IoT for Building Management, or Workplaces created from managed IoT tagged Assets?
Vice President and Principal Analyst, Constellation Research
Constellation Research
Andy Mulholland is Vice President and Principal Analyst focusing on cloud business models. Formerly the Global Chief Technology Officer for the Capgemini Group from 2001 to 2011, Mulholland successfully led the organization through a period of mass disruption. Mulholland brings this experience to Constellation’s clients seeking to understand how Digital Business models will be built and deployed in conjunction with existing IT systems.
Coverage Areas
Consumerization of IT & The New C-Suite: BYOD,
Internet of Things, IoT, technology and business use
Previous experience:
Mulholland co authored four major books that chronicled the change and its impact on Enterprises starting in 2006 with the well-recognised book ‘Mashup Corporations’ with Chris Thomas of Intel. This was followed in…...
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Upgrading to substantially improve operating costs and efficiency of Building Management Systems, BMS, is a recognized ‘hot’ market for IoT. However the tasks, and capabilities, that define the term ‘Building Management’ are being transformed by the increasing numbers and types of Devices already making their presence in a Building known. A ‘managed workplace’ is the target, not a managed Building!
Any Enterprise building is experiencing a quarter-by-quarter growth in the number of ‘manageable’ devices that it contains. A combination of ever-decreasing processors costs, ubiquitous network connectivity, and suppliers seeking to add ‘Services’ to their products, is transforming the previous definition of ‘Building Management Systems’ into the wider goal of ‘Managing Enterprise Assets in the Workplace’.
Whilst many accept the impact of a connected environment, few realize the connectivity, and interactivity, implications beyond their own area of specialization. A Building Services manager using BMS will recognize the benefits to the existing requirements, but is unlikely to consider Photocopies, Printers, even coffee machines that are all connected to how a workplace functions as a whole.
Add individual workers devices, use of external Services/Partners, and new ‘agile’ Digital Business models to understand there is a need to grasp a bigger requirement definition. The ERP years taught the need to grasp the end game of ubiquitous common connected business environments, and the mistake of implementing custom ERP piecemeal!
For some years the terms Smart Building, Smart Workplace, Smart City, have all had their own definitions that have resulted in separation of their capabilities. In reality they are all linked through various aspects of providing ‘infrastructural’ support to an enterprise workforce. A Workplace has a relationship to a Building, even if only through shared technology, and utilities, both are located within a City providing utilities and connections. Its time to recognize the gain in consolidated operation that the IoT generation of connected ‘Things’ or Assets will provide.
Upgrading a Building Management System, or BMS, by using increased IoT sensing has gained market acceptance for the manner in which it addresses a well-understood topic with clear benefits and known buyers. In a modern office there are a huge number of powered, heat producing devices so extending BMS with increased IoT sensing to include Energy Management makes sense. As more and more powered, connected, and intelligent devices of all types make up an office, (or any other building), the whole concept of ‘Managing a Building’ will change to managing the ALL Assets to focus on market place requirements.
Effective Building Management in the age of IoT is not limited to predicting failures with improved responses in the Building Infrastructure; Managing better implies the ability to read and react to dynamic and variables with optimized actions. Twenty-five years ago this very point led to the adoption of Enterprise Resource Planning, ERP, to integrate and operate all Enterprise ‘resources’ in optimal processes.
IoT is a core enabler of the market reactive de centralized granular Business model so often described under the heading of ‘Transformation’ of Digital Business. The ability to integrate and orchestrate at the level of Enterprise ‘Assets’* provides the flexibility missing in ERP managing resources through processes.
*In IoT terminology an Asset is defined as any functional capability that can provide business valuable inputs, (data), or be controlled/orchestrated to optimize its output capability, (usually in the form of goods or services).
Examining the factors that drove the creation and deployment of ERP provides some interesting lessons on how IoT should be deployed. ERP started life as Manufacturing Resource Management, just as Industrial Sensing has developed from manufacturing use into IoT. Industrial Sensing, or Automation, created ‘Operational Technology’, optimizing near real-time data on events, and outcomes, to supplement planned schedules. (see- the challenge of incorporating IT with OT, Operational Technology). So its little surprise that the concept of ‘Assets’ based management as in the following ERP centric definition comes from Manufacturing Operational Technology.
Enterprise asset management (EAM) is a broad term vendors use to describe software that provides managers with a way to view company-owned assets holistically. The goal is to enable managers to control and pro-actively optimize operations for quality and efficiency. ….. Additionally from the same source; In earlier years, EAM was simply called maintenance scheduling software. EAMs facilitate operations by automating requests for upgrades, regular maintenance and decommissioning or replacement.
Source http://searchmanufacturingerp.techtarget.com/definition/enterprise-asset-management-EAM
There are surprising similarities around Enterprise adoption in the early period of ERP, both in the business ambitions and in the deployment challenges to those driving IoT adoption today. Both are based on sharing data, and neither can work if there are gaps and differences in deployments. Successful insightful outcome can only be arrived at with a complete data set; missing data results in dangerous assumptive outcomes.
ERP started with a focus on the technology of Client- Server applications whereas;
IoT started with a focus on the technology of networked sensing, but has recently refocused on Data driven Business benefits, often referred to as the Analytics of Things, AOT. It is arguable that in the same way as Business Intelligence became the ultimate value from ERP optimization of processes, so will Artificial Intelligence, AI, will become the ultimate value from the Internet of Things. The result will be the ability to orchestrate all of an Enterprise’s Assets into competitive responses to opportunities. Individual IoT projects must not create implementation barriers to becoming part of an enterprise wide environment.
Can a quarter of a century of ERP projects designed to create fully cohesive enterprise business based on common data with optimized shared processes teach anything useful to IoT deployment? The following are common principles that were often not followed.
1) Initial projects lacked the understanding of the true scope of ERP (IoT) as an Enterprise wide transformation with the need for common approaches to deployment.
2) Initial projects and business justifications were frequently piecemeal in their approach, and soon become barriers to the Enterprise transformation needing expensive reworking.
3) The competitive balance rapidly tipped in favor of the Enterprises that adopted full Enterprise wide ERP (IoT) integration to transform their Business capabilities forcing the pace onto late adopters who lacked experience to implement rapid ‘catch up’ deployments.
4) Enterprises with ubiquitous common ERP (IoT) deployments quickly discovered new insights to drive a further round of new best ‘practices’ that created Industry sector transformation in addition to Enterprise transformation.
5) The Enterprises that attempted to customized ERP (IoT) to make it fit their existing Enterprise processes rather than adjust to the new Business models, and/or, failed to use uniform deployments, became uncompetitive. To recover their competitive capabilities required substantial investment at the very moment when their revenues and profits were falling.
Keeping the above comments in mind, and returning to the topic of using IoT for Building Management. The obvious approach for such a separately managed entity in the fixed overheads infrastructure budget is to make the moves that reduce the costs as currently defined in Budgets. There is an immediate Business case for lower costs around maintenance, and energy costs alone.
But is that really addressing the reality of what is in Buildings and the changes in how an Enterprise is using not just the building but its internal services as well? With ‘hot desking’, intelligent office machines, and every worker using multiple devices, the term a ‘Managed’ Building should refer to a dynamic set of workplace Assets that need to be optimized in ever changing groups to match new Business Models.
In addition the Budget model for overheads needs to be considered too. The growth in the Digital Services economy requires a shift in business model cost allocations from Capital Expenditure, CapEx, with its unallocated overheads to the flexibility of directly allocated costs for each Asset utilized. To achieve Operational Expenditure, OpEx, costing it will be necessary to be able to monitor and manage each Asset individually.
The reactive Smart Services Digital Business models require OpEx based costing allocation to activities. IoT based Asset Registers take on a new meaning when each Asset is a dynamically monitored and managed entity as does the management of workplace resources to align to Business activities and support workers.
An IoT Building Management solution is the crucial first step towards these changes, but equally it could create a self contained and isolated IoT management domain that is incapable of scaling to support the real Enterprise requirement.
It’s not only Building Management that is at risk of course; the same challenges apply to IoT pilots and projects across the enterprise. The benefits of well-managed, standardized, ERP rollouts have transformed Enterprises and the competitive expectation of any number of commercial sectors. Unfortunately, the cost and difficulties of correcting poor ERP rollouts are all too recognizable as well.
In the same manner that Web Servers, Internet Access, Mobility and Workplace collaboration all entered the Enterprise; someone, somewhere in your Enterprise is putting in place a good commercial solution for their requirements, and in do doing creating a potential future problem for the Enterprise. In all these cases waiting to see overall demand proved to be a poor strategy!
New C-Suite
