The DBC were an association partner of PropTech Connect (PTC) this year, where we launched our Working Groups and accompanying Best Practice Guides which enable members to collaborate on its stated goals, encourage membership expansion and form partnerships with other relevant trade bodies and initiatives.

As outlined on the About page, a key driver for the formation of the DBC is the consensus among founding members that the growth of the digital buildings market has been constrained by uncertainty and if key issues are not consistently addressed, there is a significant risk that it will not fulfil its potentials. These issues include the need to demonstrate ROI and adopt a holistic approach to calculating it, which the ‘Project costing and the business case’ working group aims to address.

Collaborative efforts on this working group include the engagement of Cost and Project Management Consultants to align digital outcomes with costs early in the project lifecycle, aiming to mitigate value engineering challenges and ensure comprehensive value.

To kick off the initiative the DBC’s Executive Officer Justin Kirby moderated the A Holistic Approach to Maximising ROI in Smart Building Tech panel in the main hall at PTC last week with the following participants:

• Emilia Cardamone, Associate Director – Real Estate Digital at Turner & Townsend
• Mike Hook, DBC Treasurer and Co-founder and Director of LMG
• Jonathan Treece, Director – Digital Lead | The Design House at Barclays
• Johan Wiksell, Head of smart homes and buildings at JM
• James Kendall, European Regional Director at SwiftConnect

OVERVIEW & SUMMARY

The Panel Discussion on ROI of Smart Buildings enablement and Digital Transformation in the Built Environment more broadly brought together professionals from real estate, technology, and finance to explore the complexities of quantifying the return on investment for smart building technologies. The participants highlighted the need for strategic visions that have to accommodates diverse sector requirements (e.g. Commercial Real Estate, Residenttial and Public Sector including Healthcare and Higher Education), while addressing challenges such as poorly defined specifications, the necessity of energy efficiency solutions driven by sustainability mandates and regulatory compliance, as well as post-COVID occupancy issues.

The conversation underscored the importance of a holistic approach to ROI that includes quantifiable factors like energy, air quality and space savings, as well as the qualitative aspects of employee productivity and user experience. Key outcomes discussed included the creation of value through effective user engagement and operational security, with recommendations for starting with clear, user-focused strategies, identifying actionable use cases and their success metrics, as well as planning for scalability.

Action items were proposed to enhance smart building enablement as part of wider digital transformation programmes, the reframing of ROI around value and emphasizing the need to plug the project-operations gap given the increasing digitalisation of the AEC Industries and Operations.

Introduction and Background

• Participants introduced themselves and their roles in various companies
• Discussion focused on smart building technology and broader return on investment (ROI)
• Participants represented diverse sectors including real estate, technology, and finance

Current State of ROI in Smart Buildings

• ROI for smart building technology is diverse and challenging to quantify
• Focus on reshaping thinking around strategic vision and goals
• Different solutions needed for various sectors (CRE, Residential and Public Secto)
• Poorly defined specifications and use cases hinder realistic budgets
• Sustainability requirements driving implementation of energy efficiency solutions
• Regulatory compliance as a key driver for smart building adoption

Proving Business Case and Holistic Approach

• ROI differs by building, client and industry
• Energy and space savings are more easily quantifiable
• Focus shifting to employee productivity and experience
• Holistic approach considering area-level benefits (e.g. microgrids, mobility solutions)
• Standardization and scalability of smart building solutions
• Importance of adaptable and upgradable smart building systems

Value Creation and User Experience

• Five key outcomes: effectiveness, efficiency, experience, health, security, and sustainability
• Emphasis on creating valuable ‘water cooler moments’ in hybrid work environment
• User experience becoming a primary focus, especially in talent retention
• Visualization of benefits crucial for presenting business cases to C-level executives
• Balancing cost savings with improved user experience

Practical Guidance and Future Directions

• Start with a clear strategy focused on user value
• Identify key use cases for early implementation
• Consider open ecosystems, standardization, and security
• Plan for scalability from the beginning
• Reject the idea that benefits are non-quantifiable
• Find the right stakeholder to champion smart building initiatives
• Prioritize different aspects and implement in stages
• Bridge the gap between (digital) construction and (digital) operations

Action items unassigned

• Develop a strategy for smart building implementation focusing on user value
• Identify key use cases and the metrics for their success for early implementation of smart building technology
• Create a plan for scaling successful smart building solutions as part of wider digital transformation plans
• Work with experienced teams to deliver realistic budgets and models for smart building projects

The DBC are also association partners of the Smart Buildings Show at ExCel London next month (9-10 Oct), where the majority of our founding members will be discussing the key issues the council aim to address as part of the conference. Justin will be moderating a follow-up Rethinking Smart Building ROI and the business case(s) panel at the show on Thursday 10th from 10:45 to 11:30 in the Management & PropTech Theatre with the following participants:

• Jess Costanzo, DBC Chairperson and Commercial Director at Simmtronic
• Daniel Watson, DBC Steering Committee member and UK Director at Hereworks
• Jonathan Wilson, Partner at Gardiner & Theobald LLP
• Shreya Sheth, Associate Director at PATRIZIA SE
• Viktoras Cesnulevicius, Senior Digital Buildings Consultant at DBC founding member Facility Performance Consulting

In the meantime, stay connected by following the DBC on LinkedIn for the latest updates, events and insights from the founding members and reach out to learn how to join our community and contribute to our mission.