Industry Digitization Trends Leading to Smart Building Market Growth
Business transformation using Smart Building technology has become a readily accepted phenomenon within today’s industry. Implicit within this concept is radical change within a short span of time. Those that embrace transformation will remain relevant to the future that rapidly approaches.
Everyone accepts that the digitization trend has already affected their industry. The level of impact varies, of course, but the trend remains the same. In one survey, the relative impact of digitization across industry sectors has been charted. The results certainly point the way to trends evident today.
We can see, for example, that the industry sectors of Information and Communications Technology, Media, Professional Services, and Finance & Insurance have led the digitization trend. This confirms our experience in the digital interactions we find customary every day.
The Smart Building Market Opportunity
More interesting than the digitization sector leaders, however, are those industry sectors that have relatively low levels of digitization. Particularly interesting are sectors such as Oil & Gas, Utilities, Chemicals & Pharmaceuticals, Basic Goods Manufacturing, Mining, Real-Estate, and Transportation & Warehousing, which have physical assets that are primed for further digitization. Not only does this confirm our everyday experience, but it also points out the incredible opportunities available in industry.
These capital-intensive sectors are primed for asset digitization. Smart Building technologies will play a key role in capitalizing on the early stages of this business transformation opportunity.
For example, the longevity of commercial buildings qualifies them as hard assets of significance. Asset digitization via tech disruptors has already changed the CRE market. As a Wharton research article has noted:
“The premise of the tech disruptors is simple: Let the CRE companies own the assets and we will own the platforms that enable residents and tenants to access what they need, when they need it, whenever they need it, using today’s real time, Big Data and cloud technologies.”
IoT platforms have interposed themselves between the tenants and the traditional landlords, marginalizing the underlying hard asset. These platforms have become the new Application Layer that facilitates the end customer’s primary interaction with the CRE space. This Application Layer provides visibility to building status and services, to trouble ticketing and resolution, to lease transactions and renewals, to whatever they can envision as a service.
IoT has captured the attention of many because of the growing understanding of how real-time data impacts operational efficiency. Energy efficiency represents only one such example. In the current transition from products to services, the value proposition of IoT goes far beyond the data itself.
IoT has the capacity to drive a customer’s User Experience (UX), delivering a service that seamlessly meets the needs of sustainability, productivity and worker comfort. "User experience" encompasses all aspects of the end-user's interaction with the company, its services, and its products.
“The first requirement for an exemplary user experience is to meet the exact needs of the customer, without fuss or bother. Next comes simplicity and elegance that produce products that are a joy to own, a joy to use.”
From a UX perspective, IoT delivers needed data in a process that eliminates frustration and delays in the service delivery.
Leaders Lead, Followers Disappear
The trend towards digitization has been embraced to varying degrees. There will always be leaders and followers. McKenzie & Company conducted an in-depth survey of 150 large companies around the world to evaluate 18 practices related to digital strategy, capabilities, and culture. They consolidated the results into a single, simple metric (Digital Quotient or DQ) that represented the digital maturity of a company.
This wide range of performance may not be shocking from the perspective of statistics. It also wouldn't be shocking to business leaders, since no one would provide a subjective self-assessment of their own companies as “below average.”
The fact remains, however, that the majority of companies are below average in their relative digitization. As the digitization trends march on across every industry sector, those large companies that are objectively below average will bear the consequences of their follower status.
Conclusion
The Smart Building market has been taken up by established digitization leaders. Emerging leaders have dispensed with pilots and gone to implementations. The laggards will awaken when their business results acutely match their low digitization status.