EMAIL INTERVIEW – Aaron Lapsley and Ken Sinclair

Aaron Lapsley, VP of Engineering Services, Switch Automation

Aaron Lapsley is an experienced engineer, consultant and manager with an extensive background in building systems, real estate operations, energy and technology. He has an MBA from Harvard Business School, a B.Sc. in mechanical engineering from the University of Oklahoma, and is a licensed Professional Engineer in two U.S. states. As Switch Automation VP of Engineering Services, Aaron is at the forefront of building a world-class professional services organization to help implement and effectively utilize the Switch Platform, manage customer support and user training.

Sinclair:  What’s the latest trend that you’re seeing in the marketplace, as a global solution provider?

Lapsley:  Cities around the world are learning that if they truly want to become a ‘smart city,’ then they cannot depend on the builders or architects to make swift, tangible progress. Instead, they’re starting to realize that they need to create scalable technology-driven initiatives themselves. The City of Adelaide, Australia and Seattle [Washington] 2030 are great examples of this. These are city-driven, legislation-supported, properly incentivized projects with all stakeholders involved from the outset. These cities aren’t waiting to create ‘smart’ new construction. They’re utilizing technology partners to make their current assets perform better. The New York State Energy Research and Development Authority’s (NYSERDA) $30M Real Time Energy Management (RTEM) Program is perhaps one of the most accurately incentivized programs in a world full of smart-city hopefuls.

Sinclair:  Why do you think New York is poised to lead the globe in smart cities adoption?

Lapsley:  NYSERDA’s RTEM program has tangible benefits for both the city and building owners. Smart city programs fail because the incentives are misplaced—building owners aren’t motivated to get involved unless there’s a clear line of cause and effect on their bottom line. New York’s comprehensive program helps building owners actuate more efficient buildings, with massive program subsidies. As a result, New York will become a leader in energy efficiency. They’ve reverse engineered the approach to create a sense of urgency and motivation among the right people, in the right order.

Sinclair:  What does ROI look like for companies who partake in a Real Time Energy Management program?

Lapsley:  In isolation, information has no inherent value. It’s only valuable to the extent it helps enterprises add and capture value in the real economy. And in the context of a 21st century economy—where organizations are aggressively competing for customers (tenants) and resources, and are struggling to manage large, complex groups of employees, supplier networks and customer relationships—information becomes essential and invaluable. Increasingly, businesses succeed and fail on the quality and timeliness of their information. 

In essence, real time building management programs unlock data; data in the right hands becomes information; information will lead to targeted decisions and actions; and those decisions and actions drive the ROI.

Depending on the project goals, tangible ROI comes in many forms— reduced energy usage, operational cost savings, happier / more comfortable tenants or an overall better bottom line, to name a few. It depends on the businesses’ goals and the nature of the portfolios. Energy is highly visible and generally pretty measurable. So it gets a lot of the attention, as it should. But there are other elements of ROI that the industry needs to start advancing. Preventing truck rolls to address hot calls just because someone phoned in a complaint uses less energy too…and time, and opportunity cost for that technician. Energy is only part of the story. The ROI is in data-driven operations. That’s a bit harder to measure, but it’s a much bigger opportunity.

[an error occurred while processing this directive]Sinclair:  How do your clients realize the tangible ROI though?

Lapsley:  To find and activate the ROI, we must have a clear way to utilize the data. This is where fault detection diagnostics (FDD) and alerts are so essential. Your team of busy people don’t have time to sift through data or even millions of alerts to decipher which problem to triage. Instead, you need sophisticated if / then / or / and-based FDD to explicitly indicate how to utilize the data you collected— which are the most expensive, urgent problems and which ones to look at first. Then you need access to real-time data, typically remotely, by people with the right skills to make decisions and execute on business processes. Analytics leads to insights, leads to ROI. “This valve is not closing at night. Looks like it stopped on Tuesday. I’ll have someone fix it tomorrow instead of finding out three months from now when something really breaks or 6 months from now when I’ve already spent $15,000 on additional energy and water consumption.” We see that story all the time.

Sinclair:  What type of companies are doing this well?

Lapsley:  Typically, corporate and commercial real estate portfolios have the most incentive to run effective real-time real estate management programs. Commercial real estate run their buildings as a business, so they want their buildings to be comfortable, efficient and satisfactory for the tenants. Those factors are their bottom line. Corporate real estate, on the other hand, pays for all the costs associated with their assets. For example, large banks that have thousands of buildings in their portfolio have a vested interest in reducing their operations costs. Their portfolios can be large; and measuring and verifying program results is often challenging at that scale. With the right data, they can manage utility spend and vendors more effectively.

We've seen multiple sectors adopt these programs, but the types of companies that succeed are the ones that empower their team to think about innovation and the broader impact that technology can have on a traditional business. That is, they allow their people to think about changing things that don’t make sense or can just plain be better. These are the companies that will ultimately create leading portfolios of connected smart buildings.