What are Smart Buildings?

Smart buildings, smart cities, smart everything. At every turn, it seems that more and more “things” are smarter at an ever-quickening pace – including buildings. Historically serving a sole purpose – keeping the elements where they belong; outside – today’s buildings are far more purposeful.

So, what is a smart building? Are we talking about the Jetson-esque buildings of Orbit City, with hundreds of Rosie-the-Maids running around your office? Not exactly, but close.

Today’s advancements in technology are allowing for greater interconnectedness between building systems. It’s through this connectedness of facility systems (think, HVAC, lighting, security, access control, etc.) that’s the basis of a smart building.

The Building Efficiency Initiative offers a great definition of what a smart building is and can do:

At the most fundamental level, smart buildings deliver useful building services that make occupants productive (e.g. illumination, thermal comfort, air quality, physical security, sanitation, and much more) at the lowest cost and environmental impact over the building lifecycle…Smart buildings use information technology during operation to connect a variety of subsystems, which typically operate independently so that these systems can share information to optimize total building performance.”

Let’s take a deeper look at that makes this all happen.

Sensors Everywhere: The emergence of the IoT workhorse

What’s driving this integration of building systems? Say hello to my little friend, the mighty little sensor. Seriously. Even though sensor technology has been around for decades, the reduction in price is fueling wider adoption. Just take a look at the below figure from GE. Since 2004 sensor prices have declined by some 62%. Moreover, sensor prices are predicted to drop by another 24% by 2020. So over the course of sixteen years, sensor prices will have dropped a whopping 86%! That’s some serious bang for the buck.

Smart Buildings and Sensor Technology

It’s this drastic price reduction in sensor technology that is powering (no pun in intended) the Internet of Things (IoT) and in turn the advent smart buildings. And we’re not just talking new construction here. The lower prices of sensors foster their placement virtually anywhere; including within existing building fixtures, HVAC vents, doors, windows, the list goes on.

Well that’s cool, right? We can put sensors everywhere. Where’s the value, you ask?

Let’s find out.

What’s the value of a Smart Building?

Great, we can now afford to have little sensors in every nook and cranny of our facility. Should we care? I mean, simply having some sensors lodged into our building’s crevasses doesn’t necessarily scream investment opportunity. Or does it?

Let’s take a closer look at how sensor integration can bring value to our facility (and moreover our bottom-line).

Smart Building Operations: Reducing Costs

Building operations is not a cheap business. Per the U.S. Department of Energy, the annual energy costs for U.S. commercial/industrial buildings is an astounding $400 billion. Spread across the 5.9 million commercial/industrial buildings in the U.S., we’re talking about energy bills upwards of $70,000.00 per building. Those dollars and cents add up pretty quickly, don’t they?

So how can a smart building’s sensor infrastructure help in reducing these costs? When you consider that HVAC and lighting make up 59% of commercial building energy use, proper energy management is key. In fact, this is where an advanced monitoring system can help shed real dollars from your energy bill. And this isn’t simply fluffed hyperbole, here. Per a study conducted by Texas Instruments, advanced HVAC and lighting controls (i.e. sensors) can cut energy use by 40%. (Oh, by the way, that’s just savings from sensor control. Upgrading lighting technologies from dated fluorescent fixtures to LED will reduce those costs even further).

Reduce Energy Costs - Smart Building

Improving Productivity

The implementation of sensor technology not only drives cost reduction, it can improve productivity. Embedding sensors within your building infrastructure provide greater granular control. This granular control gives facility managers the capability to optimize their building systems. As such, system optimization is the cornerstone to uncovering non-energy benefits. Including increased employee productivity. In fact, the same Texas Instruments study found that optimizing control systems can contribute to a 3% increase in employee productivity. This productivity increase is attributed to better thermal comfort and more appropriate lighting conditions.

What’s referred to as task tuning – the ability to granularly control a lighting fixture and optimize its output for a particular task at hand – has a profound effect on worker productivity. This actually reminds me of an example from a colleague of mine. The story goes a little something like this:

Working with an aluminum manufacturer in the Southeast U.S. my colleague had just wrapped up a new LED lighting upgrade on their client’s manufacturing floor. During a follow-up call to see how the new lighting system was working, my colleague was happy to hear the new LED fixtures and control system were delivering the promised energy savings as originally spec’d.

My colleague then asked if there were any other benefits of the lighting system that the client found. At that point, the client was all too happy to share some exciting news. By optimizing the lights over the sheet cutting workstation the employees saw a 2% reduction in aluminum waste. What’s the big deal? Well for this client a 2% decrease in scrap aluminum was so signficant it actually dropped their project payback from 1.75 years to an amazing 3 months! Now if that’s not a direct non-energy benefit of a smarter building system, I don’t know what is.”

Deeper Insight: The more you know, the better you can manage

The old adage you can’t manage what you can’t measure directly applies to building operations. Luckily you can now collect and analyze more through a Building Management System (BMS). The mere fact you can now use sensors to measure what was once unmeasurable is a game changer. Gathering data on a lighting, HVAC, security, or an access control system unlocks significant business value. Consequently, smart buildings have the ability to tell a larger story – from space planning to occupancy based optimization.

The fact that 30% of energy in a building is used inefficiently or unnecessarily also gives reason to pause. Diving into these areas to determine where and how this energy is wasted is part of the larger story a smart building can tell. With deeper data analytics you can now pinpoint wasted kilowatts down to the machine.


The power of data collection and analysis is the real value of a smart building. There will be a point when the energy sponge has been squeezed dry and productivity is maxed out. As a result, it will be up to the smart building’s analytical brain to push the envelope even further to unlock additional business value.

Smart Buildings of the Future

Pinpointing how your facility not only uses energy but lives organically provides untold value to your business. Least not of which is how to improve operations, productivity, and efficiency. As the Internet of Things advances the power of a smart building will only increase. What we think of as groundbreaking today will simply be a footnote in five years time. Tomorrow’s smart buildings will be a Jetson-esque reality. Your desk will know who you are and how you like your lighting and temperature – no matter where you sit or what office you’re in. And little robots will swing by to serve you lunch…far-fetched you say? Well, robots are already running fast-food joints.

At the end of the day, it will be quite fascinating to see what the smart building of tomorrow will look like. For now, there is certainly enough “dumb” buildings that we need to bring up to speed and make smart.