IBM celebrated its Centennial in 2011. It gave us the opportunity to reflect on what it takes to be a great company and a great brand. To do that, we remain committed to being a leader in the markets we serve….. and a company that operates on a higher standard than just what is required by law or regulation… A company that continuously reinvents itself and creates offerings that have a positive impact on our planet. And nowhere is this more important than innovations that deal energy efficiency in buildings.
This Smarter Buildings presentation illustrates the real business value of doing more with less ways that benefits the economic, operational and environmental strategies of your organization. This represents IBM’s perspective on smarter buildings, one that will introduce you to 5 key project areas you may not have thought of when you think of a "smarter building".
Our Smarter Buildings discussion presentation will illustrate the real business value of doing more with less in a way that benefits the economic, operational and environmental strategies of your organization.
Thank you for the opportunity today to share with you IBM's perspective on smarter buildings, and how managing your real estate and facilities can help you create and achieve your goals around delivering a more energy, operationally and space efficient portfolio of buildings. Today I will share with you IBM’s perspective on smarter buildings, and introduce you to 5 key areas of IBM’s portfolio of offerings. As you know, IBM’s celebrated its Centennial in 2011. It gave us the opportunity to reflect on what it takes to be a great company and a great brand. To do that, we remain committed to being a leader in the markets we serve….. and a company who operates on a higher standard than just what is required by law or regulation… A company that continuously reinvents itself and creates offerings that have a positive impact on our planet. And nowhere is this more important than innovations that deal with environmental issues, such as energy efficiency in buildings. Our Smarter Buildings discussion today will illustrate the real business value of doing more with less in a way that benefits the economic, operational and environmental strategies of your organization.
Note to presenter: The intent of the 2 nd bullet ( Overview of client: present, pains, requirements ) is to give the client an opportunity to tell you where they are in relation to their goals and challenges for delivering a more energy, operationally and space efficient portfolio of buildings. Please do not forget to give them this opportunity, it will help you to identify areas of focus and emphasis through the ppt.
It’s time for change… this slide aims to set the political scene, highlighting that governments are taking smart building management seriously. Quote 1 - is from Chris Huhne (former minister of the environment, UK) – he is stating here that within the UK (and this also stands very well for Europe) there is in existence and utilisation, many old and beautiful legacy buildings that we need, technically, to bring up to date. To ensure that they are fit for purpose and not inefficient in terms of energy usage. It is the owner/occupiers of these buildings that need to focus on improving the performance of these buildings, it is no longer acceptable to hide behind the age and beauty of a building. Quote 2 – from President Obama – at the launch of the Better Buildings Initiative. The president emphasized that efficiency means less costly waste, and that the aim of the program would be to make commercial buildings 20 percent more efficient nationwide. This would reduce companies’ energy bills by about $40 billion a year, money that could be much better spent on hiring new employees and expanding business.
So who should care and what type of company is IBM targeting for the Smarter Buildings solutions? & 2 Companies with a large portfolio of buildings, who need to have visibility of all their buildings across the enterprise 3. Companies who have a focus on environmental targets 4. Companies with a requirement to reduce Operational Expense (OpEx) & Capital Expense (CapEx) 5. And finally, companies with ambitions for growth and innovation – this falls into two areas, 1) using IBM smarter buildings solutions will help you establish and maintain a portfolio of buildings that is fit for your business purposes today and in the future, providing the ability to flex in line with your business strategy. 2) Your employees will use buildings that enable them to innovate, deliver and grow your business. So who within your business should really care about the state of your real estate portfolio? The CFO: Oversees the finances of the entire company monitoring cash flow financial planning Real estate is the 2 nd highest cost to company. Corporate Real Estate: Operates property like a business. Responsibilities: Leasing &/or purchasing real estate Maintenance Accounting and reporting Repair Provision of utilities Space planning The Sustainability Manager Responsible for setting the company sustainability strategy Monitoring energy Environmental/energy audits Conducts energy and sustainability analyses Identify opportunities to increase building efficiencies, Understand financial impacts of environment on an organization’s operation.
Let’s look at the pain points found in many real estate/property management organizations Costs associated with buildings are constantly increasing and unpredictable, this is largely to do with: Properties within the real estate portfolio being operated as silo’s in terms of the buildings themselves, the systems and data within them. Business processes that require manual intervention Difficulty in having all the data and information at your disposal to really accurately identify the full cost of operating a single building, never mind your whole portfolio The introduction of new flexible working options many buildings are not being used to their full capacity Risks in terms of operations and reputational are always a challenge to any large enterprise, these risks are exacerbated by: Outsourcing activities to a 3 rd party and the loss of corporate knowledge that may occur The surprises and hidden cost of operating a building The burden of additional legislation The close scrutiny of sustainability performance from clients and customers, as well as other external parties. Innovation and growth are extremely important to any company, and are compounded by sub-optimal productivity which can be brought about by: Not fully understanding how your portfolio of buildings is performing because you are relying on information from many different and disparate systems, such as the building management systems Not exploiting the wealth of data that exists within your buildings that will assist you in your pursuit of business efficiency Having a wide variation in employee experience at each location Having employees more concerned about their sub-optimal work surroundings than delivering and growing their business requirements. There is a significant opportunity to respond to CFO pressure to “sweat the assets” by changing the business process and systems in the function (Note the issue of loss of control is a key issue for corporates who have outsourced or are planning to outsource). There is now a very real opportunity for real estate and facilities functions to drive strategic business value.
So if you look at the maturity curve – where do you sit? The vast majority of companies are starting this journey and embarking on the manage phase. A few are finding it difficult to progress out of the manage phase, and are looking for new approaches. In this space, IBM TRIRIGA, which is an integrated workplace management solution, can enable you to get greater control over your facilities data, systems, people and processes. Driving down cost and risk. To drive to the optimised phase you need to use your data in real time to enable improved decision making, improve reliability and increase return on investments. IBM’s TRIRIGA Energy Optimization can enable this progression from the managed to the optimize phase, by using real time data from your building, assets and external sources and applying analytics. IBM is currently researching solutions that will enable companies achieve true transformation. Research assets such IBM IBEE is enabling building modelling and predictive analytics.
So what are Smarter Buildings? There is a plethora of data that already exists within a building and its assets. IBM Smarter Building solutions use this existing data, apply analytics and provide valuable insight on the performance of your entire portfolio right down to an individual asset, and even suppliers – delivering well managed, integrated physical and digital infrastructures that provide optimal occupancy services in a reliable , cost effective , and sustainable manner. ie Smarter Buildings The automatic generation of work orders in response to continuous performance based monitoring means that the end user is notified when an asset is under performing before it is a problem. This improves the reliability of the assets – the no.1 priority for the majority of site operators! The work order management systems enables maintenance teams to identify which asset has an issue, where it is located, whether it is under warrantee etc, before they leave their desk, resulting in a dramatic decrease in the numbers of hours per work order. Event enrichment enables the management of work orders to ensure effective use of maintenance teams time and ensures that all alerts are taken into account resulting zero duplication of work orders. Once action is taken the resultant energy savings are immediate. Maintenance saving come later once the work orders are worked through
You may ask what IBM brings to the management of facilities and real estate. What we bring is the ability to help organizations optimize their portfolio of real estate and facilities through a continuous improvement process. It starts with the ability to collect data from a variety of sources including energy and space usage data, lease expiration data, real time equipment performance data, etc. IBM has a history of experience with data integration and management of very large data sets. The ability to make sense of this data and provide new insights into the management of the portfolio as well as individual improvements to buildings is critical to reducing costs enabling buildings to operate in a more sustainable fashion. IBM Software and services can also help to manage the process of effecting changes whether they be building retrofit projects or equipment maintenance. The ability to capture savings, optimizing return on investment and report on sustainability compliance are all an important part of closing the loop for continuous improvement. The use of building data in this way is driving a paradigm shift in the way buildings are managed. In combination with the control systems, the data, analytics and automatic work order generation provides a new approach which allows building operators to address issues like set point drift and other performance issues in an actionable, near-real time way. Using this solution, facility managers can take their building operations to the next level, driving out more inefficiency and cost whilst ensuring reliability, safety and comfort of all the buildings in their portfolio.
As we mentioned earlier in our discussion, IBM offers solutions in 5 key areas to help you make your buildings smarter. Customers need to ask themselves…”how can you manage facilities efficiently”… “how confident are you that you can execute lease renewals that benefit your organization?”…”would the savings associated with an enterprise-wide change to more energy-efficient lighting outweigh the cost of the change itself?” The secret to answering such questions is integration. Increased instrumentation supplies the data but the interconnectedness of that data with analytics and process automation enables intelligence to be delivered. Only through integration, between real estate and facilities management processes and with other enterprise systems and processes, can organizations create smarter buildings. IBM’s solutions deliver a set of integrated solutions that integrate functional models across real estate, capital projects, facilities space management, facility maintenance, and environmental and energy management within a single enterprise-class technology platform.
Reduced energy usage makes sound business sense: energy costs comprise 23 percent of the total occupancy cost of facilities, and, as increased global energy demand pushes up overall energy costs, organizations bear the brunt. Most organizations — in particular those that achieve their energy and environmental goals — recognize the need to optimize the environmental and energy performance of their property assets. In fact, an IBM study found that 91 percent of these achievers focus on facility energy efficiency as their primary sustainability strategy. IBM delivers accurate energy and environmental analysis and management capabilities via a single, comprehensive repository of an organization’s energy and environmental data. This data provides the means to measure energy and environmental performance, evaluate opportunities to reduce energy, identify areas of energy waste in real time and to automate corrective service requests. IBM also delivers true integration across operational modules for maintenance, project management and space planning — the three tactics used by a majority of those organizations that achieve their environmental and energy reduction goals. IBM, itself, proved out the benefits of IBM’s technology for advanced energy analytics and achieved an incremental 10 percent reduction in energy use across a 3 million sq. ft. IBM campus in Rochester, MN.
Millions of people around the world now work outside of the traditional office enviornment; external factors drive new changes within the workplace all the time as organizations confront the realities of downsizing, relocation, mergers and acquisitions, rapid growth, and retiring baby boomers. And, facilities executives must deliver a dynamic combination of people, process, technology and space to support these changes. IBM solutions centralize and integrate critical facility management processes to improve the effectiveness of a distributed workforce, increase the utilization of physical facilities and accelerate the configuration of an organization’s workplace. Using IBM solutions, a large European technology company reduced its global facility portfolio by 17 percent.
Facilities maintenance and operations management are key functions as businesses strive to improve energy efficiency and reduce operating costs while continuing to deliver on and improve services. This means delivery of maintenance services that actively improve the efficiency of energy-consuming assets, increase the effectiveness of critical assets and extend the life of capital equipment. IBM solutions automate demand and preventive maintenance services, and improve service provider management to reduce the cost of maintenance operations. Facility assessment features track and evaluate building and asset deficiencies and help to identify opportunities to improve the environmental condition and extend the life cycle of real estate and facility assets. IBM, itself, proved out the benefits of IBM’s technology for integrating real time identification of asset performance issues and automated maintenance notification. On assets where the IBM solution was deployed, reactive maintenance was decreased by 16% and total maintenance hours by 49%. IBM campus in Rochester, MN. Using IBM solutions, one of largest school districts in the US is able to accelerate corrective maintenance work orders through the use of self-service requests entered by administrative staff at each school.
Many organizations face limited financial resources and cannot afford wasteful programs and projects that fail to meet planned outcomes and do not produce measurable business improvements. IBM offers capital project management solutions to improve the quality of capital, facility and environmental projects and accelerate project schedules and help customers identify funding priorities within capital programs, analyze project risks and financial benefits, and automate project management controls and alerts essential to deliver ad-hoc projects and complex programs of any size in an effective manner. Using IBM solutions, a major U.S. specialty retailer accelerated its project bidding process to reduce store construction schedules by several weeks and realized millions in additional revenue.
CFOs and financial executives continue to place increased emphasis on real estate as a key strategic asset. Senior executives use real estate to generate top-line improvement in their financial performance by opening new locations, as a source of capital to fund revenue growth, and consolidate or dispose of underperforming locations to bring about significant expense reduction. In addition, pending changes to lease accounting rules that will place operating leases on the balance sheets of public companies in the U.S., Europe and many other countries will increase the impact of real estate on financial performance. With IBM real estate management solutions, finance and real estate executives can make faster, more informed decisions that bring increased value to their organizations though identification of high-return real estate transactions, consistent pre-built lease accounting controls and automated lease payment reconciliation. One example of these benefits comes from a major European manufacturer who’s IBM system alerted real estate staff to a lease that would have automatically renewed, if no action was taken. Based on this alert alone, the customer generated more than EUR2 million.
To reiterate once more, smarter buildings are managed comprehensibly to provide optimal occupancy services in a Reliable, Cost Efficient, and sustainable manner. A few examples of how our customers have made their buildings smarter can be seen here: Tulane University is located in the heart of New Orleans and is the largest employer in the city. As you all know it was devastated by Hurricane Katrina a few years ago. The School of Architecture located in Richardson Hall is 100 year old building that has implemented the IBM TRIRIGA Energy Optimization solution. The project overlays the disparate building controls for heating, cooling, electrical and water equipment, enabling them to act more holistically rather than against each other. With greater visualization of building data and energy analytics, the school aims to expend only a fraction of the resources it currently uses. After this first phase, Tulane plans to deploy the IBM Smarter Buildings Solutions to all its 70 buildings across campus. IBM is helping Tulane to connect to its existing building systems to collect metered data, then incorporating that data to enable advanced analytics that uncover sub optimal conditions. Initial results, which are still being validated highlight a significant projected energy savings. The second example is the IBM Rochester, Minnesota campus. This campus was established in 1956; it has 36 buildings that contain 3.1 million square feet which is equivalent to about 300,000 meters. It is a multi-use campus which includes manufacturing, warehousing, development labs, office space and a data center. The local building management team has been implementing building enhancements for the past 7 years such as improving the insulation and the roof material, and has achieved an impressive 5 to 7% energy reduction per year. But the facilities managers were running out of physical enhancements to do, and since Rochester is one of the highest energy consuming campuses for IBM, they decided to implement the IBM TRIRIGA Energy Optimization solution. The solution collected 10,000 measurements every 15 minutes, and recorded and analyzed operational performance against a set of rules. If a variance was detected, a service request was automatically generated and the appropriate personnel were notified via a service request. For example, if the outside air temperature is above 78 degrees and a heat valve is open on one of the air handlers, heating a building unnecessarily, maintenance staff got an alert and were dispatched to resolve the issue. This resulted in an 10% decrease of energy consumption of the monitored equipment since the solution was implemented. It is important to note that the new savings are just due to the data driven approach and they are over and above the savings that resulted from the physical enhancements to the building. A Global 20 company’s real estate transformation has generated more than $925 million in real cost savings since its inception in 2003. This is the culmination of process improvements, standardization of workflows, reductions in overall space needs, a constant focus on cost, and the adoption of cross-divisional portfolio strategies that resulted in facilities consolidations. TRIRIGA’s IWMS platform and solution set provide the uniform database, workflow tools, user interfaces, functional modules, and performance metrics that enable the necessary actionable insight into the customer’s portfolio management process and performance. RESO management is committed to the IWMS solution and has relied heavily on Tririga to provide substantial improvement in user satisfaction, cycle time and staff productivity.
IBM has extensive experience in buildings operations through our Maximo business, and now with the addition of IBM TRIRIGA, our solutions and services capabilities have expanded tremendously. IBM is also a leader in the energy analytics market (1) We have talked about the savings that both IBM and our customers are seeing… the numbers are staggering and the savings are significant. The breadth of IBM’s portfolio provides clients with a global end-to-end solution including hardware, software & services, enhanced by technology, research and a robust partner ecosystem. Source: IDC Energy Insights MarketScape: Worldwide Smart Building Energy Analytics 2011 Vendor Assessment http://idcdocserv.com/EI230178
The decision makers for smarter buildings solutions are usually executives in real estate organizations; and when you talk to those executives, and you visit their departments, you will undoubtedly come across vendors such as Johnson Controls, Schneider Electric, Honeywell, Siemens and others. Those vendors provide the infrastructure equipment, the Building Management Systems, control systems, advising services for building efficiencies, and also long term facilities management contracts. And they typically have close relationships with the real estate execs. And we are partnering with these industry leaders in this space in many ways. In 2009, IBM launched the Green Sigma TM Coalition which brought together like-minded companies to drive the Smarter Building agenda. This collation, now run by the members, brings together industry leaders in a forum that helps meet the smarter buildings needs of both private and public sectors.
There has never been a bigger need nor indeed a better time to enhance the way buildings are managed. We can no longer expect what we did in the past to address the needs of not only the future, but also the present. Costs to operate buildings are increasing, as is the need to be compliant. Companies are continually changing their business models, rationalising and changing the use profile of their real estate portfolio, and the ability to react in a real-time manner to all of these factors has never been more important. The challenge is for all stakeholders to embrace change and deliver the technology solutions and services that drive Smarter Buildings. Now, let’s discuss our next steps.