Our second Business Case talks about HVAC optimisation: How occupancy steered HVAC generate savings. Read about the impact on employees and how it improves the sustainability of buildings.

Learn more about:

  • Calculating the business case of HVAC optimisation
  • The importance of occupancy analytics in office building sustainability
  • How an optimised HVAC system ensures the employee well-being and increases the attractiveness of a company
  • Calculation example on how HVAC optimisation leads to a cost reduction of USD 149’000 per year (for a company with 100’000m2 or approx. 9000 employees)
  • Calculation example on avoiding USD 99’600’000 of costs pear year by decreased employee absence for a company with 20’000 employees

 


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The Business Case of Space Efficiency contains

  • How to calculate the business case of space efficiency
  • How continuous measurements allow to base decisions on objective and reliable data
    Options on how to realise the savings potential
  • Calculation example on how reducing space leads to a cost reduction of USD 4’544’000 per year
  • Calculation example on to avoid USD 2’071’680 of costs pear year by optimising already existing space

 

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In the first part of this blog we discussed the rapid evolvement of smart building technology such as IoT and the fact that contrary to traditional belief, the biggest value proposition of smart buildings are its employees. However, what other businesses cases are there for making investments in smart buildings and what are the potential savings resulting out of the investments?

Operational Space & Facility Management

The reduction of operating expenses is the most logical implication of turning buildings into smart ones. On the one hand, operational efficiency can be boosted, because the data extracted and analysed from sources such as sensors or Wi-Fi reduce reduce the need for manual involvement in optimising energy usage in buildings. Operational costs such as cleaning can be optimised by aligning maintenance efforts with actual usage of workspaces. Furthermore, demand-driven heating, ventilation, and air-conditioning control (HVAC) optimisation lead to decreased energy usage and therefore, fewer costs and equipment needs. As we have mentioned in Part I, the real estate firm JLL suggests applying the 3-30-300 Rule™ – $3 per sq. ft. per year for utilities, $30 for rent, and $300 for payroll – when estimating business expenses. The diagram below shows an application of the rule, with calculating scenarios where savings can be made. For example, if 20–25% energy savings can be made and the office space has a total of 120’000sqm, this means that on $3 per square meter a savings potential of $72’000 can be realised.

Strategic Space Management

With the analysis of data over the entire portfolio, risk management can be improved. Based on objective data management, capabilities can be enhanced and faster, data-driven decisions can be made across the entire portfolio. When viewing data of the entire portfolio, consolidation or growth potential over various sites can be identified. For example, the sharing ratio can be increased, which means an increase in 10% more space usage and 80 additional employees can be fitted in an existing building. Overall on $30 per square meters cost, $360’000 savings can be realised.

Workspace experience

Using the 3-30-300 model, JLL claims that the greatest financial savings from optimising a workplace do not lie in energy, but in productivity. Using the 3-30-300 model and assuming that employees can save 2 minutes (approx. 2%) each week because of not having to search for a free desk, $720’000 can be made due to $300 per square meters.

What Locatee Offers

Locatee is the leading workplace analytics solution that transforms complex data into space utilisation insight. Developed with a strong focus and a deep understanding of the corporate real estate challenges facing the modern world of work, Locatee empowers you to make decisions about your business buildings with confidence. Locatee works by leveraging office occupancy data from multiple sources, processing them using unique patent-pending technology, and beautifully visualising them all in one place. With workplace intelligence right at your fingertips, you can easily identify optimisation potential, realise savings, and enhance your company’s workplace experience across your entire real estate portfolio. Read our case studies from Biogen and Post, to discover the different use cases.

Key takeaways

The development of technology has augmented the importance of smart buildings and investing in them offers great opportunities. First and foremost, a dynamic, smart workspace is responsive to the needs of the people who work in it, creating a better work environment und in turn, increasing people’s productivity. Investing in smart buildings requires high assets, but it also offers the opportunity for great returns. The diagram below shows just a fraction of savings that can be realised when making investments into smart buildings and reducing energy costs, optimising sharing ratios and improving the workspace experience. Discover your individual use cases and what other potentials can be realised.

In the past few years, smart building technology such as IoT has been evolving at lightning pace. Explained simply, smart buildings use a combination of technologies to automate building management. Sensors feed the management systems with information about changes in occupancy and temperature. The systems allow facility managers to automate and manage the different variables of a building’s operation and the collected data is stored and analysed over time so that adjustments can be made. While bringing many benefits, turning buildings into smart buildings requires investments. So, what is the business case for making investments in smart buildings?

Read the second part which focuses on the strategic and operational space management of making investments in smart buildings.

Value Proposition of Smart Buildings

In traditional belief, the greatest incentive to invest in smart buildings are asset value and energy savings. Building automation and integrated control systems can generate from 10 to 40 percent savings in energy costs alone. However, if only energy cost savings are considered, a much bigger value proposition is overlooked.

Employees spend at least 40 hours at the office each week, totalling 2080 hours every year and human capital accounts for about 90% of a company’s operating costs. The real estate firm JLL suggests applying the 3-30-300 Rule™ – $3 per sq ft per year for utilities, $30 for rent, and $300 for payroll. Using the 3-30-300 model JLL claims that the greatest financial savings from optimising a workplace do not lie in energy but in productivity. Primarily, smart buildings benefit the people who occupy them, which in turn produces significant positive impacts on the company’s bottom line. In numbers, this means 43% of the total value comes from enhanced employee productivity41% from increased employee retention7% from improved employee wellness7% from utility savings, and 2% from maintenance savings (The financial case for high performance buildings).

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.

What Locatee Offers

Locatee is the leading workplace analytics solution that transforms complex data into space utilisation insight. Developed with a strong focus and a deep understanding of the corporate real estate challenges facing the modern world of work, Locatee empowers you to make decisions about your business buildings with confidence. Locatee works by leveraging office occupancy data from multiple sources, processing them using unique patent-pending technology, and beautifully visualising them all in one place. With workplace intelligence right at your fingertips, you can easily identify optimisation potential, realise savings, and enhance your company’s workplace experience across your entire real estate portfolio. Read our case studies from Biogen and Post, to discover the different use cases. Read our case studies from Biogen and Post here, to discover the different use cases.

Key Takeaways

The development of technology has increased the importance of smart buildings and investing in them offers great opportunities. First and foremost, a dynamic, smart workspace is responsive to the needs of the people who work there, creates a better work environment and in turn, increases people’s productivity. Investing in smart buildings does require high assets, however, it also offers the opportunity for great returns.

Contact us to discuss your business cases.

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