Intelligent Building Tech: An Opportunity for Business Model Innovation

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Technology

A white paper was recently released about intelligent building technologies (IBTs) and the opportunity an as-a-service model presents to increase adoption of these innovations. Internet of Things (IoT) devices and other technologies that collect data and optimize performance are a key part of the intelligent building formula.

It is possible with these technologies to reduce resource consumption, identify issues before they cause serious problems, monitor and clean indoor air, and even track how the space is being used. This allows for continuously recommending opportunities for improvement.

Many building owners and operators agree that advanced technology in buildings has value to them. However, the upfront capital investments for hardware upgrades, the time required to implement and commission the technologies, and the ongoing training requirements to ensure employees use new technologies effectively are risks (real and perceived) that delay and discourage timely adoption.

In the aforementioned white paper, key tech trends and their impact on buildings were highlighted. Here are five takeaways from that paper:

1: IBTs are a huge opportunity for all stakeholders: owners, operators and occupants.

Technology can reduce resource consumption, optimize operational performance, improve safety and security, and enhance human comfort, health, and productivity. When looking across all stakeholders in commercial buildings, from those who occupy it, to those that operate it and those that own it, all parties involved stand to benefit.

Owners can lease more compelling spaces at premiums, operators get better outcomes with higher transparency and a more timely grasp of equipment performances, occupants get highly desirable work environments, and buildings are safer.

2: The market for IBTs has not taken off as one might expect.

There are about 5.5 million commercial buildings, yet most have not taken advantage of the latest breakthroughs in hardware, software, and internet-based technologies due to risk aversion by building owners and operators. Moreover, the trillions of dollars in annual building energy costs continue to rise.

Technologies that seek to reduce energy, improve operations of buildings, and otherwise optimize the space have not scaled, and the lack of an appealing business model to tackle organizational inertia may be at fault.

3: Technology breakthroughs are set to increase in speed.

Moore’s Law projects that the density of transistors in an integrated circuit will continue to double approximately every two years. For buildings, this also means that real-world data will be collected at lower costs and at an even more granular level. This data will be analyzed and turned into actionable insights for less cost through automation, artificial intelligence, and machine learning.

4: Organizational adoption is a key challenge in IBT use.

Technology deployed across buildings is only as good as its adoption. In many cases, advanced technology can be hard to fit into a current building management workflow. Or, the data-driven nature of these technologies requires a fundamental rethinking of how a building can be managed.

More than other industries, technology in buildings enables great outcomes but doesn’t independently deliver them without proper and continuing worker training as well as organization-wide adoption support.

5:  Aligning IBT value with critical business outcomes is vital.

For many years, intelligent buildings were analogous to green buildings: they saved energy and other resources beyond an average building. In fact, IBTs improve building performance far beyond energy and resource consumption. But in many cases, they are implemented by organizations that are not in the real estate and buildings business.

An as-a-service model that leverages energy or operational savings for performance-based payments instead of outright capital purchase can form a compelling financial value proposition. That can, in turn, help overcome the organizational resistance to IBTs. This kind of model nudges buildings to focus on direct, mission-critical benefits, such as improving energy efficiency, enhancing occupant productivity, and improving the financial performance of assets.

This article was brought to you by the BuiltWorlds Contributor Program. Learn more about how BuiltWorlds collects the industry’s best thought leaders to publish their ideas here. Learn more about Joseph Aamidor here.