While the design and architecture of buildings has kept pace with these changes, the post-construction phase has remained static, continuing to focus on the functional and transactional aspects of buildings. But transformation is imminent, and here’s why.

Why we need to reimagine how we manage buildings

Today, rising operating costs of commercial buildings and growing competitiveness have become a concern for property owners seeking to streamline operations while addressing tenant needs and remaining profitable. At the same, the tech wave for smart and connected buildings has led to an explosion of low-cost devices and sensors that have largely added greater complexity to the already multi-faceted building operations. Also the ubiquitous focus on customer experience and a global increase in trends such as flexible workspaces and experience-driven retail outlets, has been driving the need to reimagine facilities experience into one that is modern and engagement-driven.

Today, rising operating costs of commercial buildings and growing competitiveness have become a concern for property owners seeking to streamline operations while addressing tenant needs and remaining profitable. At the same, the tech wave for smart and connected buildings has led to an explosion of low-cost devices and sensors that have largely added greater complexity to the already multi-faceted building operations. Also the ubiquitous focus on customer experience and a global increase in trends such as flexible workspaces and experience-driven retail outlets, has been driving the need to reimagine facilities experience into one that is modern and engagement-driven.

Why NOW?

Given the ubiquity of buildings in our lives, and how they impact our emotions and productivity, from the experiences they create to the comfort they offer, from the resources they use to the cost of running them, we have historically paid very little attention to the post-construction phase of how these structures are managed.

The post-construction phase of a buildings lifecycle has a high impact on the human capital, natural resources and financial resources used to run the building. Globally, the industry employs an army of people, environmental resources and money to maintain and manage buildings. At the same time, this post-construction phase of buildings is tech-deprived, inefficient, and fragmented, resulting in massive wastage of all three resources.

The $2+ trillion current spend for FM, Energy & BAS holds a massive opportunity to create VALUE, to the tune of billions of dollars, through optimized efficiencies in all the above areas. Therefore there is a pressing need to look at this phase of buildings seriously and solve these inefficiencies to bring in tremendous impact on the largest group of workforce, on environment and financial strength of real estate. Lets look at these challenges a bit in detail.

• TALENT

  Lowest Labour Skilling: FM has among the largest workforces and yet some of the lowest productivity gains among comparable industries. Despite the great effort they put into their demanding jobs, the productivity and salaries of this workforce are among the lowest - up to 10-15 times lower than other comparable industries. A lack of synergy, outsourced, multi-contractor workforce and the absence of a unified view of operations are some of the challenges they face. Tech-enabled assistance, in the form of a centralized view of operations, greater transparency, upskilling etc. can uplift this whole segment (both employees & largest employer segment) and bring significant value creation.

• SUSTAINABILITY

  Depleting Natural Resources: Buildings are the world’s largest users of electricity, responsible for 41% of consumption, 30% of which is wasteful.

• FINANCE

  Heavy Capital Drain: 80% of the cost of a building is associated with its maintenance after completion. Inefficiently operating high-value built assets can significantly reduce returns over their lifecycle.

So yes, there is a dire need for transformation in the built environment. But what is the solution?

Automation, automation everywhere, but not a solution in sight

The current built environment and its management already uses a lot of automation, but the crux of why it is unable to optimize efficiencies lies in automation systems disconnected from FM operations.

Let’s look at how automation and FM operations co-exist in buildings currently.

Legacy solutions are sensor-heavy, siloed and disparate, limited to individual buildings, while also being cost and time intensive, as well as inflexible and static. They lack the agility and efficiency of real-time, data-driven operations, restricting operators to leverage data to anticipate events in the lifecycle of components and systems – thereby reducing FMs to ad-hoc fire-fighting rather than truly systematic and predictive management.

The automation landscape, which has remained largely unchanged since the 1990’s, is still restricted by the following:

• Managing single buildings: Therefore a huge opportunity to deploy unified portfolio-wide visibility and management exists.
• Vendor lock-in: Stuck with the inflexibility of multiple vendors offering multiple systems, which are not connected, or talking to each other. Vendor lock-in restricts customers who are unable to evolve without incurring massive costs.
• Data silos: Multiple systems that are disjointed means multiple data pockets. This siloed data is largely useless and lacking context.
• Buried insights: With no connectivity, context or data analytics in place, the goldmine of data existing in all these systems is lying dormant.

While this is where automation stands today in the built environment, FM operations are currently labour intensive, reactive services; outsourced to multi-vendors, incurring high spend and using siloed tech.

So it is evident that the existing automation and legacy solutions are not in sync with addressing the challenges and needs of FM operations. And even more critically, these systems are not flexible or agile enough to future-proof these buildings to the impact of the disruption the built environment & the buildings industry is already undergoing. Facilities portfolios, therefore, are vulnerable to growing competition, likely changes in regulation for sustainability, ROI pressures, and the CX expectations of the millennial user.

So how can IoT and AI help?

Need for a data-driven, real-time and portfolio-wide management platform

Today there is strong need for real estate owners and corporates and enterprises with large real-estate portfolios to have an enterprise-wide platform to efficiently run their facilities operations across their portfolio of buildings. Working only at an individual building level, with out-dated, siloed tools like CaFM, BMS, EMS etc. is old school and is pulling down efficiency.

Additionally, most of the solutions in use today are not built for buildings and are rather industrial/mining solutions that have been re-purposed for buildings.

Parallel markets like on-demand cab hailing (Uber), room-sharing (AirBnb), food delivery (Zomato), e-commerce (Souq) etc. have leapfrogged in efficiency and scale by moving to data driven, real-time systems and decision-making. However the built environment has remained conservative in adopting technologies to unlock these benefits.

Innovative and next-gen tech like IoT and AI offer the advantage of enabling rapid transformation at scale.

An IoT and AI-driven software suite can complement existing systems, integrating seamlessly with any automation solutions being used. Essentially this layer of technology leverages existing infrastructure rather than replacing it, by utilizing the data it generates to add predictive analytics to real time operations.

And this data is owned by and controlled by the customers - the CRE owners – in essence putting them in the drivers seat to choose the direction they wish to take in terms of optimizing the performance and efficiencies of their buildings. Additionally, a portfolio wide enterprise platform ensures continuous efficiency and continuous sustainability across operations, eliminating pockets of waste and inefficiency.

Next steps: what the built environment can do to get started End-to-end enablement

With the transformative influence of technology gaining ground, CRE owners and FMs have a unique opportunity to seize the moment and gain the IoT & AI edge. And the path is adopting an end-to-end tech enablement solution, designed specifically for buildings.

But the beauty of an IoT and AI-driven software suite is that it also radically empowers existing BMS and CAFM solutions, vastly improving their strengths because of system wide transparency and data rich inputs. So whether CRE owners or FM’s or even CAFM & BMS providers – all can benefit tremendously by adopting an IoT and AI-driven software suite that builds on the strengths of existing systems while adding the “value” edge they are missing.

(The Author, Prabhu Ramachandran is the founder and CEO of Facilio Inc.)