Real estate owners are increasingly pressured to develop new approaches to the way they run their buildings, which results in new opportunities for HVAC and other service firms adept in the newest technologies.
Technology is rewiring our expectations for how we experience the world, and buildings are no exception. Between the rise of co-working, the growth of the building wellness movement, the increasing imperative to reduce building operating costs, and the pressure to provide buildings with strong green credentials, real estate owners are increasingly pressured to develop new approaches to the way they run their buildings.
Building owners are turning to building services firms for assistance to meet these evolving demands. Historically, building services firms have established business models built around the hourly rate of engineers or maintenance professionals sent to site to reactively solve problems or to deliver to planned maintenance schedules. This type of model is too narrow, too reactive and insufficiently sophisticated to deliver the types of solutions that building owners and their stakeholders now require.
In today’s environment, it’s no longer enough to meet expectations — building services companies will also face pressure to differentiate and enhance their service offerings, or risk becoming obsolete. However, new opportunities are being enabled by building optimization— a data-driven approach to building performance management comprised of technology, people and processes.
Building Optimization technologies encompass a broad range of wired and wireless sensors for broader, faster and more accurate data collection. They also include software applications to consolidate, analyze, and report on building performance down to individual pieces of equipment to quickly identify faults and to provide remote teams with the latest information. Building optimization technologies enable building services firms to better maintain the operating efficiency of buildings while reducing building operating risks.
We found that adaptive building services firms have taken the plunge to invest in building optimization technologies. Of the 85 firms we spoke with, over one third are piloting analytics solutions. These firms are setting the stage to remain competitive in an evolving market. As part of our research, we spoke with a number of leading firms to understand how building optimization technology has impacted their business thus far.
These firms reported a range of benefits for their business, including:
- Improving the efficacy of delivering building services using software.
Data analytics software helps building services providers diagnose equipment faults that may not be easily found through traditional methods, such as short cycling of compressors or leaking refrigerant. These issues can require 24/7 monitoring to identify, which is difficult, if not impossible, to do using manual labor.
- Developing new value-added business models with technology.
Supporting cost-conscious firms in a traditional way through onsite engineers or engineer call-outs, services firms cannot offer substantial efficiency savings. However, some services firms are realizing efficiency gains with software that are facilitating a new type of service offering. New service models may include “continuous” or “ongoing” commissioning to help clients ensure their HVAC systems perform to specification through their lifetime, remote or virtual maintenance and repair services, and capital planning support informed by equipment data. These new service models are far more flexible and cost effective than traditional people-led service models.
- Managing risks associated with labor and skills shortages within the industry.
Almost every energy consuming asset is now being manufactured with digital connectivity as standard. Building services firms that invest in their workforce and provide them with the building optimization tools to operate and maintain these connected assets will gain first mover advantage in an industry on the cusp of rapid change. The US Bureau of Labor Statistics estimates that the need for skilled workers, such as HVAC technicians, will grow by 15% through 2026, over twice as fast as the 7% average of all occupations in this time period. Services firms that have invested in building optimization solutions will be well positioned to minimize the risks faced by the impending labor shortage, as fewer people will be required to remotely monitor and maintain a larger number of buildings.
- Protecting themselves from the risk posed by tech-savvy market entrants.
One of the motivations for larger building services firms to invest in technology solutions is to remain competitive. These firms are developing technology solutions for building optimization and training their existing employees on how to use these technologies to protect themselves from the threat of new tech-savvy entrants offering these types of services and seizing market share.
The digital era is transforming the face of business, redefining entire industries and making others obsolete. As digital transformation reaches the commercial real estate sector, all players in the building ecosystem will need to devise new ways of working to harness technological innovation. Empowered by building optimization technology, building services firms can manage the risks and seize the opportunities of the future.
This article was originally featured in Contracting Business and was drawn from The Building Optimization Benchmark Report: Technology Adoption in the North American Building Services Sector.