how digital transformation impacts fm delivery, outcomes and … · 2019-09-06 · how digital...

How Digital Transformation Impacts FM Delivery, Outcomes and ValueGlobal Shifts and Implications for Australia

4th September 2019

Resource

Value

Exponential

Linear

“If you always do what you always did, you always get what you always got.”

- Albert Einstein

Why Digital Transformation?

2Source: Frost & Sullivan

Smart Built EnvironmentsVariation in Rollout Timeline due to Application-related Complexities


Urban operating systems (OS) are sophisticated software platforms that process data collected from the millions of sensors embedded in a city’s buildings and infrastructure and also through user’s mobile devices, and generate suitable reactions, City OS operates using the elaborate sensor network and extensive cloud infrastructure

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Top Transformation Themes for Innovation in Business Model and Technology

The Future of FMBusiness model innovation and technology innovation are interlinked and keys to success in the future of FM

NOWBusiness model focusing on contract-based outsourced services in service bundling, integration, and internationalization.

FUTUREBusiness model focusing on technology-led and outcome-based circular approaches, e.g., XaaS, likely to open new and diverse opportunities.

Business Model

Technology

NOWCustomers’ capital improvement programs were the predominant driver for technology adoption

FUTURETechnology to gradually transfer to OPEX via performance contracting and XaaS models.

Connectivity is the key enabler

Unbundling of value chains

New revenue models will steer towards value-based

Software-oriented for future scalability

Open innovation and collaboration

Artificial Intelligence

Big Data Analytics

Edge Computing

Automation

Blockchain

Source: Frost & Sullivan

Connectivity is the Key EnablerDigital transformation and Big Data will drive the evolution from computer aided facility management (CAFM) solutions to cloud hosted data analytics and dedicated Big Data solutions for the FM industry

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• Resource optimization and process/productivity improvement

• Building management systems• Technical services and

preventative maintenance solutions

• Underutilized real estate assets can be identified through customized dashboards in order to cut operational costs

Big Data Analytics Cross-industry

Use Cases

Risk, Security, & Intelligence

Process/ Productivity Improvement

Resource Optimisation

Customer Insight

FM Market: Big Data Analytics Use Case Examples

JLL• Launches PinPoint – tracks human traffic in order

to provide insights on facility strategies• Hired former Google exec to lead Digital Product

Development• Acquired Corrigo – SaaS platform for field

services

UEM Edgenta (Malaysia)• Smart Facilities Management Solution based on

Microsoft’s Azure IOT Hub and Machine Learning

CBRE• CBRE 360 that uses Microsoft’s Azure Digital

Twins for analysis

Downer Group (Australia)• Utilizes Cisco Kinetic platform, previously dubbed

the “Smart+Connected Digital Platform”.

CASE STUDIES (2017 – 2018)


Software-oriented for Future ScalabilitySoftware-based business models will act as the unifying force between computing, networking, virtualization, automation, and storage needs that will allow them to access new revenue streams.

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Sodexo sourced and selected Qualsys’ software solution

BGIS and Trimble collaborated on a world's first mixed-reality program using Microsoft HoloLens and Trimble technology. Trimble rolled out to all BGIS customers in Australia.

JLL acquired ValuD and have started using IBM TRIRIGA and IBM Maximo ecosystems,

ISS: Predictive cleaning using MCS sensor-enabled software in combination with Proximus’ Internet of Things network

CASE STUDIES (2017 – 2018)

Future scalability will not only boost revenues, but also will increase customer loyalty. For example Nike’s fitness business will transform into a holistic software-oriented solution business through its connected devices and will open new revenue sources.

Software-based platforms are the key enablers for future scalability within non-software businesses.

The high average net margin of software companies at around 20% makes the software-based business more attractive to other industries, with average net margins at around 7%.

Software-based interfaces will attract customers by creating additional product /service value. For example, Phillips launched the interface product Hue, an individual wireless lighting system, which can be connected and handled by mobile devices


FinancesOnline Ranking: 20 Best Facility Management Software of 2018

Hippo CMMS ARC Facilities

Quick Base Infraspeak

ServiceNow Facility Management 360Facility

iLab Core Facility Management WebCheckout

CBRE ServiceInsight ARCHIBUS

Nexudus Spaces UpKeep

Skedda Bookings Rosmiman IWMS Global Site

OfficeSpace Software RecTimes

FMX WebTMA

AiM Space Management Scout Systems HQ

Examples in Australia: Serraview, FM Innovations, BEIMS (Pulse), Trimble, Mex, Pronto Software, Service Works Global, etc.

Unbundling the Value ChainBackward and forward integration is the first step for FM companies to add value to the buildings industry value chain

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Facilities Management in the Building Lifecycle

CBRE• Acquired FacilitySource (provider of

technology-based procurement and facilities management solutions)

JLL• Acquired ValuD Consulting (technology

consulting services for facilities management software systems and IoT)

• Acquired Five D (corporate real estate services)

• Acquired Integral UK (provider of mechanical and electrical property maintenance)

GDI Facility Services• Acquired Ainsworth (HVAC-R, mechanical,

electrical and technical services)

First Response Group• Acquired Robinsons M&E (commercial

boiler, air conditioning and electrical installation)

CASE STUDIES

Feasibility Design Approvals Construction Commission Operations Maintenance Capital Projects

• Advise developers

• Identify risks

• Establish suppliers network

• Identify stakeholders

• Risk assessment

• Defects liability• Appointment of

contractors• Develop asset

knowledge• Appoint of staff for

building

• Assess risk• Preventive

maintenance• Reactive maintenance• Mitigate risk

• Impact of design• Identify suppliers• Risk assessment

• Selection of FM provider

• Identify supply chain

• Engage with stakeholders

• Performance monitoring

• Contract management• Soft services• Waste management• Energy management

• Develop business case

• Commission specialists / consultants

• Project management

Facilities Management


Open Innovation and CollaborationCollaborations will focus on skill sharing in technology, productivity, workplace management, energy and sustainability. Industry associations and institutions will also see increased collaboration and partnership

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Rationale for Open Innovation

Far-reaching integration

Innovation spanning multiple disciplines

Diminishing cycle times for innovation

Risk and revenue sharing leveraging best-in-class technology

Enhancing creativity, thinking out-of-the-box

Access to unique capabilities

Challenges /Success Factors

Intellectual property rights, confidentiality

Exclusivity

Commercialization plan, business model (win-win)

Conflicting business relations (supplier?

customer?)

Alignment of objectives (knowledge vs. product)

Openness, mutual trust,credibility (NIH)

Project time lines/duration

Cultural fit

Carillion & WiproCollaboration focus: IT and data analytics• Provision of front end data analytics capabilities to deploy

technology and XaaS models for more efficient FM services

SWG & RackspaceCollaboration focus: Cloud solutions• Cloud solutions enabled by the partnership with Rackspace

are taking SWG into the data analytics and XaaS sector of FM solutions

Sodexo (US) & SureWashCollaboration focus: Added value services• Focus is on hygiene improvement in healthcare facilities, as

well as being leveraged into all other buildings and applications

IFMA & RICSCollaboration focus: FM industry support and transformation• Launched a global collaboration to support innovation and

skills development for next generation FM services• Stated goal is “collaboration to further develop and

professionalize the field of facility management”

CASE STUDIES

Rev

enue

Service Pipeline

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60


New Revenue Models Will Steer Towards Value-based Innovative suppliers will increasingly move away from cost efficiency solutions to target senior executives with value-adding business productivity propositions (CEO, CFO, CTO, COO etc.)

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Shifting the FM conversation towards business productivity will necessitate engaging more directly with higher levels of management within the client organization. The combined strategic goal is to provide better service with a bigger impact to existing clients and to increase the appeal to new target customers.

Chief Data Officer• Sony Music hired Sol Rashidi as Executive

Vice President and Chief Data Officer

Chief Automation Officer• Microland appointed Satish Sukumar as

Chief Automation Officer

Chief Talent Development Officer• Edelman appointed Marie-Claire Barker

global chief talent officer

Chief IP Officer• Coolpad appointed Nancy Zhang as Global

Chief Intellectual Property Officer

CASE STUDIES

Chief Disruption Officer• Techstra Solutions hired Nancy Gill as Chief

Disruption Officer

The C-suite (CXO) wants to see a value proposition based on guaranteed business improvement outcomes so the challenge to the service provider is to manage the risks to the business and select the right metrics and pain points to address.

The accepted benefit to the vendor is HIGHER MARGINS and BIGGER IMPACT but that impact needs to be clear and the FM firm has to be able to deliver and demonstrate tangible business improvements.

Changes for FM firms to address include:

Furthermore, new priorities in large companiesmeans the C-suite is expanding to represent the

emerging priorities for firms in the field of talent, technology and territory. New executives in these

key positions will be attractive targets to suppliers of FM and professional services.

The C-level customer expects the service provider to have a deep understanding of the client organisation’s corporate vision, mission and performance

The CXO expects a provider to bring a holistic approach to enhancing business productivity (workplace + FM + technology)

The CXO expects tangible and measured improvements in business metrics that influence productivity, which may be financial, social or environmental

The CXO expects continuous improvement and innovation from suppliers, not just a one-off impact


Artificial IntelligenceArtificial Intelligence helps refine end-user experience in facilities management

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ServicesThe FM services are made known to end-users by showing service features, specifications, and estimated pricing. The service sales, usage, maintenance, and related feedback can be tracked by the FM provider.

AI Application Scenarios

CBRE• Partnered with Litbit, Inc, a

leading AI company, to manage facilities maintenance within data centers and critical environments.

JLL• Invested $3.8 million Series A

funding to AI start-up, Foyr

CASE STUDIES

Key Implications for FM Players• FM players will need to reskill

themselves and also be provided with the resources in order to adopt AI powered disciplines in service provision

• Adoption of AI will be parallel in Big Data analytics, IoT, robotics, etc.

Artificial Intelligence

AI for sales and marketing and

customer service

AI transforming HR processes

AI transforming internal

communications

AI is improving business data analysis

FM End-user Experience

Machine Learning AlgorithmsMachine learning algorithms are applied to this vast amount of user generated data that identify at-risk customers / user who may be unhappy with the FM services. Analytical insights derived from AI-tools will enable effective-decision making and rectification by FM companies.

Volume of User-generated DataVoluminous user-generated data are fed into machine learning tools that help organize information in order to convert them into useful analytical business insights. The algorithms learn from existing data and information to derive insights and provide suggestions to FM providers and end-users instantly.

Users / Customer FeedbackData generated from end-user feedback and maintenance-related calls is real-time information that enable FM companies access to useful analytical insights.


Assisted automation

Unassisted automation

RPA control center

AutomationRobotic Process Automation (RPA) is an application of business process automation technology by means of a software with AI and machine learning capabilities to manipulate high volumes of data, process transactions, trigger responses, and handle repeatable tasks that were earlier performed by human

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• Improves end-user experience• Reduces project handling

time

• Automation using sensor technology

• Alerts the user in case of error

• Allocation of tasks to individualmachines

Services in FM impacted by Automation

Façade cleaning and fault inspection Window cleaning Ceiling cleaning

Janitorial services by sensor Waste management M&E inspection

RPA Architecture

Scheduled cleaning Unscheduled cleaning Security

SMM (FM member of Surbana Jurong, Singapore)• Uses drones for building façade

routine inspection

Compass Group• Partnered with Avidbots Corp for its

Neo self-driving floor-cleaning robot with enhanced cleaning productivity and performance

CASE STUDIES

Key Implications for FM Players• Robotics are expected to reduce

dependency on labor, in which labor shortage and efficiency is a challenge for many FM companies

• Cost can be optimized with reduced labour

Automation

Akitabox (FM software company)• Partnered PrecisionHawk to improve

its drones for FM services


Big Data AnalyticsFM companies with capability in Big Data Analytics will be able to assist their customers in improving productivity and taking appropriate business decisions

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• Big Data plays a critical role in the development of smart cities as the concept of converting a city to a smart city involves massive levels of data management and automation.

Big Data Applications in Different Workplace Scenarios

ISS• Partnered with IBM Watson

Partnered with IBM Watson• Partnered with Sisense for its business

intelligence software

CASE STUDIES

Key Implications for FM Players• Big Data Analytics will be important in certain

services such as workspace management and energy management

• FM companies must leverage this technology to improve customers’ productivity, demand planning, predictive maintenance, savings, and even marketing activities

Big Data Analytics

Engie• Selected Azure (Azure IoT Hub and

Azure Machine Learning) to improve data analytics

Government and Smart Cities

• Several sensors are deployed through a city to track pollution, traffic, movement of people, safety of the population, electricity usage, and dumping of wastes wherein Big Data will support governments by providing real-time data and analytics of this data will help in decision-making and city maintenance.

• Banking and financial services involve several transactions in a day that are difficult to keep track. Big Data analytics combined with several other technologies such as robotic process automation, cloud computing and blockchain can help banks store permanent records of transactions.

Banking and Financial Services

• Big Data analytics help banks for future reference, and help prevent the occurrence of fraud.

• With the digitization of healthcare, there is a large amount of patient data available through apps used by the public.

• Such large amount of user data can be analysed to derive healthcare analytics which can help provide timely treatment to patients, reduce the costs involved in treatment and helps improve the quality of life.

Healthcare


BlockchainCorporates are experimenting as much as startups; the challenge for corporates is attracting and retaining talent with experience managing blockchains.

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What it is

Smart FM Contracts

Integrated FM Services IP IoT

Software-based contracts,automaticallyenforcing breach consequences

Integratedgateways for identification and ownership records

Registration system, with use-permission parameters

Ledgers tracking device existence

Publicly recorded transactions, with embedded rules,that maintain privacy

Permanent registration system, with timestamps for ownership proof

Digital stampingof content to flag pirated material

Instantaneous and secure information transfers among connected objects

Reduced back-office costs

Reduced corruption andmismanagement

Greatly enhancedtransparency for file sharing

Improvedcoordination, with no single points of failure

Future Blockchain Applications Beyond Banking, Global

Why it will gain traction

Top benefit

JLL and Lendlease• Launched Propell Asia, a

platform that leverage a host of technologies, including blockchain

CASE STUDIES

Key Implications for FM Players• FM companies should consider

blockchain application as a mean to reduce cost and time for transactions, increased transparency , enable fraud detection, and enhance security of systems and services.

• Blockchain will be useful in compliance matters, workspace management, and energy management (billing or consumption)

Blockchain

Power Ledger’s Blockchain technology trialled in Fremantle (Western Australia) across solar PV plant, distributed rooftop solar, a precinct sized battery, an electric vehicle charging station and precinct water treatment and capture systems. Aim to create efficiencies between dispersed water and energy assets. Meter reading, invoicing and settlement services provided through the network


Edge ComputingThe edge computing device operates close to the data source thereby causing a cluster of edge computing devices to form an ingestion point for data and carry out tasks such as network switching, routing, and load balancing of data.

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Edge powered IoT devices utilize AI algorithms and help spot parking slots, reduce car parking downtime, collect real-time navigation data, and also find tremendous applications in deployment of self-driving cars that require fast-paced real-time data processing for continuous communication between different systems.

Edge computing finds several applications in critical facilities such as data centers, hospitals, and industrial processes. Edge computing responds to real-time anomaly data, early fault detection at the machinery level, optimizing maintenance schedules based on sensor data, and ensures efficient operation of equipment.

Deploying edge computing devices helps optimize energy consumption by managing device usage efficiently. It also enables an interconnection between various infrastructure devices such as smart meters, appliances, and energy sources to enable quick data processing that helps in predictive purposes such as detecting equipment failure and in making adjustments to energy distribution.

Edge computing is deployed for analysis of processes in manufacturing facilities and helps in tracking processes. This also helps improve worker productivity as well as safety.

Key Implications for FM Players• FM companies should leverage

edge computing in service provision of cleaning, M&E maintenance, and energy management

• Digitalization is key: combination of edge computing, blockchain, and Big Data analytics will impact the way FM services are dispensed

• Leverage of edge computing in FM means that the use of machines with AI, robotic abilities, and learning capability will be inevitable

• With actionable insights, FM players are able to perform actions automatically

Edge Computing• Car park management

• Real-time data processing

• Real-time data• Early fault

detection

• Energy management

• Predictive maintenance

• Improved productivity

• Tracking and monitoring


Key Implications for FM Market Participants: Cybersecurity


Source: “Understanding the Cybersecurity Threat Landscape in Asia Pacific: Securing the Modern Enterprise in a Digital World”, Frost & Sullivan study commissioned by Microsoft, June 2018

The potential direct economic loss of cybersecurity incidents on Australian businesses can hit a staggering A$29 billion per year, the equivalent of almost 2% (1.9%) of Australia’s GDP.

More than half of the organizations surveyed in Australia have experienced a cybersecurity incident (55%) in the last five months

1 in 5 companies (20%) are not sure if they have had one or not as they have not performed proper forensics or a data breach assessment

66% of respondents stating that their enterprise has put off digital transformation efforts due to the fear of cyber-risks

4 in 5 (84%) organizations in Australia have either adopted or are looking to adopt an AI approach towards boosting cybersecurity

As more building equipment becomes networked, the silos of IT and OT must work in collaboration to maintain uptime, integration, security, and real-time visibility. In the future, more secure systems, devices, and advanced authentication techniques are expected to enter the smart buildings industry. For smart building solution providers, it will mean adopting more robust cyber governance standards and compliance, communicating cyber defence capabilities of their value proposition, determining the right collaborations and partnerships, as well as increasing customer/service partner awareness.

A Question of Perspective


System Shock as a Good thing!


Frost & Sullivan, the Growth Partnership Company, works in collaboration with clients to leverage visionary innovation that addresses the global challenges and related growth opportunities that will make or break today’s market participants.

For more than 50 years, we have been developing growth strategies for the Global 1000, emerging businesses, the public sector and the investment community.

Is your organization prepared for the next profound wave of industry convergence, disruptive technologies, increasing competitive intensity, Mega Trends, breakthrough best practices, changing customer dynamics and emerging economies?

www.frost.com

Ivan Fernandez

Industry Director

Phone: 02 8247 8912

Email: [email protected]

http://www.frost.com/

how digital transformation impacts fm delivery, outcomes and … · 2019-09-06 · how digital...

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