The art of a good finance team is knowing when costs need to expand to support growth and spotting opportunities to streamline outgoings and improve efficiency. Typically, this revolves around the company’s greatest asset – its talent. Assessing pay, incentivising
performance, ensuring KPIs are met, and managing expenditure are at the core of the finance function.
Whilst this fundamental remains true, the increase in uptake of technology and digital tools has expanded the scope of the finance team. Today, they play a key role in the wider business progression and are therefore expected to make informed decisions on
a wide range of factors that could drive growth and profitability.
Until recently the energy, productivity and security implications, of smart building management systems were only of interest to facility managers and electrical contractors. Its importance is now more widely appreciated, improving the comfort and productivity
of employees, and reducing expenditure through enhanced energy efficiency.
Setting, and reaching, energy targets
A staggering 36% of all energy used today globally is consumed within our buildings, representing a huge potential cost saving. To drive this number
down in commercial environments, we first need the means to measure our current energy use. At Schneider Electric, we now have sight of 95% of our buildings’ energy use in the UK. We are using this information to identify where energy is being wasted and where
we can reduce our energy use. We have targets to reduce energy usage by 5% each year, benefitting both the environment and our overall expenditure.
Smart devices enable real-time measurement and optimisation. In the future, smart buildings will become completely flexible and adaptive to a variety of uses within the same physical building. Spaces will become more interactive and agile to the needs of
the occupant. Behind these buildings will be a series of artificial intelligence-enabled tools that will be able to predict emerging faults, dynamically optimise heating and choose between different sources of energy.
Over the course of its existence, 20% of total building costs go on its creation, and 80% on operation. Broken down further, 40% is spent on energy and 30% on maintenance. The implementation of any smart building technology represents a massive long-term
saving – a study by the American Council for Energy found a cost saving of 32% when using connected HVAC and lighting systems. For the businesses occupying offices, smart buildings offer a return of 10 to 1 on investment. Easy to introduce features, like lighting
and motion sensors, lower energy bills and reduce maintenance costs and directly impact and improve any businesses bottom line. These basic upgrades are fast becoming some of the biggest business open goals.
Smart buildings, happier workforce
It’s now widely accepted that productivity is an essential driver of profitability. While working from home become the de facto choice last year, research found 71% of us are struggling to adjust to remote work, 65% say maintaining employee morale has been
a challenge, and more than a third of businesses are facing difficulties with company culture. While the eventual return to work remains uncertain, it’s clear more must be done to promote productivity, regardless of location.
These findings are signposts employers can’t ignore. Talent is the single biggest cost for most businesses and attracting and retaining the right candidates is challenging. The workplace environment, well-being initiatives, flexibility, and brand image –
including sustainability credentials – are all increasingly important to employees and must be a priority for finance teams.
Smart building technology helps to provide greater convenience, comfort and wellness, both inside and outside the workplace. It improves the office environment on a granular level, providing comfort or monitoring indicators such as air quality or humidity
that in the end benefit employee productivity. We have all worked in overly hot or cold, stuffy or poorly lit environment, and can appreciate its impact. To drive flexibility outside the built environment, smart building technology is connected to mobile
applications that can automatically update employees on office closures, transport issues and help with personal development, all on a single platform.
Considering that roughly 60-80% of all business costs are the workforce, their productivity and wellbeing cannot be overlooked. Implementing smart building technology has the potential to drive costs down, all while improving the output of the business.
Building resiliency through agility
If the pandemic taught finance anything, it’s that business operations need to be rock solid to meet the changes ahead. For true resilience, a business must have a building infrastructure that can adapt to circumstances and ensure companies can continue
to operate efficiently and profitably.
This, in turn, requires a building management system that is able to support any changes, aggregating and integrating data to drive efficiency, and improve the decision-making process. Crucially, the finance department must be able to interact and understand
the intricacies of building performance in order to control costs.
Putting building management on the finance agenda
There is now a push towards a prosperous post-pandemic future, and data and technology will lead the way. Now is the time to create smarter buildings with joined-up systems, enabling the monitoring and automation of key processes, including staff seating
arrangements based on capacity and occupancy levels, and smart heating, ventilation and lighting for health benefits and comfort, whilst streamlining energy costs and meeting sustainability goals.
There is an open opportunity for financial and energy savings, as well as a productivity boost, but companies can also benefit from enhance ROI from spaces that have lower carbon emissions and higher levels of comfort. Building management systems will clearly
be the next big finance priority, and a key enabler for success in the coming years.