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Things Are Looking Up: The next FM paradigm shift

Reflecting on ThinkFM 2017 conference. Martin Read, editor of FM World, reports on the opportunity IoT presents for an entirely new facilities management paradigm.

From ThinkFM to the Facilities Show, June 2017 offered ample evidence of how the Internet of Things – organisation-specific networks of physical objects communicating their state through embedded technology in order to trigger actionable outcomes – is maturing at a dizzying pace.

At the Facilities Show, organisations such as BringMe, with its app-enabled secure parcel delivery equipment, presented entirely new ways of approaching established service problems. At the conference, speakers brought home the profound changes to service paradigms likely to result from increasingly sophisticated client-supplier relationships.

Spotlight on service

Indeed, the move to more ‘servitisation’ is coming up frequently. At the Facilities Show, Roger Woodward, MD EMEA of application framework developer Tridium, spoke of how the intelligence capabilities for measuring equipment performance and reporting is being built into devices on the production line. If anything it’s becoming difficult to buy chillers or boilers without sophisticated controls on them – and the chips that provide this intelligence are only getting cheaper.

As for analysis, it’s increasingly done over the cloud to enable web and mobile access. “The IoT is already in buildings,” argued Woodward. “But the challenge comes when the data [the IoT] generates ends up on some PC where no one gets to do anything with it.”

So the IoT is driving new service paradigms whereby product manufacturers provide service of product as their primary revenue stream, the product itself merely an enabler of expert branded service revenue. (“Why wouldn’t you want the best chiller expert in the world looking at your chiller?” asks Woodward.)

The triggering of sensors to generate service mechanisms is also leading to more efficient ‘just in time’ provision. Woodward’s example is of an American petrol station chain whose sensors trigger information on the most efficient volume and time of delivery for petrol.

Plenty more examples of major IoT projects generating significant savings already exist, including Tesco Ireland cutting its cooling costs by 20 per cent through sensor analysis. However, to get to Tesco’s level of buy-in means winning the battle with often tech-phobic boards of directors. Indeed, if the benefits of smart buildings are to be fully realised, “occupiers of smart buildings will need to be able to navigate the executive structures within their own buildings”, argued Rob Scopes, estate and capital programme management consultant for Deloitte, during his session at ThinkFM.

Marginal energy gains

Another ThinkFM speaker, Gary Atkinson – formerly of ARM and now chief executive of enLight – suggests that one of the IoT’s strongest selling points is in its potential for energy micro-generation and energy micro-saving.

Atkinson cited the oft-mentioned and perilously small gap between the UK’s generation and consumption of energy, and the potential for electricity ‘brownouts’.

“Clearly, we have to produce more energy,” he said. “But in a sustainable way – by improving the proliferation of micro-generation and putting it closer to the point of consumption. We need cheap and plentiful generation, but we should also be reducing our consumption – because that is cheaper than any other solution. And this is where we need more data; to make more granular decisions about electricity consumption.”

Atkinson spoke of using existing lighting infrastructure, whether municipal or private business, as the backbone of a smart network for energy transmission and management, its reconfiguration funded by a reduction in maintenance requirements over the long term.

The ability to better manage and reduce water consumption was another potential benefit of a world in which sensors micro-managed delivery and timing of availability, he said.

However, it’s the fast-reducing cost of sensor technology that offers most hope for the IoT’s future and FM’s place in it. Atkinson spoke of sensor technology having reached a nexus at which its cost to business was now less than its efficacy and thus the value it generates.

“Gyroscopes, digital magnetometers, pressure sensors – today these are all built into silicon at high scale, and thus cheap,” he said. “And with cheap processors comes the ability to analyse performance.

“For the IoT principle to work, you need to deploy at scale. More data points mean better decisions; you need to deploy low-cost hardware in volume to cover as large an area as possible. And we need more data to be able to make more granular decisions about electricity consumption.”

Close to the Edge

Speaking of scale, Deloitte’s The Edge building – dubbed the first use of IoT in commercial office buildings – has so much IoT deployed that it’s been described as ‘a computer with a roof’ and ‘the world’s most sustainable and connected building’.

But even here the IoT is moving at such a pace that occupier Deloitte has responded with ‘The Edge 2.0’ – a programme of fresh learning from its much-visited hyper-connected building. Creating value through the IoT’s ‘information value loop’ is the aim – the sharing of sensor-triggered data with partners creating new forms of actionable information.

The Edge 2.0 programme will also see smarter contracting with service providers that takes greater account of the data both client and provider have access to. Scopes gave by example a coffee machine at The Edge capable of assessing for itself the levels of milk it requires and how often coffee grounds need removing – but for which the service contractor was only required to check its status once a day. Edge 2.0 contracts will be “more integrated”, said Scopes.

Presenting alongside associate director of real estate consulting David Langley, Scopes told ThinkFM delegates that occupiers were as concerned about dealing with the IoT as suppliers.

But there was no doubt about the trajectory. “The Internet of Things is happening,” Scopes said. “The only variables are the pace and format.” He agreed with fellow presenter Dr Claire Penny, global leader for IBM’s Watson IoT for Buildings platform, that there exists in all of this a “massive opportunity” for facilities management.

Assessing occupants needs

Certainly, it will lead to a fundamental change in the way we design, operate and interact with buildings, said another ThinkFM presenter, James McHale, managing director of smart building research consultancy Memoori.

Key for McHale is for a future smart building to understand its occupants rather than its occupants understanding how best to operate their smart building. He warned that the design of smart buildings had to begin with an assessment of what a building’s users really wanted from it. “Design needs to be uncomplicated by features,” he said. “Simplifying and starting over with the user in mind, a smart building can become what its users want. As humans we are not robots, our actions are not always logical. Technology is a means to an end and not an end in itself. We need buildings that are built to provide outcomes, not outputs.”

The Internet of Things, said McHale, is a “feedback loop”. “But a lack of communications protocols in each individual business silo have until now been a barrier to integration,” he continued. “I’ve seen some expensive and ugly proprietary solutions in my time; too many of these technical services are tendered for and acquired as individual contracts, belying a lack of joined-up thinking across the enterprise.”

Data analytics is key, he added. “We need a fundamental shift to looking at outcomes and not outputs. The Internet of Things will allow us to measure and validate those outcomes, to close and validate that feedback loop.”

A fast-expanding sector

The market for smart building devices is set to grow more than threefold in the commercial real estate environment between now and 2021, comparing favourably with far smaller, yet still significant growth in manufacturing, retail and the home. (By contrast, converting property in the healthcare and hospitality sectors to smart building status would be a considerably longer process.)

Research firm Verdantix claims 37 per cent of the FMs it spoke to in 2016 were investing in IoT sensors for the capture of non-energy data during the current financial year, pointing to a shift from optimising energy use to a wider operational efficiency. We are clearly on the cusp of the IoT becoming a major part of the FM agenda.