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presented at IBcon over the past two years. When building analytics
first gained traction, the conversation centered on the question of who
had the best technol-
ogy, algorithms, and
rules. While important,
the technology issue is
only one of three key
considerations. Even for
companies with adequate
technology, you must also
evaluate the type of solu-
tion and the workflow.
With the maturation of
analytics, there are now
four distinct types of solution providers which correspond to different
customer-types.
It’s crucial to plan for organizational alignment and workflow, because
the best analytics technology can find opportunities in the data, but
can’t perform physical work orders or manage staff. An analytics plan
should also include discussion of central monitoring and management.
You can still retain local decision-making and entrepreneurial thinking in
regions or branch offices; but now you address the role of headquarters
or central office in supporting field offices with technology and tools.
The Transition Risks
Since building technology continues to transition, it is left to the real
estate organizations that own, manage, and occupy the facilities to
transition in their own right. Since the technology has already changed,
it leaves organizations no choice if they are to remain productive and
competitive; the opportunity cost is too high. To be more direct, the risk
of not changing has exceeded the risk of changing.
So, you may ask yourself, “What is occurring in my buildings and
portfolio as a result of the building technology transition?” For starters,
the traditional support resources for the real estate industry such as
architects, engineers and construction companies have not adapted to
information technology as quickly as it has entered into our building
systems. You cannot rely only on the traditional approach. Facilities staff,
property management companies, and operations and maintenance
contractors often have generational skill gaps relating to protocols,
data points, software driven systems, system interoperability, remote
maintenance, etc. Specifically, graphical user interfaces for each separate
system, and the addition of newer management systems for daylight
harvesting, water reclamation, accent lighting and other nontraditional
systems have added meaningful workload and complexity to the daily
responsibilities of management staff.
What are the risks of not transitioning with these changes?
1. Rising maintenance costs due to proprietary service options and
increasingly technical systems; higher cost to get relevant data out
of your own systems (including current and future costs)
2. Security breaches from remote access to building systems and a
lack of minimum requirements for vendors and landlords
3. Inability to be nimble and to react quickly to energy price volatility
with system interoperability and optimization
4. FTE increases due to additional system management needs, legacy
O&M contractors skills and new occupant demands
5. Competitive disadvantage due to higher fixed operating costs and
capital-intense ‘fixes’
What’s Next?
A generational technology transition such as the one real estate is
experiencing will create winners and losers for vendors, building owners
and managers. Owners and managers will either embrace change and
thrive, or hesitate and slip behind their competitors or benchmarking
peers. The following steps will position owners and managers to thrive:
1. Education: Commit to deeper educational process and acceptance
of the facts
2. Strategy: Develop your own strategy that includes organizational
alignment and a ‘destination architecture’. Simply put, don’t look for
your strategy in a solution provider PowerPoint, but rather let the
solution providers fit into your strategy.
3. Stewardship: Practice the Hippocratic Oath by first “doing no harm”
with the existing capital and operational budgets that you have.
4. Measurement: Measure with cost structure and not a series of
unrelated ROIs. The big, long- term money is in the cost structure of
every purchase you make and how you are set up operationally. This
not only includes energy costs, but facility management, operations
and maintenance contract restructuring and requirements, as
well as ESPC terms and conditions (if you used performance
contracting).
5. Data-Driven: Become data-driven by having a data and analytics
plan that includes central monitoring and central control where
applicable.
Conclusion
Generational industry transitions are periods of risk and opportunity. The
deck will get shuffled and some will slip from their perch while others
will break from the pack. The important perspective is that material
change has occurred and continues to occur, and that forces the need
for a strategic reaction. In the book “The Lords of Strategy,”Walter Kiechel
III defines strategy as “…the framework in which companies understand
what is happening to them and how they should react.”
Rob Murchison Tom Shircliff and Rob Murchison are a co-founders
Intelligent Buildings and principles of Intelligent Buildings, LLC, a nation-
ally recognized smart real estate professional services
Tom Shircliff company started in 2004. Intelligent Buildings provides
Intelligent Buildings planning and implementation of next generation
strategy for new buildings, existing portfolios and smart
communities. Their work includes “The Smartest Build-
ing in America,” the largest energy analytics project in
North America and the smart buildings standards for
the US and Canadian governments. Both are frequent
speakers and collaborators with numerous universities
and national laboratories. Between them they have
been a gubernatorial appointee for energy strategy and
policy and founding Chairman of Envision Charlotte,
a Clinton Global Initiative, a certified continuing edu-
cation instructor at Harvard University and a member
of the building technology advisory group at Lawrence
Berkeley National Laboratory.
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