How to get Return on Investment from integrating IoT Technology to monitor your facilities
The age old question “will this actually save me money long term?” is asked time and time again when making the choice to add technology to better monitor facilities. Many times, whether or not an organization can get a quick ROI can be the deciding factor as to whether they decide to purchase services or products to monitor their facilities.
Not surprisingly, Buildings consume 70% of the electricity load in the U.S. Plus, According to the Department of Energy, buildings account for 40% of U.S. energy use and waste 30% of the energy used per year. This massive amount of energy is reaching over $100 billion in operational costs per year. So how to organizations combat extensive energy waste and improve their overall sustainability?
IoT, or the Internet of things, is a new technical approach to monitoring consumption and equipment more accurately and efficiently. The Internet of Things essentially allows machine to computer communication, by trending and collecting data. This data can be used by FM Teams to address issues before the arise, plan maintenance, and lower consumption.
Costs, savings, and ROI from monitoring energy consumption
Adding IoT-based controls and monitoring to a building can cost only hundreds to tens of thousands which is STILL a fraction of the cost of traditional BMS. The average cost to deploy a basic BMS is at least $250,000 for a 100,000 square foot building. The very high cost of traditional BMS means ROI is a challenge for all but the largest buildings, often it takes at least four years to recover the cost of a BMS installation.
In contrast, IoT Sensors allow supervisors to monitor facilities very cost effectively. By adding IoT technology and sensors to monitor consumption especially on equipment with heavy electrical loads, such as HVAC equipment and lighting, organizations are able to reduce their energy consumption. For a typical 75,000 square foot building, this equates to an annual potential savings of $15,000 to $50,000 per year. Some buildings can save over $100,000 annually, and ROI can occur in six months to two years.
ROI From Predictive Equipment Analytics
Return on investment comes in many forms. Yes, there are savings when cutting down on energy consumption. However, there are huge savings associated with predictive failure of equipment. With dependence on routine preventative maintenance and the inability to put a “life-time” on equipment parts, there is no way for facilities management team to know exactly when failure will occur without cutting edge technology. By using sensors to predict failure on critical equipment, facilities management teams can better prepare themselves and service equipment before failure occurs. Depending on a facility’s reliance on a reactive maintenance approach, implementation of a fully functional predictive maintenance program can result in savings of 30 to 40 percent and a 10-fold return on investment.
So, What is keeping Facilities Management from implementing IoT Technology to monitor their facilities?
1. Directors of Facilities and Operations are skeptical
Because IoT is still a growing trend, Many Facilities Supervisors have not yet seen it in action. They have become reliant and comfortable with their BMS. In many cases, it will take time and a piloting program for facilities management to trust that the data they are receiving is accurate and actionable. As IoT Technology for FM grows, it will become very rare, possibly even obsolete, for large organizations to not have any IoT Technology Integrated in their facilities.
2. They have had a bad experience investing in FM Technology
As they say one bad apple spoils the bunch. This is in an unfortunate truth for FM Software and Technology. Not all companies offer superb customer service. Plus, lack of trust can occur when organizations invest in FM Technology without seeing any return on investment due to lack of knowledge or information about the product at hand. This can impact an organizations decision to take a risk adding anymore Technology to monitor their facilities.
3. In a technology driven world, Many maintenance technicians still prefer to trust what they know
Surprise! There’s still people out there who don’t use cell phones or prefer to be as unconnected as possible. In 2020, you’d expect everyone to be plugged in, but more seasoned maintenance technicians often like to stick to what they know ( which is not IoT ). This is beyond being skeptical however, it’s just a refusal to move into a generation driven by technology, data, and cloud-based technology.
Taking the risk to add IoT Technology to your facility may not be the easiest choice, however if you don’t, You’ll be left behind as the future of facilities management is here.