Category: FM Growth

On 4th Mar 2020, The Ministry of National Development Singapore announced the revised edition of the Singapore Green Building Masterplan(SGBMP). The fourth edition of the SGBMP also known as “80-80-80 in 2030” due to its ambitious targets, comes as part of the Singapore Green Plan 2030. The plan is developed by the Building and Construction Authority (BCA) and the Singapore Green Building Council and industry stakeholders.

Singapore has been leading the efforts to reduce the greenhouse gas emission from the build infrastructure. Since the launch of the green mark scheme in 2005, BCA has initiated various programs to create an economically and environmentally driven ecosystem of stakeholders to charge the green building movement in Singapore. 

80-80-80 in 2030 : Quick overview

Since the first edition of SGBMP in 2006, It has been receiving immense support and collaboration from public and private enterprises to make a success. The latest edition of SGBMP is a result of their engagement activities with more than 5000 stakeholders since Jan 2020. 

SGBMP come up with 3 aggressive targets, to accelerate the adoption of green building technology

1. 80% of singapore’s building to be green marked

As per the last edition of the SGBMP, the goal is to green 80 percent of buildings by gross floor area (GFA) by 2030. But with the revised edition the government wants to accelerate the pace of greenification. Now the existing buildings can benchmark their energy performance against similar building types and take the necessary steps for energy optimization for asset maintenance.

BCA will also raise the ‘minimum energy performance requirements for all new construction and existing building stock from 2021 and subsequently the standards of the green mark scheme. 

2. 80% of all the new building to be super low energy building 

According to the definition, super low energy (SLE) are the buildings that achieve equivalent to 60% energy savings over the 2005 building standards. The Government wants 80% of all the new buildings from 2030 would be classified as SLE buildings. 

BCA has also published the required technology roadmap to achieve SLE building standards earlier. 

3. Achieving 80% Energy Efficiency improvement for best in class buildings

The 3rd target is achieving an even higher level of energy efficiency among top building assets. Till now, best-in-class buildings are able to achieve 65% improvement in energy efficiency over 2005 levels, with this target BCA wants to raise the bar to 80%.

BCA will support such a building through its Green Buildings Innovation Cluster (GBIC) program. 

What are the Implications of those targets? 

The latest targets have opened up a lot of opportunities for the entire Energy Efficiency ecosystem. From material procurement, design, resource management to electronics and smart technology providers, everyone has a huge scope to excel and prove their value to building owners.  

• Thinking beyond low hanging fruit:

Since the inception of SGBMP, many buildings have incorporated green building strategies to participate in the plan and have shown considerable improvements. As per the stakeholder’s engagement report, 90% of respondents are aware of the positive impact of green buildings and recognized them as a key strategy to fight climate change. 

However, an equal number of respondents believe that more urgent measures need to be in place in the next 5-10 years to achieve the super low energy building status. It’s time to think about the goals and technologies of the long-term improvement and find sustainable facility management solutions.

• Asset and space utilization:

From 2022 for existing buildings undergoing major retrofitting, will have to be 40 percent more energy-efficient than the 2005 levels, which has increased from 25 percent under current regulation. That additional 15% Improvement has to come from building operations as both the renewable energy sourcing and design retrofit options would have been explored to a certain extent. 

Most of the respondents suggested using smart control, space optimization applications, and data monitoring for preventive maintenance would help improve operational efficiency and better office space management.

This could be an opportune time for facility management firms to focus on asset performance and energy management suite of applications as the demand will see a significant rise.

• Demonstrate the value of data analytics

As per the Super low energy building SLE technology roadmap, Building energy management system (BEMS), Fault detection diagnostics system (FDD), Data-Driven Modelling and Real-Time Optimisation for Chiller Plant are listed under high energy saving potential systems. 

Startups and technology providers will have abundant opportunities to prove the value of their technology and grab the early market. From super-low energy building smart hubs to providing prototyping platforms, BCA is supporting such startups under their green building innovation cluster program.

What are your thoughts on this ambitious “80-80-80 in 2030” plan? Where does it stand compared to the global energy efficiency targets? Let us know in the comment section below.

We have also covered the UK’s latest performance-based policy to rate commercial buildings and the right approach to building benchmarking standards for CRE in our previous articles. Hope you find them insightful. 

The Middle East construction industry has been seen as an ever-growing ‘growth engine’ for multiple sectors ranging from hospitality, trade to property management. Despite the setback due to the pandemic and subsequent ripples on tourism and workplace adoption, the industry has shown a massive comeback in the first quarter of 2021.

The UAE’s facility management market was valued at $14.5 billion in 2020 and is expected to showcase a CAGR of 10.8% by 2030. In many ways, the facility management landscape of MENA is far different than other global markets. One can witness the unique equations of multinational and regional firms there. While multinational firms bring in their cross-market expertise, standardizations, and service benchmarks, regional firms provide Ultra customized, cost-effective solutions with low turnaround time. 

In the past couple of years, we have witnessed that the IFM market in The Gulf Cooperation Council (GCC) is getting closer to a consolidated stage due to the increasing competition and presence of many players in a concentrated geographical region. 

Many multinational FM service providers have adopted various growth strategies, including mergers and acquisitions, aggressive expansions, and joint ventures with local service providers to strengthen their position in this market. Yet they are facing fierce competition from the homegrown players. In fact, in many aspects, those regional firms are proving more successful in their endeavors than the global ones.

In a pursuit to understand those critical functional traits of successful regional facility management service providers, we analyzed the leading facility management firms based on their recent activities, type of contracts, product/service portfolios, and their organizational value systems. In this article, we are trying to present our learnings and takeaways to everyone.

Agile structure: 

According to McKinsey’s report, there are five key trademarks of an agile organization which focuses on the strategy, structure, process, people, and technology part of the business. We observed that most of the regional facility management firms exhibit at least 3 to 4 such qualities.

During the first wave of COVID, many firms responded quickly to prevent the spread of the virus. In such difficult times, firms like Imdaad quickly acted upon robust strategies to get closer with their clients and ensure continuous and hygienic operations of their facilities.  

Contactless applications to remote asset management, In the last 12 months many firms have rolled out technologies at an unprecedented speed. FM firms have realized the opportunities for product portfolio expansion in the area of energy management, predictive analytics, and mobile engineering teams. Interestingly, firms are doing the same without exposing their capital investment by building everything from the scratch. 

Strategic partnerships with technology startups are helping them to leverage mutual expertise and gain that competitive edge. While multinational FMs are investing heavily in R&D to develop their own technology stack, regional firms are focusing on getting into JV with a tech company and white-labeling the solution for their customers, maximizing the coverage with limited exposure to capital.    

Customer-centric approach:

While we all have been a part of a transition from an outcome-based to an ‘experience-based economy’ this is particularly very evident in UAE and the entire MENA region. Maybe because of the exponential growth of tourism or cosmopolitan and millennial workforce, clients and tenants are expecting seamless experience more from the facility management teams. 

Forward-thinking facility management firms are not stopping by creating help desk or service centers but also investing in human-centric technologies to deliver uninterrupted experience. Firms like Ejadah Asset Management Group have started a dedicated division to focus on ‘customer-centric operations’  under their new initiative. Biju Nair, head of a customer experience, Ejadah recalls the meeting they used to conduct every month to discuss the pain points of each individual facility owners and corrective actions to take, eventually, this exercise helped them to improve their Net Promoter Score from 54 to 72 within two years last year Ejadah was selected as a finalist in the Customer Centricity World Series 2021 awards. 

Upskilling the workforce:

Multiple studies have demonstrated that employee upskilling has a positive influence on Facility Management’s performance and improving their bottom line. Besides skill development, there are other benefits of upskilling such as employee retention and higher productivity of the teams. No wonder smart and lean facility management firms are giving special attention to cross-skill or upskill their workforce through training and capacity-building workshops. 

Upskilling becomes even more relevant for soft services due to the sheer number of blue-collar workforce. Chris Roberts, CEO of Eltizam Asset Management Group, strongly believes that sustainable business growth can only be achieved by focusing on the development of its people and processes  (organizational development), customer happiness, and ensuring efficiency in operations. Hence every senior management employee has to go through their relevant training programs. They also support their employees for a higher degree of education.  

Firms like Transguard have gone one step further the show their empathy towards the blue-collar workforce during the pandemic by taking the voluntary pay cuts. Note that this is the same firm that has already accomplished net zero emission targets for one of their fasciitis in UAE, a feat even multinational FM firms would find difficult to execute.  

To summarise, successful facility management firms are lean and quick in their decision-making process. For them, employee welfare and customer experience are always on their priority list, and most importantly they strongly believe in strategic partnerships and constantly updating their technology stack to be able to provide relevant solutions to their clients. 

Let us know how your company is working on its asset performance management and updating the technology stack.

#CREate FM 25 Talks is an interview series with CRE change-makers and Doers. With this, we intend to bring out first-hand experiences and best practices on digital transformation, energy management, and sustainability initiatives from industry leaders.

Brief about Shailendra Nath,
A real estate professional with over 2 decades of experience spanning across industry segments, corporates, developers & consulting. His strength lies in the area of facilities management, operations, client management, contract management, and ESG. He has always been passionate about technology and this drives his current interest in Proptech. Throughout the career, he has deployed various strategic projects across different geographies and the Project scopes ranged from technological solutions, supply chain, and organizational structuring initiatives.

Q.1 Can you tell us about your current role or the projects you are handling?

Currently, I am involved in a consulting assignment for a US-headquartered tech firm. The project involves a review of their global real estate operations and contracting environment and support development of a new globally aligned scope on principles of Vested^® 

So one of the focus objectives of this assignment is to help them streamline and standardize the Scope that they are operating or the way they operate the real estate piece across continents. The second part is to explore opportunities within their operations as to how they can enhance their outsourcing partnerships and thus bring in more value to the organization. 

Q.2 Everyone wants to be a part of the change but in this entire process, the thin line between ‘business need’ and ‘want’ is getting blurred. How can a facility manager ensure that particular technology or platform is ideal for his facility?

I would say the FM industry is such that, while we equally manage a lot of costs and risks both, the spending on every real estate resource (staff, O&M teams) is always under pressure and that also implies that we are not always working with the most skilled people on the ground.

“Any tech solution or software can work or will be successful ONLY if the last man on the ground is able to use it and is capable of using it.”

So the first pieces that I think organizations need to figure out whether they are ready for it and before calculating the cost of Technology there may be an impact in terms of the quality of resources that they need to get on the ground to be able to utilize it fruitfully with an appropriate awareness of it. 

 Coming on to the next aspect in terms of requirements. There is a very diverse range of products or solutions that are available in the market having said that it is very important to first have an inside look as to what is really important for you. 

Two different organizations may be in the same business area, which could be the ITeS sector or a banking sector or whatsoever. The business requirements may be different, the portfolio structuring may be different and hence the need for your technology will also be different. One solution may not be suitable for every business or every portfolio. You have to be clear as to what you’re really looking for and then get into the product selection mode. 

From there it comes to I think one of the biggest hitches of spending cost and a solution. So today most of the service providers or solution providers do have a SaaS model. That’s a really desirable way to go forward. So that you are not locking in the capital, you can be flexible so that if at all your first trial fails, it’s not that you have sunk in too much or you just get stuck to something for life, right? 

So I think these are the first few initial steps that one really needs to think of before even getting into a tech selection or implementation. 

Q.3 Whether it is a point solution or the platform? Arriving at the ROI calculation could be difficult. So while selecting such products besides cost what factors should be considered to decide the Impact of the solution?

So outside of cost, as I mentioned earlier, your product selection should keep into consideration your business requirement. Because each Product suite that I have come across tends to have a weak point and plus point/ general feature. Prioritize the business requirements and needs!!

For Example, If you’re in an organization where cafeteria management is very important. Then please select a portal or a solution that is very strong in cafeteria management. If you have a lot of meeting rooms to manage then go in for good hoteling software. 

“It’s neither essential nor desirable to get yourself stuck into buying a large product suite that has numerous features.  Most of them won’t work as great as a specialized one.” 

Focus on your important business needs, your functional day-to-day needs, and choose a solution based on that. If you say that one platform has 100 features and the other one has 120 features another has 150 features and you try to make a call on that then frankly. The reality is that you may never use all those features!

And the Top of that the real feature that you need may not be the strongest point of that platform. So you have already spent the time & resources and you’re not even able to do the most important job which your business needs the support. 

It may or may not be a niche solution as there are larger platforms with multiple features, but each of them has a different Focus. Each of them has a different strong point why you should choose the product which is where the strong point is relevant to your needs. 

If the requirement is very niche then you can consider getting into a custom solution, but it has to be done with a lot of thought and a lot of introspection. It cannot be an overnight job that you can roll out a solution within a week.

Q.4 I am glad that you touch upon the topic of Build Vs Buy, So if we segregate the entire value chain of building analytics solutions from data collection to providing insights. Which part an FM should build on or create differentiation and which to buy from the open market?

Unless you have a very niche solution expectation that is not available in the market that’s when you should go for a captive development. Even then I would suggest working with a solution partner because one task is developing the solution and the second Is maintaining the solution. So even if you develop something over time the solution will always require maintenance, modifications over the course of its lifetime, and as a one-time development, you will not be able to do that. 

But when you work with this tech partner, make sure that you have the right partner in place who doesn’t hold you to ransom later and helps you build the platform as time goes by. 

However, I would say almost 99% of cases. I would prefer to go for a ready-made solution because 

A) Those solutions have been developed over a period of time B) They are matured with the experience of every user who’s using that platform. So it’s not just your experience or your knowledge, which has been used to develop but from every user’s experience, and feedback is used to modify it further. 

It’s always desirable to go for a ready-made solution. Most of the inbuilt solutions in my past organizations, I have seen them struggle because when you spend a certain amount of money there are always some afterthoughts that come up as the solution gets rolled out within your organization as well. But then every update costs you money if it’s not in the short term then in the long term you may not have access to the developer or the development process which was used in creating that solution and you end up with an obsolete product, which is no more useful. 

Q. 5 Let’s move to the next question which is also around, cost-effectiveness. Instead of the current cost-plus model do you think performance-based contracts can help FM improve its operational margins? 

Performance-based contracts are certainly desirable, however, they cannot be a one-way street. If a client is expecting innovation, the cost of these has to be thought through as the FM partner will also need returns on their investment to implement such initiatives. The outcome expectation also needs to be balanced.

For example, if a contact says every year the FM has to reduce 2% of energy cost and has an incentive/penalty linked for that then he will do a 2% reduction per year only even if it’s very possible to do a 6% or 8% reduction in the first year. Upfront implementation would only benefit the client and expose the FM to penalties for the remaining term of the contract. Hence, the need to balance performance measurement. 

“It’s about the nature of the Contracting where the client also needs to be sensible about what they are looking for in the contract. I think the Contracting has to be done as a way to a means rather than trying to set up a penalty system.” 

If you’re only talking of penalizing then you’ll not get the best results out of your contract. 

There are leaders (both clients and FM firms) in the market who are getting into those kinds of contracts where they follow a partnership-based approach. They understand what can be achieved and what can not be achieved and wherever there are opportunities for joint investment, they collaborate also, 

Let’s say if you are targeting a 10% energy reduction then there will be Capital Investments that need to be made and there has to be clarity as to how that will be done and how the investment load and the return on investment should be delivered. 

If it’s a cost-plus contract the cost would have to be borne by the client. If it is a performance-based contract where certain targets have been agreed on and certain costs have been agreed on to reach those targets then the cost will be borne based on that model, which is agreed. Could either be the service provider or the client whatever the contract conditions say. 

There was a time when we were all working on Excel sheets and tally came as a game-changer, which is today moved on to ERPs. I don’t know how many of the organizations when they have rolled out those financial ERPs really been able to justify their RoI? 

Ultimately, it’s not about the cost, It’s about the control of information and enabling decision-making based on the information that is available. Accurately captured data will enable correct information which in turn supports timely decision making for the RE Manager and also the CXO’s.

We are living in times when every organization wants to be perceived as a tech-enabled company. For Agriculture, we have Agritech. For finance, we have fintech similarly, from mining to transportation every conventional and forward-thinking firm wants to be known for their technology innovation. 

This is understandable and appreciable, however, there is one industry that is following the same thought process yet creating an example by putting their people at the front. Innovation that is delivered by the people for the people. 

Yes, I am talking about the facility management industry and its strong bonds with its workforce and staff. 

“Connecting People & places, perfectly.”

“Achieve your ambition”

“We are a force for action”

“People make places”

I am sure you must have recognized these taglines of leading facility management firms that are reflecting the immense respect and importance they have for their human resources. A trait that has been seen in legacy organizations that last for centuries.  

Well, In this blog we are going to discuss one specific firm that is celebrating its 120th anniversary this April. A firm that has seen world wars, the great depression, numerous epidemics (financial and health-related) and it stand stronger and growing and molding with the change. You might have guessed it right it’s ISS facility services, a facility management services company founded in Copenhagen now serving the world. A company that was started as a security provider now has evolved into an integrated service provider with offices in 30+ Countries and 59,000+ clients across various industry verticles.  

In this blog, we are trying to touch upon some of the innovative projects ISS facility services teams have delivered for commercial real estate clients.

Smart Energy Management

A multinational firm wanted to start a smart building program across its sites, which can analyze and monitor the energy performance of all its buildings. Importantly it was part of their 2030 Sustainability roadmap.

The team at the ISS introduced the Clockworks Fault Detection and Diagnostic (FDD) solution, to the client and Integrated the FDD solution with the native Building Management Systems. With this, the system analyzed granular data from HVAC, Chiller, compressor, and boilers to provide energy-saving insights. 

The team implemented the energy-saving measures and helped the client to save $202,000 per year while achieving the ROI of one year. 

Sustainability and building management

A global IT company wanted to meet Its published sustainability goals by reducing its annual energy consumption and creating a productive and efficient workplace.

ISS’s facility management team deployed a fault detection diagnostic solution over the client’s 15 buildings. With proactive maintenance schedules, they manage to carry maintenance and repair work on off-hours without disturbing the client’s workforce.

With all the solution implementation efforts, ISS helped the client to save $372,000 in annual utility costs. With all the proactive measures it also able to reduce the cold reactive call by 95%. In total, the savings help the client to reduce their operational expenditure by 10%. 

Mobile engineering

A multinational corporation wanted to outsource technical and maintenance-related services for their US locations. With this move, the client wanted to replace the existing in-house maintenance team and other outsourced vendors which will reduce operational costs and increase efficiency. 

With the proactive team of trained professionals, the FM team carried out a comprehensive maintenance strategy for energy-intensive assets and Implemented their own workplace management application FMS@ISS to reduce the response time and reactive calls. 

34 technicians were available to the client on-demand basis, who helped them save $579,000 within 5 months while delivering 100% in-scope services.

Customer experience and Productivity

A tech company was on a mission to create a great and engaging workplace experience for their employees, customers, visitors to help them improve their productivity and satisfaction at work. Note that the firm was part of FORTUNE’s “great place to work for” list.  

ISS’s FM team appointed workplace Experience Managers, an entirely new post to boost employee engagement and productivity. It also implemented ISS’s flagship workplace management application FMS@ISS at clients’ locations and offered ancillary tools such as Capital planning and brought financial transparency. 

As a result client’s work environment was ranked A+ and the customer’s retention score was improved to 72/100, which was based on salary, benefits and workplace environment.

There are many success stories, from ISS facility services where they have proved to be a people-centric organization that is excelling and innovative in every aspect of facility management from technology to business model innovation. If you like these success stories then give a big shout-out to the ISS team and congratulate them on their 120th anniversary. To read more about them click on this link.

On 17th March, Department for Business, Energy & Industrial Strategy, UK recently released a proposal to introduce a performance-based policy framework for rating the energy and carbon performance of commercial and industrial buildings in the UK.

According to the framework, commercial spaces of a size larger than 1,000m² will have to declare their annual energy consumption in order to achieve the energy ratings. This will be a mandatory exercise for all the eligible buildings, which according to a survey covers only 7% of the commercial properties in the UK but responsible for 53% of all the energy consumption in commercial and industrial buildings.  

The framework came on the backdrop of the UK’s pledge to achieve net-zero greenhouse gas emissions by 2050. This will complement or rather add more value to the existing Energy Performance Certificate rating (EPC) and reproduce NABERS’s performance benchmarking structure for building in the UK. 

The BEIS is following a consultative approach to hear from building proprietors, occupants, landowners, investors, asset management consultancies. Since this is a highly celebrated step by the UK Government, we thought of sharing a breakdown of the framework and key takeaways for the quick read.      

1. The advantage over ECP:

Energy Performance Certificate (ECP) has been there for a long time to evaluate the standard of the building’s fabric and services. However, when it comes to energy consumption or emission, evidence suggests that there is almost no correlation between a building’s EPC score and its actual energy and carbon performance in practice. It’s a difference between theoretical modeling and practical energy usage. Hence there was a requirement to develop the framework that counts on ‘how the building has been operated and not just designed’. Performance-based schemes place the occupant at the center of the equation. In order to reach a fair assessment, performance-based schemes will typically look at a building’s energy intensity on an m² basis (in order to standardize for size) and factor in the building’s operating hours and the number of people using it.

2. Dynamic benchmarking:

Unlike other green building standards and certificates, the Proposed performance-based rating system is dynamic in nature (types of building benchmark) and needs to be renewed annually. Energy use and carbon emissions from a building will be benchmarked against similar building types and rated on a scale of 1 to 6 stars where 6 stars could represent the best and 1 the worst. 

3. Transparency in assessment:

Eligible buildings would need to disclose their performance score to everyone, which will make sure that the large businesses and organizations are transparent on their environmental commitments and ready to make informed decisions to improve them further. Building owners or tenants can voluntarily choose to share their first year’s rating with the public however from the second year onwards they will be obligated to share it with everyone. Although most of the global organizations publish their sustainability measures through annual reports and participating in EP100, RE100 or other target-setting initiatives this mandatory policy will bring that transparency to mid-size businesses.    

4. Incentivizing Performance:

The government believes that the framework will help investors, tenants, building owners take that extra step to improve their building’s performance which can later be translated into increased asset/property value, lower insurance premiums, or performance-driven financing packages, etc. government will also think upon rewarding those buildings who have improved the performance over the period of time or market-driven mechanism to penalizing low performing buildings.   

5. Adoption from the NABERS scheme:

NABERS, Australia has been one of the most successful performance-based schemes for commercial buildings. Since their inception office buildings in Australia have seen their energy use per square meter reduce by 38%, including a 34% reduction over the last decade. It measures actual impact (reduction of energy intensity) rather than predicted value according to the building’s design.

Ratings are primarily divided into two categories A) Base building rating which covers the performance of central building services, for individual tenants controlling a particular portion of the building. B) ‘Whole building’ rating to measure all the energy use in the building, ideal for the building owner/occupiers or single tenants

With this framework, the building’s performance rating will showcase how the building is performing, on emission indicators against similar building types to prospective buyers and tenants providing insights on the running costs they can expect if they occupy the building. A performance-based rating will provide more reasons and data points to a potential buyer to make a precise and reliable purchasing decision.

Are you managing any properties that come under the eligibility criterion of this scheme? Do you think this type of national-level benchmarking will create a market-driven environment to accelerate the adoption of energy efficiency measures in commercial buildings? Do you think your building needs a building analytics software for energy efficiency? Let us know your thoughts.  

Let’s consider a scenario where you have been bidding for the FM contract for a particular facility, you have all the necessary details on the scope of services, KPIs, and work plan provided to the client or property owner. Then the news comes out that you have finally won the contract and you will be managing the facility for the next 3 years. 

What will be the first thing you would do? You have been competing with other FMs to reduce the cost of services which makes it obvious that it has to be related to budget planning. How much will you invest in O&M to get the committed performance? Or how will you ensure your investment is getting paid off?

Well, as far as budgeting for digital Initiatives which takes care of O&M is concerned there are a couple of ways one should plan investment activities for successful returns. In this article, we are going to highlight those 5 practices for effective budget planning.

1. Stage investments

Once you assess the entire facility you would get to know that there are a few add-ons you would be needed to get the complete picture of asset operations. It could be installing more sensors, communication devices, or retrofitting existing ones.

List down all the changes you would like to make to the existing asset data management systems and divide the investment into 2-3 stages based on the purpose it solves or budget it requires. Now correlate it with your other digital initiatives and ensure that every round of investment has maximum benefits before going to the next one. 

2. Application / Platform or both

It all starts with how you are planning to manage your asset and operations data. In most of the facilities, there are different ways to maintain process or asset data. for example, there will be different applications to manage asset maintenance, inventory for the spare parts, work order or help desk. 

Also, each facility has Its own challenges and targets when it comes to asset performance. Hence it’s up to the facility manager whether he wants to go with a point solution that focuses on one or two use cases only or the integrated platform which can take care of managing raw data and providing insights via multiple modules.

Of course, both the options have their flexibility, scalability and open integration difference and the FM should consider them all before budgeting for the same.     

3. Always go for Pilots 

The building analytics market is growing tremendously day by day. Numerous innovative solutions are entering the market. Some of them are backed by mighty legacy players and the rest are bootstrapped startups. Being the nature of innovation, finding a proven solution in a niche area could be difficult as most of the solutions wouldn’t get that first leap of faith from the client. 

This is more of a change management decision rather than the functional one. It’s highly recommended that every FM team should have allocated resources and planning to engage with startups on various initiatives. Starting with the small-scale APM pilot project gives the needed visibility and confidence for the application to scale in the future.  

If you remember, We have already addressed our thoughts in a two-part series on how to plan and execute APM trials.

4. Allocating Workforce upskilling

Any Digital transformation initiative would require upskilling of the staff without which it is a complete futile initiative. It’s not just technical skills but also people management that plays an important role here. The workforce should be well equipped with the knowledge and benefits of the new application that has been implemented hence the training or upskilling cost should be factored in while planning for the yearly budget. 

5. Data migration costs

This is one of the highly ignored areas of planning which often surprises with hefty cost components. Let’s consider you have been using a proprietary BMS dashboard to monitor your HVAC network. Now you come across an insightful application that does a lot more than your proprietary dashboard and now you would want to transfer your raw data to the new application want to build the data connector. Since your old BMS did not come up with a data-sharing feature or cost an additional license to transfer the raw data then it can be a big headache and hindrance to the process. 

This could be a big problem if the data is not being centralized and stored in different applications. If the data transfer is not cautiously monitored then there could be a loss of data in the process, hence all care to be taken. 

Budgeting for the FM’s digital applications is a multi-layer process. There are operational, technical, and behavioral components that influence the decision-making process. It is important to check whether every investment/budget-related decision aligns with the long-term digital transformation goals and adds value to the O&M team’s efforts.

In the initial days, sustainability was only associated with having that ‘feeling good’ attitude for the future generation or helping society to reduce carbon emission. It felt like a moral responsibility to environmentally conscious people which later translated into duty and activism. 

“Climate change is real, it is happening right now, it is the most urgent threat facing our entire species, and we need to work collectively together and stop procrastinating,”  remember these famous lines from the acceptance speech by none other than Leonardo DiCaprio? He delivered a sensational speech when he received his first-ever oscar for the movie Revenant.      

It brings goosebumps to hear him out on sustainability and climate change. Of course, we all have been witnessing some of the unpresidential climate tragedies in recent times whether it’s a wildfire or sinking an entire Island due to rising sea levels. It will continue happening unless we limit the rising global temperature to 1.5 degrees celsius by 2030-40.

For global businesses, it was their social responsibility to invest in environmental initiatives and practice sustainable supply chain targets. But in the last 1-2 decades, those businesses, local governments and non-profit organizations have successfully created an ecosystem where sustainability is closely associated with profitability. 

Initiatives such as EP 100, RE 100 have made businesses pledge to reduce their resource consumption and go for renewable energy sources. For commercial buildings, there are numerous certification and standardization bodies such as LEED, IGBC, GBC US, that are providing guidelines for sustainable building management and also to design sustainable buildings. 

From an operational point of view now sustainable buildings have more opportunity to attract investors, tenants. There are multiple studies that suggested sustainability has turned into profit centers.

According to the sustainable building market study by Ramboll,  95% of respondents believe that sustainability is important for successful business operations. 

Drivers for Sustainable building:

Clearly, there are multiple drives that are responsible for bringing sustainability to the mainstream.  

• Operational efficiency and savings
• Reduced risk and capital cost
• Increased market demand
• Higher property value

One of the most important drivers of sustainable buildings in a market economy is the financial benefits. Investments in energy management and resource efficiency solutions have resulted in reducing operating costs during a building’s operation. According to the same report, 50% of the respondents have actual experience of achieving operational savings up to 10%.

In addition, sustainability throughout the total life cycle of the building can be now assessed with smart building technologies ensuring long-term visibility on environmental effects. The emergence of Building Information Modelling (BIM), digital twins and cloud technologies have shown new ways to improve operational efficiency.  

Advantages For facility management teams:

While sustainable buildings are valuable for a property owner they are also equally important for facility management teams.  

• Sustainability initiatives can give them the opportunity to expand their energy management services and commit energy-saving targets with shared benefits.
• It can open doors to strategic asset performance management services for better asset maintenance  
• Advisory services for building standardization and green certifications.
• As mentioned in one of our previous blogs on ‘Net-zero benefits for Facility management firms’ sustainability initiatives can help FM firms get into a strategic relationship with the client’s top executive team. 

Once the team is confirmed on benefits and investment on sustainable initiatives there are numerous ways to make a facility sustainable – building designs, retrofit solutions, operational sustainability, renewable energy sourcing. 

Since most of the FM contracts are responsible for managing existing building infrastructure we are going to list down initiatives that can help them to improve the operational sustainability of the building. 

1. Create Assessment Framework: 

Set clear and actionable SMART goals (Specific, Measurable, Achievable, Realistic, and Timely deliverable goals). Align them with the client’s yearly O&M contracts or digitalization initiatives.

Identify KPIs the team would want to work on, accordingly come up with dynamic benchmarks on per capita resource consumption, energy intensity, etc.

2. Technology stack:

Understand what kind of asset data is being monitored, applications/tools that required to analyze raw data, and provide actionable insights on use cases such as energy management, predictive maintenance, Fault detection diagnostic (FDD) for improving operational efficiency. 

3. Change management:

This may sound cliche but it has been observed that teams with proactive leadership have aggressively achieved their sustainability goals. It is very important to understand stand why we have set up those goals and how to effectively communicate them with all the stakeholders.

So, what are the key initiatives your Facility management team has taken for the year 2021? We would love to hear from you.

Do you remember, what was the first subscription-based software you purchased to manage operations at your facility? It might be a CAFM or CMMS application, and how was your experience with it? I bet it must be great! After all, there was a tectonic shift from traditional license-based desktop software to a subscription-based cloud application. 

It gave you accessibility to manage assets from anywhere, reduced the burden of in-house IT teams, and also, there was low CAPEX-m involved. Well, That’s the revolution Software-as-a-service has brought to the facility management sector in CRE. Now there are multiple SaaS applications available, starting from space management, logistics to workflow.

If we look at the healthcare, retail, or E-Commerce sector SaaS (anything-as-a-service) has already penetrated and explored various service delivery mechanisms, and more importantly, customers are driving the growth of such offerings.

For example, retail clients who have used efficiency-as-a-service have paid for the performance, a financial service mechanism that allows customers to implement energy and water efficiency projects with no upfront capital expenditure. In fact, it has been used in many utility companies that are working closely with industrial consumers.         

XaaS finding ways in CRE

Then there are other offerings too such as space as a service (SaaS) and lighting as service (LaaS) which have sneaked into the commercial real estate sector and received a warm welcome.   

It’s not a surprise that most of the facility management companies are running on paper-thin margins today. They are looking for ways to cut down their operating expenses and find ways to cross-sell or upsell their services to clients – property owners who have already faced the wrath of lockdown and subsequent low occupancy rates.  

In this situation, neither the property owner nor facility management teams can afford to spend a handsome amount on revamping technology or digitalization drive even if it’s needed now but, there is a way out. 

Performance-as-a-service

In a typical facility management contract, there has to be the precise scope for facilities management services to be performed by the service provider along with the relevant Key Performance Indicators (or KPIs) which the service provider is required to achieve.

As most of the contracts are either unit pricing or lump-sum contracts, winning facility management companies bid on the low prices and commit to delivering certain services. A major drawback in such contracts is the saving potential of the facility or assets often remain underutilized as there is no incentive on it. While performance-based contracts are more focused on creating value with limited resources. They are meant to monitor the operation of the facilities against set targets and identifying opportunities for improvement. If a service provider is able to save on energy or resource consumption then he can enjoy the shared profit.  

Now imagine an offering where a service provider signs a contract for managing Operations and maintenance of the facility and utilize existing infrastructure and their own analytics solution to leverage existing data to deliver insights on energy management, maintenance, or asset life cycle?

Please note that the FM team needs to showcase the tangible savings or predefined clarity on operations and as they gain the confidence of the client, they move on with a broader plan covering the remaining data infrastructure and investment from the client.

This way facility management teams can get to work on their digital and technical capabilities while earning brownie points on savings. It would be a win-win situation for both parties.  

Despite technology being the driver of the new service model, it’s a strategic decision and not a technical one property owners may not explicitly come with such a plan but the facility management companies need to take the first step. They need to identify the opportunity to collaborate with technical service providers and build on their digital application portfolio backing their hard services. 

So as a facility management team, how soon would you introduce your performance as a service model? Can building analytics software provide a solution?