Navigant Research Blog

The Real Value of Digital Transformation for Commercial Buildings

— August 5, 2016

Home Energy ManagementThe Internet of Things (IoT) and digital transformation are hot topics that appear to be reaching a buzz, but there are practical implications for customers within these developments. The idea is that digital transformation and IoT deliver better information for comprehensive insight and management strategies. IoT is a platform of devices, communications, and analytics that creates a comprehensive picture of the commercial building. IoT enables a digital transformation of a commercial building that results in a data map that can be translated into vital information to orchestrate new business models for bigger revenue streams and a smaller risk to the bottom line. The generation of data from equipment operations and occupant behaviors married with weather and grid conditions help customers save money, minimize power outages, and maximize the occupant experience.

Data for Optimization

The intelligent building is defined by integrated controls and automation that optimize how space is used, how equipment is operated, and how behavior modification is directed because of insights garnered through software analytics. A pinnacle in optimization, the intelligent building maximizes the effects of capital expenditures, operations and maintenance management, and occupant engagement. This is all made possible by data. Today’s reality is that many buildings are far from data rich and, therefore, incapable of optimization. There is a major shift underway thanks to technology innovation beneath the umbrella of IoT.

IoT is about the proliferation of devices, the connectivity of systems, and the access to data. In the commercial building environment, this is a major shift that will redefine how buildings are operated. IoT is the foundation, the data platform that enables the digital transformation for unprecedented business value in corporate and commercial real estate. It is all about better information for better management. A recent survey by Dell highlights the customer perspective: “Investing in cloud applications, cloud infrastructures, mobile and/or IoT solutions to transform their businesses. By adopting these technologies, most companies hope to drive up employee productivity (75%) and grow their businesses (67%).”

The commercial buildings industry is known as a slower mover, but there is gaining momentum around digital transformation. Major technology incumbents, software startups, and even electric utilities are moving to promote solution adoption. A few interesting examples include:

  • Bala Ram, the vice president of SAP Labs, explained the growing momentum of digital transformation: “Across multiple sectors, whether it’s manufacturing, energy and natural resources, healthcare … there is a big awareness right now that we must use this sensor data to create new business opportunities, and then solve the existing problems.” Ram’s statement highlights that the pace of adoption may vary, but customers across the economy now understand the power of data.
  • IBM recently explained the benefits of digital transformation, stating that it will “help us to create buildings that can sense, respond, self-improve and communicate, putting them in far greater harmony with humans and the planet.”
  • New York State Energy Research and Development Authority has announced $30 million available for Real Time Energy Management system implementation and services with Noveda Technologies for up to 5 years. “These funds will support the use of advanced technologies to help building owners fine-tune their building’s energy systems, identify capital projects to cut energy costs, and reduce operations and management costs by an expected 5% to 25%.”
 

Drones or Data for Facilities Management?

— March 7, 2016

Luftbild einer Windkraftanlage mit Drohne Rotorblatt Wartung InspektionThe potential benefits of unmanned aerial vehicles, commonly known as drones, have received a lot of attention as more and more applications have been identified. In addition to their continued use in warfare, drones are emerging as a useful tool for everything from wind turbine inspection to stopping poachers and spotting sharks. The seemingly infinite possibilities for drones have now extended to commercial buildings, where they can be used to provide visual inspections of hard-to-access spaces.

The use of drones by facilities managers seems like a smart move. Technicians no longer need dangerous ladders or expensive scaffolding to inspect the conditions of their facilities. However, drones are not the transformative change that facilities management needs. Physical inspection is the old way of thinking—it has been a necessity driven by technological limitations. Though drones now present the opportunity to enhance the process, the process itself is fundamentally flawed. While not as flashy, advances in building energy management systems (BEMSs) create the promise of technology’s ability to change the maintenance paradigm.

Data, Not Drones

The problem is not in drones, but rather, in a management strategy that relies on periodic visual inspection. Facilities managers will only find problems if they are looking for them, but that’s not a guarantee that these problems will be found before they affect operations. The inspector needs to know what to look for, the problem has to have symptoms that can be seen visually, and the inspections need to occur regularly.

Even if the manual process of drone inspection does properly identify problems, maintenance to address those problems still needs to be scheduled. The more sophisticated solution is to rely on building data. By understanding how a building operates and monitoring for deviations from that baseline, problems can be automatically identified. Moreover, fault detection from building data can be directly integrated into workforce management software so that the labor needed to address problems is actually performed.

Vendor Challenges

The challenge for vendors of building systems is that building owners and operators don’t have much of an appetite for reducing operating costs through capital investment. After all, paying for the installation and integration of sensors now may provide cost savings in the future. On the other hand, those savings might never be realized. Or that conversation could never happen because investment is focused on business operations to grow revenue rather than to cut the cost of operating the building.

As a result, the idea of inspections with a drone are promising because they do not require capital investment, yet produce some operational savings. They are also flashy new pieces of technology with lots of buzz. However, investment in BEMSs provides a meaningful alternative strategy to the management of operations and maintenance. What’s more, unlike drones, BEMSs have the ability to shift operations and maintenance procedures from a reactive process to proactive approach.

 

Can Energy Management Software be the Link for Customer Engagement and Compliance?

— November 24, 2015

Electric utilities and energy providers are preparing for a new energy reality—a transformation driven by climate change risks, rapid growth in distributed energy resources, and the proliferation of data across the energy value chain. Navigant Research has outlined this energy industry transformation as the development of the energy cloud. The evolution of how, when, and where we consume energy is not just a threat to utilities, but also an opportunity. Recent market developments suggest utilities are recognizing the value of energy management software for customer engagement that can direct consumption changes to meet their peak demand and efficiency goals. Navigant Research suggests the coming year will hold substantial growth in electric utility and energy provider investment of energy management software to drive greater customer engagement for energy efficiency savings and satisfaction.

Recent Developments

On November 3, Comverge announced a partnership with Apogee Interactive, Inc. Comverge stated that “When this solution is implemented in conjunction with Comverge’s number-one ranked demand response offerings, utilities can achieve unmatched cost-effectiveness by utilizing a single thermostat and engagement portal to drive both energy savings and peak reduction and can better engage customers by offering them increased control and visibility into their energy consumption.”

On November 13, GridPoint announced it has been acquired by TFC Utilities, a Washington, D.C.-based startup aiming to support regulated utilities in the process of modernizing strategy and procedures in light of industry transformation. The Company’s press release explained that “TFC Utilities’ business model is to transform regulated utilities with a commercial and regulatory construct that drives mass adoption of clean, low cost energy producing and energy saving technologies. The GridPoint acquisition represents TFC Utilities’ commitment to behind the meter technologies that directly benefit customers while also modernizing and enhancing the efficiency of the electric power system.”

A Tool for Compliance

The U.S. Environmental Protection Agency (EPA) released a fact sheet on energy efficiency alongside the publication of the final ruling on 111(d), or the Clean Power Plan. The EPA explains that states leverage energy efficiency to meet their clean power goals across the different outlined compliance approaches. Even as politics surround the EPA’s authority to regulate on climate change, utilities and energy providers are demonstrating their commitments to energy efficiency not only as a tool for hedging the potential regulatory risk, but also as a means of supporting grid reliability and resiliency.

Navigant Research suggests that energy management software is becoming an increasingly vital tool for promoting energy efficiency programs, tracking reductions in consumption, and improving customer satisfaction. On November 12, Direct Energy announced the acquisition of Panoramic Power, a device-level energy management solution. Direct Energy explained its perspective in a news release, stating “The commercial industry trend is moving toward more centralized energy management solutions with a focus on automated energy data collection and reporting, which is why Direct Energy aims to seamlessly incorporate Panoramic Power’s technology and analytical expertise into what we offer our growing customer base.”

The cost-effective deployment of energy management software has been proving its business value to customers directly (check out the Navigant Research’s Building Energy Management Systems report for more information), and market activity shows strong indications that utilities want in the game. Looking ahead, there will be winners in the marketplace, and intelligent, easy-to-deploy devices may help accelerate interest from utilities. These recent developments are driving the Navigant Research expectation that even more momentum is developing from the acquisitions and partnerships between utilities and technology providers.

 

The Future Workspace: Intelligent Building Platforms and Employee Engagement

— November 11, 2015

The proliferation of smart phones and the pervasive use of smart phone apps in the workplace have created new opportunities for occupant engagement. Beyond comfort, smart phones also generate economic and business benefits toward building operations.

Advanced sensors, wireless gateways and communications, and building energy management systems (BEMS) have already made the smart office a reality. These technologies give building owners and operators unprecedented insight into equipment performance, space utilization, and occupant feedback. Because of this, intelligent buildings can leverage ever growing data sets to become dynamic workspaces. Buildings are now more energy efficient and productive than traditional office buildings ever have been—and they are also more comfortable.

Smart Offices

Information technology platforms in intelligent buildings can fine-tune everything from heating, ventilation, and air conditioning (HVAC) to lighting to conference room scheduling. Technology innovations such as the Internet of Things (IoT) that enable these advances in operational performance leverage open systems that integrate automation hardware, software, and services. The IoT is an infrastructure for aggregating, transmitting, and analyzing data streams while ensuring cyber security and delivering domain-specific insights. The IoT is a potentially disruptive market force because the framework unifies data that has been historically isolated to generate comprehensive information about related systems.

In the intelligent buildings context, the IoT provides a structure to generate and share actionable insights for system improvement, which may take the form of fine-tuned lighting or HVAC settings. IoT platforms are scalable and secure to support software analytics that identify potential improvements for energy savings, operational efficiencies, and increased occupant satisfaction. Using these IoT platforms, intelligent building decision-makers can access more unified and comprehensive information about the performance of their individual facilities or portfolios.

This platform approach has changed the paradigm for building operations and maintenance in intelligent buildings. Cost-effective sensing devices gather granular building data ranging from equipment settings and performance to temperature and humidity. Wireless networks and open protocols can then transfer this data into a cloud-based BEMS that runs the analytics to prioritize system improvements. In some cases, a BEMS can push automated adjustments to building systems.

Accessing data and providing actionable insight in real time enables advanced management strategies that include predictive maintenance, proactive capital planning, and rapid response to occupant feedback. These processes provide greater efficiency and reduction in peak demand charges, so building system performance can be optimized and yield economic benefits in the form of reduced energy bills.

Intelligent Building Innovations

The process of transforming a facility into an intelligent building is scalable and cost-effective—and a different business engagement from the traditional equipment overhaul or deep renovation. Developing an intelligent building means gaining insight into its existing systems, improving their performance, and leveraging IT-based, cost-effective solutions to supplement the existing infrastructure.

One pioneering concept in the intelligent building space is using people as sensors. An example is Comfy, designed by Building Robotics. Comfy connects existing HVAC systems in office buildings to the cloud through Intel-based intelligent gateways. The system utilizes feedback from individual occupants through a simple smart phone app that analyzes the comfort levels in an office and then refines HVAC settings to optimize the workplace environment. This new approach to occupant comfort is changing the intelligent building workplace.

For a deeper exploration of this topic, tune in on November 17 at 2:00 p.m. EST for Navigant Research’s webinar Smart Offices: How Intelligent Building Solutions Are Changing the Occupant Experience. Joining me will be Shuo Zhang, Business Development Manager at Intel, and Andrew Krioukov, CEO of Building Robotics, who will give insight into how intelligent gateways and smart phone apps are transforming the smart office.

 

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