In our Podcast series “Sh*t You Wish Your Building Did!”, Memoori explores the intersection between technology and commercial real estate through interesting conversations.

In Episode #25 of our Podcast, In this Era of ESG Reporting and Focus on Climate Change, how can Organisations Change their Culture to make Sustainability a Habit? Prabhu Ramachandran, CEO of Facilio Joins us for an In-Depth Discussion on the Subject!

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Transcript of ‘Making Sustainability a Habit!’

James: Prabhu welcome to the podcast!

Prabhu: Hi James thanks for inviting me for the podcast.

James: Of course interested to hear your thoughts today and uh yeah let’s get going I mean I think the what we talked about and why I wanted you to come on and have a discussion with us was around making sustainability a habit which I think is a fascinating subject and I think to begin with I’d like to frame that you know I’d like to perhaps look at some of the background and what’s behind that I mean so you know in a broad context how do you feel about uh the smart building industry kind of response to you know the climate crisis and also the energy crisis that we’ve been going through in Europe

Prabhu: Yeah that’s a good question so if you see post covid in major parts of the world there is the cost of energy is U really multi-folded and the response broadly is that uh compared to few years back sustainability has become a business need now there is a strong need as part of the Core Business it’s it’s no more nice to have uh there is a need for business to be energy efficient because there is a direct impact on their spend their profit uh so this happened like within last uh few years right so the response has been um varied because traditionally the industry has been used to looking at Legacy Way of saving energy like by do doing physical retrofit uh big projects which is mostly Services driven and Hardware driven uh although these are all Essentials but the need of the how is how do you start saving energy now like month on month you need to start showing right so um the market has been looking at how what else they can do how they can go and expedite this deply this the challenge there has been like there has been very little success stories for customers um more and more what is happening is more softwar driven models are being tried out by the industry uh now for saving energy.

James: Okay yeah I think you’ve that’s very interesting Framing and I think you covered some good points there so so this kind of um I think it’s fair to say what you described is more of like this ad hoc energy initiatives approach why is that you think not enough then why what more should companies be or what should what should companies be asking for when they when they’re talking to Partners.

Prabhu: Yeah so if you look at the traditional model which is again as I mentioned more services driven and physical retrofit driven driven it is capex typically executed as a siloed project and doesn’t really bring in all the stakeholders the real sustainability is going to come in terms of how do you bring in continuous everyday energy saving right the key part of that is how do we connect people process and system in any business people are like who is occupying the property who is maintaining the property okay and then your systems are automation systems systems that are consuming energy like HB systems elevator systems and then the whole process of who does what who repairs who maintains uh who runs the building in terms of switching on Switching off scheduling so these are all very Silo today and the traditional projects again creates more Silo okay so what happens is that will uh that takes a lot of time to see Roi and sometimes there is lack of participant from the people aspects and there is very little Roa from that and the better model is how do we integrate people process and systems through a unified software right so that everybody is aware of your sustainability performance everybody is participating day in and day out in your sustainability initiatives um so that br things continuous Improvement uh better improvements faster improvements in terms of reducing in your energy consumption which is key part of sustainability the other angles are how do you bring in clean and energy but the first part is how do we make sure the consumption is reduced and that is going to come from having reducing silos bringing in a model where people process systems are connected information is Flowing across everybody every teams and then the either it is Improvement or poor performance is everybody’s aware and they’re acting on it.

James: Okay great just to pick out some things there because I thought that was that was a good statement around sort of what you were saying day to day um and again that’s where it we bring in the sort of the title here right like habits so we’re trying to form habits within this company uh and you know ultimately then with that goal that first goal the first piece of the energy puzzle is reducing energy consumption being more energy efficient so yeah we elaborate on that then what how do you go about making this a habit making sustainability a habit.

Prabhu: Yeah so I’ll explain this with a good example of one of our customer in UK um there’s a retail customer named Robert Dyas uh they own um retail stores that sell um household uh uh equipments I know it well yeah yeah yeah so they became our customer and the great thing about them is they have already thought through this model of they had a strong conviction that uh energy saving can be achieved and can be done faster if they make it as an habit among their teams their suppliers their subcontractors um so how did so because they had this Vision they chose facilio and then what they did is very simple implementation where they didn’t go and put a lot of Automation in the stores put a lot of additional sensors in the stores so we help them create simple apps uh apps for say store managers apps for sustainability uh Executives that are in their headquarters apps for leadership wherein the app will show store level insight about what is the energy usage what are different Energy Efficiency indexes and then we also automated some processes like again the store manager go and do a check of um whether they have switched on all the Lights and HVAC systems before they close the store and they go and continuously monitor what is a temperature and then make adjustments so these are very simple routines that some of the staffs have to do at store level uh that brought in Energy Efficiency and then what happened is across the organization this information was shared where across 100 plus strores which are the better performing strores that week that month and which are the stores where there is lot of score for improvement that created like a gamification among their team everybody started participating and the store manager would take pride in their store becoming in top 10 right so that brought in lot of discipline within the teams where they started following all the routines switching off light switching off air system making sure it is ambient temperature and and then this information was shared people were appreciated so they they saw like in their first year they saw 20% reduction in overall energy consumption and as we speak they are rolling out more routines uh so that they want to further improve that 20 percentage so this is a great example of where we mostly use existing infrastructure the meter submeter data and we brought in multiple stakeholders leadership headquarter staffs store level staffs third party vendors and then the the information insights were shared plus the lot of processes were automated routines checks and all of that and this is giving them 20% year on energy reduction and all of these are software driven no physical retrofit and this is happening every day okay so this is a great example of how cultural shift driven by Connecting People process systems through a unified software can bring in okay so next step is they’re looking at can they put more sensors can they automate many of the manual processes their teams are doing can they go and retrofit some of their hvac systems for better performance they’re able to make this de through the data and insight our system is giving so instead of going and applying this across 100 plus stroles they’re able to identify what are my 10 20 stores where I would have to go and retrofit my hbac system because that is where we are clearly seeing that they very inefficient instead of broadly going applying same thing for 100 stores so this is what a softwar driven system brings in continuous Improvement making it as an habit faster.

James: okay brilliant I think you’ve really laid out um some in steps there okay and they’ve they’ve done that first part and clearly seen some benefits from it and I guess as well it’s um the Not only was it probably easier to implement but also cheaper as well so they’re doing that step first and seeing the benefits from that and then taking it Forward yeah I know and I really interesting that you bought in gamification that was something I was going to ask as well is it also then are they incentivized is that cultural shift like do you and in the gamification do they bring in um incentives for people then to um to reach those goals.

Prabhu: Yes so I think incentivization is key part of it but in case of um um our customer they just into one year Journey right they I think they ready to start incentivizing uh folks but what they seeing is because of the fact that information is shared and people people started taking pride in their store being energy efficient m okay uh for their further scope like to further go from % to more um I think it make sense to start incentiv could be in terms of money in terms of like appreciation whatever.

James: Yeah exactly so then you were talking about the next steps um and I guess that brings in more technology so I’d be interested in your opinion about how you you know as a let’s say as a Robert Dyas or as um you know another type of company you know how do you find the right technology to use and at what stage as well?

Prabhu: So that is that’s why I mentioned earlier right um this happened the shift of Energy Efficiency becoming business critical is is happening very fast post covid so um there is lot of open question around who will own this uh traditionally there is a sustainability team mostly in large corporations and then they do some part of it but now this is becoming kpis for facilities team facility management teams and in some cases even it is now involved CFOs are involved into how do you look at sustainability right the challenge there is how do they go about it the traditional way is there but it’s slow and it takes lot lot of time to see the ROI and software driven ways looked upon as one uh potential um way to Fast Track it but again there is very little references or success stories right U because this is new like how to use pure software to go and bring this chain so that’s where customers there’s a lot of rfps being floated customers are piloting then going about it there is also lot of uh um uh references customers are taking from how similar problem have been solved in other domain for example let’s take say um it domain right 20 25 years back it was like this very manual um a lot of it work was done physically you have an office your internet is not is working there will be an IT representative locally present in that Flor will come and look at your computer and do things to fix it right so in last last 20 25 years what has happened is SaaS came in companies like service now came in they productized this they built platforms for broader it operations and then more and more of it became transformed into software from physical devices your firewalls gateways where physical boxes now they’re all software running in Cloud okay so that is taken as a reference where um why can’t do you have similar software driven model for the non it the whole energy saving is like a similar problem but in the operations technology world you have instead of your network you have your hbac systems your elevator systems so how do you bring in software platform model to optimize your operations technology so that is taken as a reference and we are seeing that there’s a lot more rfps now coming which specifically asking how can we how can you put software to solve this software platform based approach so I’ll give another example of again one of our customer in UK British Land so they they have several buildings and they started their first implementation with a very large um 700 800,000 square feet property um in in London where office building yeah yeah uh so the already had lot of automation system in place they had a BMS they had uh sensors to count occupants in each floors um they so they had a separate Access Control Systems automated elevator systems is already efficient compare like like for an average buildings right so they they came up with an RFP where they chose facilio they put our software on top of it where we connected with the hbac systems Access Control Systems and our system was now able to understand the usage of each floor because we have access to the access control system and then we started applying softwar driven optimization methodologies like how do we uh throttle hbac in meeting rooms based on their occupancy in each floor based on their occupancy some floors have night shift some floors have day shift so we start optimizing every minute on HVAC system of this property okay so again what they started seeing is they saw like 30 in the first year they are now seeing 30% reduction in their HVAC energy consumption just with software driven optimization of scheduling based on occupancy uh they were able to see that and they’re continuing to do more now we are connecting with their other systems to improve this is like an advanced building already having automation already having access control and multiple Silo automation system right they are able to bring in a software like Facilio connect all of that bring data and then connect their people their occupants their tenants their teams their thirdparty vendors they’re looking at maintenance schedules how do we optimize that and then looking at optimization occupancy they are now seeing like 30% reduction hwac energy consumption so this is a great example of how do you bring uh like a software driven uh model for energy saving.

James: yeah I know very interesting um I maybe to um think about that in another way as well would you so how would you then let’s say you not it sound like that building initially was relatively Advanced although Still Point Solutions right not much connectivity what if let’s say you’re you’re an owner operator of a sort of building that isn’t so Advanced perhaps doesn’t have some of the uh you know some of the equipment you mentioned or isn’t particularly you know they’re dealing with Legacy systems so as well it makes perhaps makes it integration a bit harder is that is that more of a challenge um obviously it is but like I mean in terms of um are they still going to be able to get the return on investment that that they need?

Prabhu: Yeah so yeah again good question so what if if the building doesn’t have lot of automation right so any modern day uh building even if the building is old but if they are being occupied today there is fair level of automation already there even if they don’t have a BMS or like a very basic BMS but there are sensors there are ways where you can uh measure some things right M so that’s where like our model is if the building has say 30% automation compared to what it should have a software driven model can go and start creating value out of that uh 30% of automation that is already there okay say for example if there is a just one meter in the building root meter there is no sub meters we can go and create apps where we can actually create virtual meters have a routine where somebody can go and take me to readings so that is one way second is whatever is there even if there is no BMS we can go and integrate with your children systems your hvac system directly uh this this is less of a technical challenge this has been more of a how the industry operates going and uh a software going and talking to a existing sensor or an equipment is not a big technical challenge we have solved that okay it’s more about how that team or like some part could be um traditionally outsourced to a third party OEM so you just have to convince OEM that hey you need to open up some ports so that we have a software that wants to talk to that system okay so that’s more about culture and how traditionally businesses are done Less on technical problem that’s what we are seeing with most of our customers where there is some friction initially but if customer explains it to different teams brings in everybody into the platform uh we we go through this technical bottlenecks very easily we are able to connect with systems and then we start creating value uh from whatever is already existing assume the same British land Building if it had 50% less sensors and automation maybe instead of 30% reduction in year one they could have seen like 10% 15 percentage right but that motivates that’s also funds you to go and invest that into more automation next year and then move from say 15 percentage to 20% and then so so that is that is a path that customers are seeing where customer starts with buildings where they have better automation see the value and then fund that into other properties where they may to go and retrofit some automation systems

James: I think that’s a really good point use the energy use the the cost savings to then fund further development and increase those savings yeah excellent yeah I mean last question to you Prabu um I mean if there was one thing that you want the audience to take away with today from our conversation what would it be?

Prabhu: Yeah so as I mentioned earlier right so um this is like there is lot of things happening around sustainability customers are looking at ways um so there are uh successful models like I mentioned it world uh companies like now platform how do we automate create value from software even if you take Tesla for example right Tesla’s predominantly succeeded by making the cars faster more software while eveve was already there what made Tesla exciting is there is more software it can drive by itself there’s a big screen we can interact with a car there’s an app created habit created right so so that’s where you so the one takeaway is how do you really uh bring in software into buildings because you brought in software into other business processes confidently bring in and then take a call walk run approach in the world of SaaS uh the SaaS model itself is very uh lucrative for this where they can start small like I mentioned you have 10 buildings five of them have great automation start with that start seeing value in few months and then walk and then run so go to other properties bring in more sensors more sensors more data more savings uh so the takeaway here is use software to connect people process systems so that this becomes a habit this becomes a continuous uh Improvement in in terms of across the business just just not like once in two year project where some report comes saving I I save so much of energy.

James: Thank you so much and really appreciate your time today and of course thanks for everyone for listening. Goodbye for now!