Smart Buildings

Smart Buildings: Connected Technology in a Disconnected Industry

The smart building is, in essence, a set of interconnected building systems. The industry that surrounds those smart buildings, however, is epitomized by its disconnectedness. This irony is more than just an amusing fact. It highlights a serious issue in the smart building sector, one that holds back growth and limits the understanding of the benefits of Internet of Things (IoT) technology in the building community. Take energy efficiency in isolation, for example, the most straightforward application offered by smart building technology, in terms of return on investment (ROI) at least. Assess current energy use in lighting, HVAC and other systems, feed those figures into a model and receive an accurate ROI figure to weigh up against capital expenditure for the smart technology. It sounds simple but adopting this technology still appears to be a difficult decision for many businesses. There is a “lack of accountability for energy costs” in corporations, says Bert Valdman former […]

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The smart building is, in essence, a set of interconnected building systems. The industry that surrounds those smart buildings, however, is epitomized by its disconnectedness. This irony is more than just an amusing fact. It highlights a serious issue in the smart building sector, one that holds back growth and limits the understanding of the benefits of Internet of Things (IoT) technology in the building community.

Take energy efficiency in isolation, for example, the most straightforward application offered by smart building technology, in terms of return on investment (ROI) at least. Assess current energy use in lighting, HVAC and other systems, feed those figures into a model and receive an accurate ROI figure to weigh up against capital expenditure for the smart technology. It sounds simple but adopting this technology still appears to be a difficult decision for many businesses.

There is a “lack of accountability for energy costs” in corporations, says Bert Valdman former CEO of Optimum Energy, senior VP at Edison International and COO of Puget Sound Energy. “Corporations looking to control their energy destiny and improve sustainability often aren’t structured to drive action across the enterprise. Energy-related decision making is decentralized, and local purchasers typically lack the time and expertise needed to make sense of an onslaught of new technologies.”

As a result, decisions to adopt smart energy efficient technology are made slowly, if at all. Such delays have knock-on effects for the smart building sector, whose vendors create large sales teams that burn through significant amounts of capital waiting for decisions to be made. The range of different, but confusingly similar, energy efficiency solutions on offer to buyers only slow decisions further. As does the continuous stream of new technologies, which moves at a much faster rate than buying decisions, meaning before decisions are made new solutions have become available.

Furthermore, buildings often house multiple enterprises, but solution providers are usually structured towards organizations, with no clear system in place to bring companies within a building together on smart building upgrades. This is why the smartest buildings are those dominated by one enterprise or new-builds marketed as smart-ready - a tiny fraction of the overall market for smart, energy efficiency technology.

That's just energy efficiency, the simplest of smart building technology's portfolio of applications. The less-tangible but far more valuable use of smart technology for boosting health, wellbeing, and productivity of occupants present even more difficult decisions for buyers. The disconnectedness of the smart building sector inhibits its ability to overcome these issues and progress as a united industry with a common goal. We discuss many issues related to this in our new report The Internet of Things in Smart Commercial Buildings 2018 to 2022.

So what does a connected industry look like and how can the smart buildings sector come together for the benefit of the industry as a whole? Industry organizations in the food sector might offer some inspiration in this regard. In response to being disconnected, associations representing seafood, coffee, chocolate and other food segments are bringing together competing companies to create more efficient combined supply chains. The seafood industry, for example, is responding to a market where competition for limited resources affects their business more than competition for customers does.

“Any time you’re dealing with pre-competitive issues, the first challenge is to get everyone to think that if they work together, they are all going to make money together, and it’s OK if you make money and your competitor makes money,” said John Connelly, president of the National Fisheries Institute. “That’s the most important thing: A rising tide literally will lift all boats.”

The smart building sector is different, of course, but the theory is transferable. Instead of all companies using their resources to market and sell to the same people in the same companies, a single organization could develop a fair way to present all products and services to the market. In this way, customers could be educated by a trusted source without being overwhelmed by the entire spectrum of vendors pushing their offerings.

This is the view of Bert Valdman, presented in an article for Triple Pundit, who says that it would address barriers that prevent large corporations from moving forward on energy initiatives, namely complexity, a lack of familiarity and trust. "A shared services organization could develop a checklist of everything in a building that uses energy or water; technologies and practices that will make building systems maximally efficient; and specification, purchasing and use guidelines," he said.

This interesting idea is likely to face criticism, even staunch dismissal, but Valdman believes that that would wrongly be "based on a status quo mindset positing that something can’t happen because it hasn’t already." Many opponents would point to the complex issue of separating intellectual property and other legal considerations, but Valdman warns that getting into "nuclear disarmament–level negotiations" will be the beginning of the end for this cooperative concept.

“A collaborative effort can scale faster, deploy technology faster, and drive innovation into the DNA of an organization faster. If we are willing to work together, we can create the intelligent buildings we’ve all been seeking, but somehow always remain in the future,” says Valdman. “We just have to care enough to invest the effort.”

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