An advanced smart building solution or “platform” is quickly becoming the go-to resource for facilities managers working to reduce total cost of ownership and improve overall profitability. Unfortunately, facilities management remains a department defined as a “cost center” associated with higher costs and problem management. Instead of being relegated to a reactive approach to responding to maintenance, today’s facilities managers can transform their departments from a traditional cost center to more of a revenue stream that maximizes cost avoidance principles to significantly reduce your businesses total cost of ownership. Of course, that depends on your ability to successfully build the business case for smart building solutions.
Challenges in Building the Business Case for Smart Building Solutions
The challenges of building the business case for smart building solutions implementation derive from the limited visibility and insight into the current maintenance and energy costs associated with a distributed portfolio. Maintenance is chief among these costs. The forward-thinking facilities manager understands the need for smart building solutions, but the challenges arise when that person must convince shareholders of the need for adopting and implementing smart building solutions to improve operational efficiencies and boost the bottom line profits. Unfortunately, many shareholders often see “maintenance” as unnecessary cost and expenses, not the potential for significant savings and cost avoidance. Depending on the scale and intensity of currents technologies used in your organization, this will lead to additional problems:
- Limited access to maintenance and energy data makes it challenging to project cost avoidance savings.
- Decreased funding for use in handling items on the maintenance backlog.
- Reductions in labor use, which appears positive, can result in setbacks and establish a level of distrust among team members.
- A lack of line-item detail regarding facility asset condition, runtime, service life, and total cost of ownership.
Why a Winning Business Case Is Key to Leveraging a Smart Building Solution
A winning business case is the way facilities managers communicate the need for more technology and insight into facility assets and condition, reports Robert Greenwald. The facilities manager must speak the language of the Chief Financial Officer, explaining the total cost of ownership and the cost avoidance achieved from implementation. Also, facilities managers should work to focus on the decreased financial risk deriving from modern platforms, improvement in commitment to sustainable facilities management, and more. Getting the support of the CFO is the first step toward leveraging smart building solutions.
Valuable Tips for Building the Best Case Possible
The decision to invest in smart building solutions must not be taken lightly, and the poor implementation and improper use of smart building solutions could potentially increase facilities spend. It is all a matter of perspective. More information enables data-driven decision-making. However, imagine the consequences if that data is misapplied and interpreted to mean something in-house. To ensure your business case does not succumb to the high scrutiny and suspicion, facilities managers should follow a few valuable tips to build the best business case possible that presents facility optimization and energy management in the best light. These include:
- Access to lower interest rates and better financial resources. As explained by ENERGY STAR, organizations endeavoring energy-efficient process improvement may be able to secure better financing terms and access to resources, including government-backed sponsorships, rebates or incentives, to strengthen the argument for smart building solutions implementation.
- Emphasize the social benefit of energy savings and sustainable practices, such as increased interest from potential tenants in the commercial real estate (CRE) space.
- Be thorough, taking advantage of available data from smart building solution providers. Today’s smart building solution providers, including ENTOUCH, have countless case studies available that highlight the potential return on investment (ROI) for multi-site owners who have successfully adopted a smart building solution.
- Avoid being too technical. For example, the use of a software-as-a-service (SaaS) platform, leveraging the Internet of Things (IoT) and machine learning (ML), can successfully enable facility managers to better manage distributed assets and reduce the total cost of ownership (TCO) without increasing costs associated repair and maintenance (R&M). That’s many acronyms, and your CFO is not likely to understand what you’re trying to say. Be succinct in your message and clearly define the important points of your business case.
Build Your Bulletproof Business Case Today
Building a bulletproof business case is one of the most intense activities today’s facilities managers will face. The right business case will provide a clear roadmap for why the organization should implement smart building solutions and the immediate value the solution represents to the organization. Visit ENTOUCH online to learn more about the key benefits to include when building the business case for smart building solutions.