaping the building energy landscape. This webinar will bring best practices and new benchmarks into focus.
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.
Kevin Bates is the owner of Sharp Development company. Over the past six years, he has concentrated on retrofitting older generation concrete tilt-up buildings that are carbon neutral, have a net zero energy bill as well as a strong emphasis on the health and wellness of the interior environment for the occupants. The driver for Kevin is to demonstrate that this way of repurposing existing building stock can be done in a manner that is more profitable for the ownership than the less expensive way of building to meet minimum code.
Dana bridges the gap between buildings and their occupants through fun initiatives that drive energy efficiency across LinkedIn’s global portfolio. With over six years of experience in corporate sustainability at both startups and large corporations, Dana understands the crucial role that business plays in addressing climate change. She is excited about how technology is transforming the built environment, and looks for opportunities to scale innovation and to help LinkedIn and others achieve audacious sustainability goals.
Matt Eggers is currently VP, Yardi Energy where he leads the development of software for energy management and high performing buildings at Yardi. He has extensive experience in leading teams to record sales and growing operations and market share.
With over 30 years of experience in commercial real estate and IT/Internet-based building services, Chris leverages his deep rooted knowledge of what is important to building owners and operators. He will discuss how ICONICS advanced building optimization software solutions with real-time Fault Detection and Diagnostics (FDD) help customers by integrating information from all disparate building equipment systems and energy metering into a uniform building automation system. Automated FDD visualizes in a meaningful manner what is critical to achieving energy reduction, operational efficiency and sustainability goals. Chris holds a BA from the University of Pennsylvania.
Ralf VonSosen has 20 years experience in technology product, marketing and customer operations. He is passionate about transforming data into actionable insights. Ralf leads Lucid's customer onboarding and professional services.
Karthik is the Director of Energy Management Solutions at EnerNOC. His team works with large energy users in the Commercial and Industrial sectors to deliver outcomes using energy intelligence software, utility bill management, smart building solutions, microgrids, and more. Karthik has over 10 years of experience in the energy industry and holds a Bachelors in Engineering Physics from Queen’s University and a Masters in Systems Engineering from Cornell University.