Smart Building Business Case - Part II

In our last blogpost we discussed the rapid evolvement of smart building technology such as IoT and the fact that contrary to traditional belief, the biggest value proposition of smart buildings are its employees. However, what other businesses cases are there for making investments in smart buildings and what are the potential savings resulting out of the investments?

Operational Space & Facility Management

The reduction of operating expenses is the most logical implication of turning buildings into smart ones. On the one hand, operational efficiency can be boosted, because the data extracted and analysed from sources such as sensors or Wi-Fi reduce reduce the need for manual involvement in optimising energy usage in buildings. Operational costs such as cleaning can be optimised by aligning maintenance efforts with actual usage of workspaces. Furthermore, demand-driven heating, ventilation, and air-conditioning control (HVAC) optimisation lead to decreased energy usage and therefore, fewer costs and equipment needs. As we have mentioned in Part I, the real estate firm JLL suggests applying the 3-30-300 Rule™ - $3 per sq. ft. per year for utilities, $30 for rent, and $300 for payroll - when estimating business expenses. The diagram below shows an application of the rule, with calculating scenarios where savings can be made. For example, if 20-25% energy savings can be made and the office space has a total of 120’000sqm, this means that on $3 per square meter a savings potential of $72’000 can be realised.

Strategic Space Management

With the analysis of data over the entire portfolio, risk management can be improved. Based on objective data management, capabilities can be enhanced and faster, data-driven decisions can be made across the entire portfolio. When viewing data of the entire portfolio, consolidation or growth potential over various sites can be identified. For example, the sharing ratio can be increased, which means an increase in 10% more space usage and 80 additional employees can be fitted in an existing building. Overall on $30 per square meters cost, $360’000 savings can be realised.

Workspace experience

Using the 3-30-300 model, JLL claims that the greatest financial savings from optimising a workplace do not lie in energy, but in productivity. Using the 3-30-300 model and assuming that employees can save 2 minutes (approx. 2%) each week because of not having to search for a free desk, $720’000 can be made due to $300 per square meters.

What Locatee Offers

Locatee Analytics is a smart platform for leveraging existing data sources to provide portfolio-wide insights by means of a cost-effective approach to create occupant-oriented office buildings. It enables a building owner/FM/CREM to know exactly what is going on in the building – energy usage, foot traffic, occupancy rates, maintenance requests, etc. – to make real-time and cost-saving decisions for future opportunities that cover your company’s individual use cases. The analysed data with Locatee has impacts on all aspects of the 3-30-300 model but sets the focus on the biggest leverages: strategic space management and workspace experience. Read our case studies from Biogen and Post, to discover the different use cases.

Key takeaways

The development of technology has augmented the importance of smart buildings and investing in them offers great opportunities. First and foremost, a dynamic, smart workspace is responsive to the needs of the people who work in it, creating a better work environment und in turn, increasing people’s productivity. Investing in smart buildings requires high assets, but it also offers the opportunity for great returns. The diagram below shows just a fraction of savings that can be realised when making investments into smart buildings and reducing energy costs, optimising sharing ratios and improving the workspace experience. Discover your individual use cases and what other potentials can be realised. 

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