Smart Buildings and Cities

Proactive Planning for Your Business

Does your business need to move to the smart city of tomorrow? Learn how to avoid potholes and traffic jams, and navigate confidently into your smart building today.

Sure, you’re thinking, smart buildings…that’s just what humanity needs. We can’t figure out how to postpone Windows updates, so let’s add cybernetic warehouse workers with a penchant for somersaults, and fido-droids with killer frisbee skills into the mix. In fact, what we really need is a whole new dystopian cyborg breeding ground, ala I Robot by Isaac Azimov (one of my favorite sci-fi stories, though it was ruined in the movie adaptation, in my humble opinion, by Will Smith and that lady that played Doctor Calvin, but I digress).

The concept of a smart city, comprised of many interconnected smart buildings, isn’t new, but has evolved significantly over the last couple of decades. And, whether it was brought into existence by intention, or from one-too-many wireless sprinkler systems accidentally short-circuiting with discarded fit-bits during a thunderstorm, it seems like it’s here to stay. All the same, if the thought of a billion-ton steel and glass behemoth looming over you as you stroll down the street listening to your favorite techno, and using the Bluetooth signals bouncing off of your head to calculate if its window washer-bot could dump a bucket of grimy suds on you as you pass doesn’t send a chill down your spine, then maybe this is the wrong article for you. (Just kidding. You can see I’ve been thinking about this a lot.)

Anyway, nightmare scenarios aside, the proliferation of smart buildings—and their big brothers and sisters, smart cities—is an undeniable trend in our modern, ever-more-coupled society. Over the past several years the need for diversified, highly connected, and efficient workspaces has grown exponentially. Recent events like the global pandemic cannot be entirely blamed for this, but it certainly threw saltwater onto the already raging smart building lithium fire—which brings us to the knub of this article.

So, there you are one fine Monday morning in November, basking in the cool glow of your twin twenty inch LED monitors, scrolling through Twitter as you think about changing this week’s line-up for your fantasy football team, and wondering if Doordash is up for delivering lunchtime nachos, when your boss casually pauses in the doorway of your cube-world happy place and says, “Hey, you’re an IT guy—what do you think it would take to make our building ‘smart’? The big boss asked me to figure it out, so now it’s your problem. Do some research and get back to me with an executive summary, and a biz case by say, ah, Friday. That would be gr-r-reat. . .”

And then she takes a sip of her triple-mocha-half-skim-half-soy latte, and wanders off in the direction of the break room as the panic sets in. Fortunately for you, you’re reading this comprehensive guide on just that subject. So, sit down, my Padawan, and let me edu-ma-cate you.

THE IOT—TWENTY YEARS ON

Twenty years? Can it really be that long? Yes, believe it or not, the term IoT (or Internet of Things), is more than twenty years old. According to Wikipedia [1], the term Internet of Things first appeared in a speech by Peter T. Lewis in September 1985. Lewis defined it as “[the] integration of people, processes and technology with connectable devices and sensors to enable remote monitoring, status, manipulation and evaluation of trends of such devices.” The term was even re-coined independently by Kevin Ashton of Procter & Gamble in 1999, though he prefers the phrase Internet for Things, because prepositions, or something.

Even further back, before it was called the Internet (and way before the Things), legend has it that the primary neural node of this IoT-powered proto-Matrix was born in the late nineteen-seventies within a lowly soft-drink vending machine located on the campus of Carnagie Mellon University.

HAL, as he prefers to be called, became the first ARPANET connected appliance, able to report the weight and the pimple density of his college-age patrons, as well as to monitor the contents and temperature status of his soft-drink inventory. And, as HAL would remind you, the value of any network increases as a function of the number of nodes that are connected to it. Fast forward from that lowly beginning to today and IoT class devices have become legion. They are the worker bees of the Internet, whether wired or wireless, and include everything from key fobs to kitchen sinks. With the advent of IPv6, the number of things that can be linked together using IoT is almost without limit. All modern building systems—HVAC, water, sewer, solar power, telephones, lighting, emergency notification and recovery, maintenance, electrical, IT, fire, safety, access management, and maintenance —can be controlled and monitored by IoT. These devices are the fundamental components for our smart building, and their utility has grown in proportion to their ubiquity.

The push to add intelligence to the corporate environment is no longer a question of why, but rather how, when, and at what cost versus benefit? And, since you’ve been tasked with planning out your company’s migration into this smarter world, the first question becomes: build new, or retrofit? There are business cases to be made for both scenarios, and a savvy Industrial Systems Engineer (ISE) can be a good source of advice on the finer details. There are consulting firms whose sole focus is smart building roll-out planning, and even a modicum of research will turn up a slew of choices. Rather than dive into the gritty depths, however, the rest of this article will be devoted to important points of the decision tree, references to the players in the space, and potential partners.

TO RETROFIT OR GREENFIELD?: THAT IS THE QUESTION

Okay, we’ve decided that we want a Smart Building, but before we start mapping out the plan, there are a couple of major decision points to navigate. First, we need to understand the scope of our project. Buildings, like homes, have one incredibly difficult component that must be dealt with—namely, people.

People are awful, full stop. The most terrible thing about them is that they all have an opinion. Getting the people in your organization to agree on how their office space is going to be configured can be a thankless task. As every facilities manager can attest, no one is ever happy, ever. No matter what you propose, someone is going to want it a different way, so the recommended attitude to cultivate is a flexible and calm one. That said, there are some techniques which can smooth the process. Getting management to buy-in is key.

Another important pre-consideration is to make your proposal fit-to-purpose. Simply put, this means that although you can find IoT devices that will track the CO₂ levels and heat signatures of every person in the building, or will manipulate the exterior lights to display Pac-Man, it may not be appropriate for your organization, nor add anything to the bottom line. As with any project, identifying the major points of pain—the issues that need to be addressed versus those which can be—will point you in the right direction.

Next, what level of disruption will be acceptable? Is this an actively occupied building, and if so, how critical to the company workflow is the activity in the space? An in-place upgrade can be implemented in incremental steps, but will the retrofitting and time spent in systems cutover be offset by the productivity boost and energy savings? If that answer points you towards a greenfield approach, then the cost of moving from one space to another must be added into the mix. Moving costs—especially the often-underestimated cost of packing and un-packing—can be significant, and the disruption moving causes can be equivalent to that from in-place upgrades.

Careful calculation, with plenty of leeway built in, is a crucial part of planning your smart building project. Most organizations, and very likely your boss, are happier if potential snags and cost overruns are identified early in the process. Late-breaking delays can undermine the success of the project and negatively affect morale, especially if they are perceived by management as something that should have been foreseen. They can also make you the target of people’s frustration when things go sideways. Again, a flexible and calm attitude, combined with proactive and frequent communication with all the stakeholders, is going to make your smart building project, and your people, happier.

Back to the greenfield versus retrofit question. Both paths have benefits and drawbacks, and since there is no exact right answer, it may come down to philosophy. A smaller organization which is more tolerant of upheaval may prefer to upgrade and retrofit an older space, saving on the cost of new construction, pacing the budget burn rate, and scaling as needed. A larger organization may elect to take the hit and pay upfront for the latest tech in a brand-new space, so as to avoid the maintenance and recurring costs of an incremental approach in an older building. There are arguments to be made on both sides. Let’s explore two real world scenarios.

Greenfield—Duke Energy Center: The Duke Energy Center, located in Charlotte North Carolina, was a brand-new construction, costing north of $800 million (Figure 1). In this case the building was purpose-built to showcase the latest energy efficiency modalities, and to have a low carbon footprint. IoT devices were employed to add intelligence to almost every aspect of the building.

As you can see in Figure 2, 16 separate building systems were integrated into one seamless net, reducing operational expenses and energy consumption by 22% overall. One of the most intriguing features is the intelligent elevator bank system called “Destination Dispatch.” This system assigns elevators to occupants with common destinations, making the fewest possible stops while transporting passengers. In addition, the building’s emergency systems, irrigation and water use, access control, and disaster recovery and lighting equipment were all integrated in this new construction.

Retrofit—Empire State Building: The barriers that seem to be in the way of retrofitting—for example equipment cost, workflow disruption, time, and rewiring—have all been reduced with the newer generation of IoT and networking technologies. The case study below from Building Engines Blog [3] shows how an iconic building, the Empire State Building, was converted to a smart operation (Figure 3).

As you can see in Figure 4, even a high-rise built almost 100 years ago with little to no consideration of networks or modern connectivity can be retrofitted without destroying its gothic 1930s charm. In this case wireless IoT devices and networking technology were used, connecting the disparate building systems together in one seamless high-speed net. Employing these technologies, the old building realized a 38% reduction in overall energy consumption, saving over $4 million dollars a year in energy costs (Figure 5).

SMART BUSINESS: MAKING THE CASE

In this section we’ll go over the value proposition of smart buildings. Critical to any final decision will be the return on investment (ROI). Management will want to see how your proposal will affect the bottom line, and more importantly, how long it will take to recoup the required investment (Figure 6). Once you’ve spent the time to identify what must be done and at what cost, a key selling point for the project will be an estimate of the duration of this recovery period.

Traditionally, one of the greatest incentives to invest in a smart building is the increase in asset value. A smart building can be a great selling point for a future owner, and the overall energy savings provide a year-over-year boost to the bottom line. According to commercial real estate (CRE) industry metrics, building automation and integrated control systems can realize anywhere from 10% to 40% energy cost savings for the building occupants. However, there is another, even greater factor that is often overlooked, and it can seal the deal.

In a typical pre-pandemic working environment, employees spent around forty hours per week in the office. This adds up to around two thousand hours on an annual basis. As any HR manager will tell you, human capital makes up the lion’s share of operating expense in any business, and can be upwards of 90% of recurring costs in some tech-heavy industries. As a rule of thumb, JLL [6], a Canadian commercial real estate firm, has developed the 3-30-300 rule.

Simply put, this equates to $3 per square foot per year for utilities, $30 for rent, and $300 for payroll. Using this rule, JLL claims that the greatest financial savings that result from optimizing a workplace do not lie in energy but in productivity.

According to their model, smart buildings provide direct benefits to the people who occupy them, increasing morale, which in turn produces significant positive impacts on the company’s bottom line. In numbers, they estimate that 43% of the total value of a smart building project comes from enhanced employee productivity, and another 41% from increased employee retention. In addition, they say that another 7% results from improved employee wellness, 7% from utility cost savings, and only 2% from maintenance savings! This surprising result is because there is a 100-fold factor weighting the bottom-line cost reduction on the company’s human capital expenses. Basically, having happy employees equates to business success.

As per JLL [6], “[the] productivity gains can be achieved by making workplaces physically comfortable, enabling fewer distractions and the ability to concentrate fully on tasks. Furthermore, it has been proven that there are direct links between human-focused, intelligent building systems and a company’s ability to recruit the brightest talent. Not to forget, active participation and signed consent of the employees are vital to a system’s success. However, if all things are considered, the promise of energy efficiency, better access control, greater comfort and environmental responsibility all come down to a high return on investment (ROI) for smart buildings.”

PLANNING IT OUT: A SAMPLE WORKSHEET

As we can now see, the question of how to plan your smart building project has many moving parts. Losant has a comprehensive guide on their website (Figure 7) [4]. Some of the tangibles are cost and time. These can be further broken down into:

Upgrade old

• Planning and Logistics
• Equipment Acquisition
• Labor/Installation
• Disruption to normal workflows (Opportunity/Productivity losses)
• Incremental Upgrades/Maintenance
• Ongoing Maintenance

Buy new

• Building Site Acquisition
• Financing
• Consultant/Design Partner
• Construction Costs and Time
• Packing/Moving/Unpacking
• Disruption to normal workflows (Opportunity/Productivity losses)

Each of the above need to be estimated, and it helps tremendously to have a partner who can assist in getting you the proper numbers, and who has the experience to avoid common pitfalls. So, let’s look at some partners.

PARTNERS

Whether you’re going to build a whole new facility, or just upgrade the one you are in, the partner you choose for assistance is important. Depending on which way you go, you may have a monolithic turnkey solution from a single large supplier, or a collection of equipment sources that will interconnect using a specified standard protocol to a unified management center. Here are some of the vendors I found, along with a synopsis of their capabilities. This list is far from exhaustive, but it represents a cross-section of the market space.

Cisco: As the saying goes—no one ever got fired for choosing Cisco. Known worldwide for their networking and productivity solutions, Cisco is a natural player in this market. As you can see on their website [9], they have a whole division called Spaces, which is focused on building and supporting the smart modern workplace (Figure 8). Their eBLE line of IoT devices are a rock-solid way to move your project forward. And they offer consulting services to help scope and identify your best-case solution.

Siemens: Siemens is a global player in a wide variety of industries (Figure 9). They too have a full suite of products and solutions for the workplace of tomorrow (Figure 10). They have a very informative video that explains their philosophy: “Building the Future Today” [7]. More information is also available on their website [8].

Cohesion: On a different level there are companies like Cohesion [10]. Cohesion’s product is a state-of-the-art management and integration suite, allowing the integration of many types of IoT devices and systems under a single platform. For a more incremental and standards-based system, especially one where a phased roll-out is desired, Cohesion, and other similar vendors, is a good option to explore.

IotaComm: Another player in the integration space is Iota Communications. Their value add is a comprehensive integration and management platform called Delphi360. More information is available on their website [11].

Aurecon: International in scope, this Singapore-based design and construction company has a global presence, with a strong focus on the Asian and Oceania marketplaces. Aurecon can provide a soup-to-nuts contract, including consultancy, design, architecture, building and site development and more. For the greenfield experience they are a great partner.

Locatee: Locatee is a Swiss company that specializes in consulting and optimizing your workplace and efficiency. They are a great resource to use to scope out your project and arrive at the right-size solution that meets your company’s needs. Locatee’s website offers whitepapers, business case studies, partner references and more [5].

RISK FACTORS

Okay, things are looking good! You’ve got a plan and it’s only Wednesday afternoon. You can kick back and put your brain in neutral, right? Hold on there Anakin, you forgot one more thing about people. People hate change.

Assuming your organization has not been exposed to a smart building in the past, all the things you are about to propose are going to be viewed with a range of suspicion. You may have the most logically thought-out proposal, but nevertheless be prepared for a few curveballs. Not least will be the fear of the unknown, as outlined in the Smart CRE website [12]. There they list a few of the most common concerns and objections that you may run into.

Cyber security: Connecting nearly every device in a building to the Internet has an obvious risk. Cheap IoT devices are not equipped with the best security software, and can potentially be hacked. To fight this problem, many countries and organizations are implementing regulations or laws to force companies to make their IoT devices more secure. However, as every parent who has had the neighborhood whiz kid hack into their doorbell camera knows, any connected device can be attacked.

Initial installation costs—sticker shock: The costs of installing smart technologies can be tens or even hundreds of thousands of dollars. This can be a large investment for smaller companies. Of course, this also depends on the size of the building and the number of solutions installed. Even though there must be some investment in the beginning, you want to be able to confidently assure your team that there will be a positive return within a few months or one to two years. According to JLL [6], it is one of the biggest myths that smart buildings are not a good investment decision.

Internet connection: Another disadvantage of smart buildings is the need for a constant internet connection. A reliable network needs to be established to get the full potential out of the intelligent technology. If your building becomes a pumpkin because the internet happens to be down, expect that you may get a lot of annoyed early-morning wakeup calls. A robust fallback plan is key.

Usability: Even though many children nowadays are growing up with technology, there is still a large pool of people that are not accustomed to it. One goal of smart technology and IoT must be that it can be easily used by everyone without prior knowledge. Training your folks on what to expect and giving leeway for adoption will help.

DRAWBACKS: MAYBE IT’S TOO SMART

Given the above, you may meet some resistance from your organization. Concerns that are often raised about smart buildings center around the hype versus the reality, security, and privacy. While it may seem ideal to be able to track your employees’ every movement and mouse click, putting the shoe on the other foot and imagining Big Brother looking over your shoulder every moment of the day injects a dose of reality. Employees need to feel that they’re being treated with respect, and that they are trusted with their jobs’ responsibilities without a corporate nanny-bot spying on their every move. The adoption rate and ultimate success of the new smart environment will depend on how comfortable you can make it for everyone.

CONCLUSION

Well, that’s all for me. I sincerely hope that this article will help get you started on your smart building project. If you were inclined to, say, email a couple Starbucks coupons my way as you bask in the warmth of the hero-adulation you’re going to get from your boss as she presents your work to the board, I would not refuse. Go forth smarter and better-prepared, and to quote Miracle Max: “Have fun stormin’ da castle!” 

REFERENCES
[1] Wikipedia: https://en.wikipedia.org/wiki/Internet_of_things
[2] Intelligent Building Europe – Smart Building Case Studies
https://s33644.pcdn.co/wp-content/uploads/2020/06/Intelligent-Building-Top-5-Smart-Buildings-ebook.pdf
[3] Building Engines Blog: Is it Time to Make Your Old Building Smart?
https://www.buildingengines.com/blog/retrofit-old-building-smart-building/
[4] LOSANT GUIDE: Smart Buildings https://www.losant.com/smart-environment-guide
[5] Locatee Smart Building: Business Case https://locatee.com/en/blog-post/businesscase/
[6] JLL – A Surprising way to cut Real Estate costs:
https://www.jll.ca/en/trends-and-insights/workplace/a-surprising-way-to-cut-real-estate-costs
[7] Siemens Smart Building Planning Video: https://www.youtube.com/watch?v=hlLWA_XqVHY
[8] Siemens Planning Tomorrow Website:
https://new.siemens.com/global/en/company/topic-areas/smart-infrastructure/smart-buildings/buildings-of-tomorrow.html
[9] Cisco SPACES website: https://spaces.cisco.com/experience-spaces
[10] Cohesion – Smart Buildings Made Simple: https://cohesionib.com/
[11] Iota Communications – Delphi 360: https://www.iotacommunications.com/
[12] Smart CRE: https://smart-cre.com/advantages-and-disadvantages-of-smart-buildings-in-2021/

PUBLISHED IN CIRCUIT CELLAR MAGAZINE • JANUARY 2023 #390 – Get a PDF of the issue

Michael Lynes

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Michael Lynes is an entrepreneur who has founded several startup ventures. He was awarded a BSEE degree in Electrical Engineering from Stevens Institute of Technology and currently works as an embedded software engineer. When not occupied with arcane engineering projects, he spends his time playing with his three grandchildren, baking bread, working on ancient cars, backyard birdwatching, and taking amateur photographs. He’s also a prolific author with over thirty works in print. His latest series is the Cozy Crystal Mysteries. Book one, Moonstones and Murder, is already in print, and book two is on its way. His latest works include several collections of ghost stories, short works of general fiction, a collection called Angel Stories, and another collection called November Tales, inspired by the fiction of Ray Bradbury. He currently lives with his wife Margaret in the beautiful, secluded hills of Sussex County, New Jersey. You can contact him via email at mikelynes@gmail.com.

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