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hi everyone my name is Scott Holstein and I'm the director of marketing and business development for computrols thank you all for attending our webinar today as you probably know computrols is a manufacturer of building automation systems you'll primarily find our technology in commercial real estate hospitals data centers and higher education facilities some of our more prominent customers include the Statue of Liberty Ellis Island Williams Tower Chase Tower Paradis Hotel and and the mercedes-benz Superdome in addition to our headquarters just outside of New Orleans Louisiana computrols also has branch offices in Southern California Houston San Antonio and Washington DC we also support our customers both domestically and internationally through our service and distribution partner Network since the company began 35 years ago it's been our mission to empower our customers to manage their own building automation system and that's the topic we're going to discuss quite a bit here today our goal for today's webinar is to make you aware of some additional cost to expect beyond the initial purchase of your building automation system and which of those costs you might be able to mitigate by choosing the right system or the right service partner for you we're going to do our best to get through all this information in about 30 minutes or so and leave some time for questions at the end so without further ado let's go ahead and get started as I mentioned my name is Scott Holstein I've been working at computrols for just about three years now the company manufactures building automation controls for HVAC lighting access and fire alarm systems and controls is best known for our lifetime warranty controllers simple to use software and our unique ability to integrate to open and proprietary third-party building automation systems this topics really important because all too often we split up the cost of a building automation system into first cost and operational cost and the group's making these decisions aren't always communicating and on the same page in life when we make a long term or a large-scale purchasing decision we don't necessarily choose the cheapest option so as an example of that I think everyone can relate to purchasing a mattress you spend a third of your life sleeping some of us spend probably a little bit more most of us probably spend a little bit less but you're gonna spend quite a bit of time on your mattress and your mattress is something that you're gonna have a very long time most mattresses if you take care of them will last 10 plus years and we all know how important sleep is to our day-to-day life our health our happiness so investing in a mattress seems to make sense and same goes for an automobile so your car your truck is gonna be a big part of your life particularly if you're commuting to work every day or you're picking up your kids from school you want to make sure that you have a car that's dependable that you're not going to have to worry about you bringing in for maintenance on a regular basis a car is a big investment it's something that you're going to have to deal with on a daily basis you're going to have it for probably five or more years and when you think about some of the ongoing costs of a car besides the regular maintenance you think about now what is the gas mileage that you get if you get a vehicle made by certain manufacturers you might have to take that vehicle to the manufacturer or to a special mechanic to get it worked on so you think about those ongoing costs and then finally an example that may not be for everyone is plastic surgery but even if you're not someone who would get plastic surgery I'm sure you can relate that you probably wouldn't choose the cheapest doctor to do an operation on your face or your body or or any part of you really and you think about you know the common factors here this is something that you're going to really depend on for on a day to day basis it's going to determine your your happiness how people treat you and ultimately if it's not done right it could really cost you a lot of money and a lot of misery as time goes on so the reason I bring these three examples up is because everyone can relate to buying a mattress a car and some people can relate to having some plastic surgery done but for some reason you know we look at these purchases and we say all right this is something that we're willing to invest in and this is why and I think the common factors of these three items and a building automation system are the time you spend using the product on a daily basis you're going to use your building automation system a couple times a day if not more maybe you know a few times a week at the very least so it's something that you're gonna have to deal with on a daily basis it's also something that's going to determine the safety and health of your building occupants so much like a mattress or any of these examples you know you're gonna you're going to be determining people's day-to-day happiness based on what kind of system you have and how well you're able to manage that system and then there's the ongoing expenses I think you know you think about ongoing expenses for a vehicle are really the ones that come up the most is you know how often am I gonna have to get this thing fixed because certain vehicles do have a reputation for lasting a bit longer I think that's something that factors into people's decision when they go to purchase a car or truck and then finally how long you're gonna own the products a building automation system is likely going to be in your building a minimum of five years as many as twenty or thirty or even more so there are some common factors here and we really want to look at these factors particularly the ongoing expenses as time goes on so in our presentation today we'll touch on the initial investment we'll talk about the initial investment in a building automation system for new construction versus existing buildings talk about what your options are in those situations well talk about the ongoing expenses and what needs to be considered what needs to be budgeted for as time goes on and also some things you might be able to take on in-house that could save you in the long run and then of course we'll give you some questions to ask your potential vendors as well when you're trying to figure out you know what's the best investment in terms of a building automation system it's not always an easy decision so we'll give you some questions to ask your vendors to vet them and get a better sense of what they have to offer then we'll talk about justifying costs specifically around energy usage and then incentives and some other things as well and then we'll talk about trying to future proof proof your building when you're talking about the lifecycle of anything you have to consider as time changes technology changes and what is that going to look like in ten years from now and is my current building automation system going to be able to handle it and then finally getting your organization on board all too often there are separate departments as a department for making the initial purchase and then there are onm teams and those departments work separately they have separate budgets so we'll talk about how to get everybody on the same page so the initial investment for new construction is a pretty straightforward process generally you have a general contractor who goes out and hires a mechanical contractor and the chemical contractor often goes out and hires a controlls contractor well the mechanical contractor has a pretty good idea that he or she needs to be one of the lowest bidders to win that work so as a result they're going to go out there and find a controlls contractor who's going to be one of the lowest bidders to make their bid one of the lowest bids and at the end of the day you have to think is that really what I want with a building automation system it's one thing when you're talking about ceiling tiles or something that is a little bit easier to and service over time that's not going to have as big of an effect on your day-to-day and occupants in your buildings day-to-day so your building automation system vendor is gonna be in your building on a regular basis and they're going to determine a lot in terms of the comfort safety and health of your building occupants so it's not quite apples to apples when you're comparing vendors in the case of new construction now existing buildings are a little bit trickier so existing buildings typically are going to have a building automation system in place and maybe you're looking to make a change or an improvement in some way so integration is the first option and probably the most economical option off the bat integration allows you to leverage the majority of your in your existing infrastructure and replace the headend computer and maybe a couple of controllers on the supervisory level so this strategy is definitely gonna save you money in the short term is likely going to give you a lot of the functionality you might be looking for and fixed some of the issues but you have to keep in mind the path moving forward so if you go and integrate to a legacy building automation system what happens when those controllers begin to fail do you have a another hardware solution lined up behind that which is going to work with your integration solution from there you have upgrading if you were going to upgrade with your existing vendor you'll probably be upgrading controllers and software and and sometimes it'll be all the controllers other times it'll be just the Supervisory level controllers but essentially you're gonna get you know hopefully some kind of upgrade and functionality and your ability to control the building with this and then finally it's replacing everything which is going to be your most expensive option but if you're in a scenario where you're you have outdated technology let's say you have pneumatics or you're building automation system is causing your building occupants discomfort this may be your best option so the bulk of our presentation today is going to focus on ongoing expenses and we look at things like operational costs and operational costs we think you know okay you know what does it cost me to run my building automation system so we'll talk a little bit about that but we're also gonna discuss what goes into what do you what are you getting taken away from when you have to go and run the hot and cold call or you have to go and try to figure out you know what's going on with my system right now and what do I need to do to fix it it's not necessarily just the cost of what you're doing it's also the cost of what you're not doing and then we'll talk a little bit about planning for hardware hardware failure we'll talk about planned obsolescence which is a major issue in the building automation industry we'll talk about energy costs and savings and then as we go through this we'll talk about what you can do in-house and a lot of that is going to depend on your situation you know we're all asked to do more with less these days and in many scenarios you're running large facilities and you may not have enough hands on deck or enough skilled hands on deck to be able to handle a building automation system in-house so operational costs this is a classic 8020 rule about 20% of facility managers use 80% of the available capabilities of their VMs and it's not really that big of surprise because frankly building automation systems can be complex they can they can be difficult to manage a lot of times there's limited ability to make changes within those systems so these numbers are not terribly surprising but facility managers are really the most qualified individuals in many cases to run their building automation system and it's not because they have more knowledge of the system or HVAC or whatever systems they might be running it's because they're in the building on a day to day basis they see they see the little things that change in the building seasonally or by the time of day or for certain tenants having to constantly make changes to a building automation system like I said it's not just the time you spend doing it it's the time that you could could have spent doing something else and I think from an operational perspective a lot of property managers and owners can appreciate that so in case you can't read this cartoon here it says the warranty is for the life of the vehicle but we're not responsible if the vehicle doesn't look very long Hardware fail hardware failure is something that you're you're going to have to deal with in large facilities you might have hundreds of thousands of controllers sensors and end devices and even at a really small failure rate you're still replacing quite a few devices on a regular basis and this is something you really need to budget for and it's also something to pay attention to when you're looking at the warranty you really need to read the fine print here to figure out what does the warranty actually cover how long does it cover it and what if I do anything to make any changes to my system is going to void that warranty and you may also want to find out will the warranty transfer if the building sells product obsolescence is a problem that has plagued the building automation industry for the last probably thirty years and product obsolescence is something I think we're all familiar with in our day-to-day lives it's the reason why not a lot of people have a cell phone that is more than three or four years old frankly I don't think I know anyone who has a cell phone that's four years old it's it's just not the way that cell phone companies operate these days so an example might be if you have an older cell phone and you know that they've come out with newer models the software upgrades that you're downloading they're not necessarily built for your phone they're built for the newer models of phone and and this is something we see across the board in electronics where companies just really stop supporting those products but in building automation a lot of times companies will stop manufacturing a product and the new product will not be backward compatible with your previous building automation system so you have to know what the obsolescence track looks like for the system you're purchasing we had a client who said that he had a system that was installed two years before he got there and when he arrived the building automation vendor was telling him look this system is now obsolete you need to upgrade to our latest technology and it was a two-year old system it was working fine as building automation systems do they you know they they do their jobs they they open valves they you know they modulate dampers they turn things on and off so he was wondering what am I going to get out of a new building automation system and the answer they gave them was not much basically you're gonna have support because you're gonna have the newer technology and that's what we're going to be supporting going forward so rather than do that he did find computrols but for for a little while there he was sending his controllers off to a third parties for repair and eventually the chips on the controllers weren't even available anymore so there wasn't even an opportunity to repair those controllers or maintain that system so when you talk to a potential building automation service provider make sure you ask the question will I be able to use this system in five years and then if they're telling you they want you to upgrade make sure you understand the benefits of upgrading because often times they're there they throw on some bells and whistles but it's not really something you might necessarily need so definitely something to keep an eye out for is where how long is this product been on the market and when do you plan to obsolete the product something else to consider when looking at a new building automation system is what are your plans as a facility to scale this system up are you going to expand the building automation system at some point you're gonna add new sensors are you going to add maybe a new wing to your hospital or new building to your campus you have to keep this in mind because adding new components brings on a couple of different things first of all there's the labor of actually doing that in some building automation systems you might be able to go and a new temperature humidity sensor yourself you have to look at what the cost and the savings are there to see if it's worth your while and do that but it might be worth a look and then you also should consider a lot of the way that a lot of software is priced these days is by the number of points in your system so if you're planning on expanding your your building automation system another 10,000 points what tier is that going to bring you to and how much is that going to cost so my belief is that a maintenance agreement should be true coral be correlated to the usability and the support you have with your building automation system so if you're building automation system is really easy to use and your in-house status can handle a lot of the day-to-day management you don't really need a hefty building automation service contract because you're gonna be able to handle those smaller things in-house you also have to consider what what's included do you have some kind of phone support or maybe you can do some troubleshooting because a lot of maintenance contracts simply give you first access to service where you're not put at the end of the line you get to kind of skip the line to come and have somebody service your system but there may be some additional costs to that as well and then when you think about the size of your service contract small service contracts you know I think are probably a good thing to have in place just so if there are things that come up with the system that you want to have a professional technician take a look at it's it's not a bad thing to have somebody coming in there a regular basis just to check it out but then you look at some of the larger maintenance contracts that are out there and they can end up costing you more than the initial systems just after a couple of years so you want to try to find a system and a maintenance contract that suits your abilities to manage your building automation system and then we look at the life of equipment and how building automation systems can affect this and in effect really how much maintenance you need on this equipment so I think we've all run into a situation or heard of a situation where your recommissioning or retro-commissioning a building and you find out that the building automation system is giving you bad data so it says that your air handler or your light fixtures are off and they're going off at 6 p.m. every day or the schedule that you put in there but then you go into Commission the building and you see that it's continuing to run overnight and not only are you are you losing a lot in terms of energy savings but you're also losing a lot on the life of your equipment you have to consider what is it costing me to maintain this equipment when I don't get good information and then how how frequently am I gonna have to replace the equipment if it's continuing to run 24/7 so I always put this disclaimer out there building automation systems do not save energy by themselves building automation systems typically do very similar things like I said they open valves they modulate dampers they turn things off and on and if you have a building automation system no matter how old if it's dialed in and doing what it's supposed to be doing you're not gonna save a lot on to energy by upgrading to a new system you might get some more functionality out of that which may subsequently give you energy saving opportunities but if your systems already dialed in it's unlikely you're going to save a lot of energy in those situations so again I harp on having having a facility manager that's going to be able to manage your building automation system is a huge advantage because they're in the building on a day-to-day basis and a lot of times that technicians that come in even if you do have the same technician that comes in on a regular basis they don't see the building on a regular basis like you do they don't see it they don't see it on a daily basis and they don't know that ins and outs necessarily and then you have to think about when you're implementing energy saving strategies and you're looking at a payback period if I have to invest more to have a technician come out and implement these strategies and do the analysis how much am I really saving and and how much longer is that payback period going to be and we have liability costs such as cybersecurity most building automation systems today are connected to the Internet in in some way and yet and we know just how dangerous it can be having your information available in the cloud or on line it becomes accessible to people who maybe you don't want to have access to it so my advice here would be get your IT department involved early when you're evaluating a building automation contractor because a lot of times they can give the specifications and criteria that they need met and that will make your you know make your decision after the sale a lot easier on how to implement all of this because it'll all have been talked about ahead of time then we look at you know part of the building automation system is the fire and life safety and access control systems and then a case of an emergency you really can't cut corners here you know if you have if you have some kind of an event and those systems fail you'll be you'll be really kicking yourself for having gone with a less expensive system to try to cut some corners in a less dramatic example you also have commercial real estate tenants who are guaranteed a certain temperature range throughout the day and if you're not meeting those parameters over a period of time you may or your property manager where your property owner may be obligated to compensate your tenants for not meeting those criteria so something to keep in mind as a few of those liability costs that maybe aren't considered when you're making that initial purchase and then there are non monetary costs particularly for corporate run facilities you have to think about the level of productivity you're going to get out of employees based on the environment that you're providing and this particularly comes into play with lighting and HVAC because under the right circumstances people are more productive they're happier employees they're probably going to stay longer and you know potentially do more work for you and we talked about justifying the cost and we I think we've touched on a lot of these as we've gone through here but but being able to accomplish energy savings in-house is a huge huge advantage and then you look at the operational costs as we mentioned you know the time it takes for running a hot and cold call the time it takes where you're sitting there with your building automation technician trying to figure out what's going on and how to fix it these are all things that that take up your time from doing other things that might be more productive something we didn't talk about was incentives there are a lot of energy based incentives out there these days both on a federal and state level and even on a private level now I've seen a lot of utility companies starting to offer incentive incentives for energy related upgrades so building automation systems absolutely fall into this category a lot of times you can you know if you are out there and you're looking at different systems and you decide like this is what I want but it's a little out of budget you might be able to go out there and find some incentives that are able to help you justify that cost now with these incentives you have to keep in mind that a lot of them require benchmarking a year out from the actual project so you can then prove that energy savings so just keep that in mind as you're looking at incentives is make sure that you can go back and pull that energy savings data and finally there's the residual value and residual value for building automation systems is probably not as high as it should be in most cases when a building goes to be sold the the owners or the buyers in this case would be looking at how old is the building automation system so they have an idea of you know what kind of warranty time they have left what they can expect in terms of usability and how many more years they can expect to have the system and then also the energy use per square foot that's probably the biggest one that building owners look at that has to do with the building automation system so we always try to future-proof our buildings as much as we can when we make investments we want to make sure that this investment is going to work out long-term and with building automation industry in general we're hearing a lot about the Internet of Things and the Internet of Things is something that's been talked about for quite a while but I feel like it's finally getting here and it's an exciting time but what you have to make sure of is that you're building automation system is Internet of Things ready so to speak where when new technology does come out you'll have the ability to add on to your building automation system not have to start from scratch just to implement new technology and then power over ethernet is another technology that has really taken off lately power over ethernet is one of my favorites just because it's utilizing existing wiring in the building typically Ethernet or cat5e or cat6 cable is used for communication we're now able to inject power into that cable and power some low energy lightbulbs some access control might be very hard of EA V's that are being powered by Power over Ethernet as well now so we're gonna start to see more and more of those products I think but it's a technology that is is really becoming very prominent and then we hear a lot now about machine learning and artificial intelligence and we've been hearing about big data for a really long time now as well but machine learning and artificial intelligence are technologies that have been around for decades but we're now only to the point where we can start utilizing this data and in normalizing it for use in our buildings and be able to see you know that you have some you know you have some something some piece of equipment that is is a little out of whack and these machines can recognize these really large you know patterns in the data but in terms of being you know future proof for machine learning and artificial intelligence there's not much to be worried about there machine learning and artificial intelligence are typically done at the cloud level and that's because you need really substantial computer clusters to be able to process a lot of that data so getting your organization on board it's a it's going to be a battle a lot of people are at bursts to change as as a whole everyone everyone today is looking at you know that first cost procurement approach and I think a lot of progressive organizations are starting to say you know what can we do to can Center the lifecycle cost of these these big investments that we're making and it's really an organizational mission and vision that really comes into play like I said all too often you have your purchasing department and your O&M team making their own decisions they have their own budgets and they're not really working side by side the way that they should so a lot of times if you're trying to get your purchasing team to invest a lot on the front end you know explaining to them the costs on the back end might be helpful but really the change is going to come when you when you have a common goal so before we take questions I wanted to let everybody know that we're going to have a webinar on Wednesday January 16th at 1:00 p.m. it's gonna be hosted by our manager of strategic partnerships Mike flatten well heat Mike's gonna cover the architecture and software of concrete tools building automation system so if you're interested in seeing the software and hardware for yourself I think that would be a good one to attend then I also encourage everyone to go to our website and download our lifecycle cost eBook it covers a lot of what we talked about here today and and then some but if you have any questions for us please don't hesitate to email me directly my email address is Scott Holstein at computrols comm and we appreciate you all joining us for the webinar today and look forward to having you in future webinars