Frost & Sullivan

Frost & Sullivan: Life cycle costing is critical in the intelligent buildings industry


Source: Frost & Sullivan

CABA and Frost & Sullivan collaborate to build industry consensus around this vital prerequisite for a successful building project

MOUNTAIN VIEW, Calif. -- As the building technologies market strides toward optimizing intelligent building investments by managing end-user experiences, energy efficiencies, and monitoring and maintenance of assets, life cycle costing (LCC) proves of paramount importance. Through collaborative research between the Continental Automated Buildings Association (CABA) and Frost & Sullivan, findings show that cost evaluations are not the industry norm; instead, purchases are most often based on the lowest costs and relationships with past vendors. Despite this, industry participants agree the use and adoption of LCC as a valid prerequisite for building technology purchases is a key benchmark in the years to come.

“We recognize the challenges our customers have in balancing the demands of meeting first-cost requirements for the original system investment, versus the longer-term impact of the system usage throughout the life of the building,” said Siemens Industry, Inc. Marketing Director Peter M. Seyfert. “We are excited to be hands-on in this landmark CABA and Frost & Sullivan life cycle research.”

To ease the challenges around long-term building technology purchase decisions for maximum ROI, Frost & Sullivan and CABA are midway through a project aimed at defining the role of LCC in intelligent buildings, with support from CABA’s Intelligent Integrated Buildings Council (IIBC). The analysis is evaluating the current tools and techniques available to accurately measure LCC, as well as LCC’s current and future impact on the market as a key purchasing factor to consider before any major building technology-related purchase.

For more information before the release of the final analysis in October 2013, please contact Britni Myers at This Frost & Sullivan and CABA collaborative research project will cover the adequacy of training and education initiatives; collaborative efforts required to make LCC and related methods a mainstream component; as well as issues, challenges and the relevance of current tools to accurately evaluate LCC.

“We look forward to the outcomes of this research, and feel this represents an important and timely analysis that reflects the importance of life cycle costing within our industry,” according to a statement from Honeywell. “We feel the discovery of best practices and appropriate ROI models raises the necessary awareness and provides benefits to all stakeholders.”

Valid concerns come up when discussing the benefits associated with LCC, such as its only slight and irregular application in the design process when developing intelligent building plans and technologies, which causes obvious incongruence later in the process. In addition to this lack of collaboration among building technology market segments, CABA and Frost & Sullivan also find budgetary restrictions often hinder the adoption of the best suited technology or project, particularly when LCC is not taken into consideration. Demonstrations of LCC benefits clearly reflect the justification of key intelligent building investments, allowing industry stakeholders to take a future-proof approach to buildings that are still standing beyond the lifespan of the purchasers.

“PCN is pleased to be a part of the CABA Life Cycle Costing sub-committee and believes that adoption of life cycle costing will allow acceleration of the intelligent buildings market overall,” said EVP of Business Development for PCN Technology Inc. Daniel Drolet. “Ultimately, through the CABA research led by Frost & Sullivan, building owners, technology providers and system integrators will obtain critical LCC tools necessary to make decisions as they move forward with intelligent building infrastructure and technology migration plans, and we look forward to our participation in this research.”

The following CABA members are sponsors of this research:

  • Cadillac Fairview Corporation Limited
  • Consolidated Edison Co. of New York, Inc.
  • CSA Group
  • Distech Controls
  • Hydro-Québec
  • Hydro One Networks
  • Honeywell
  • International Facility Management Association (IFMA)
  • Johnson Controls, Inc.
  • Microsoft Corporation
  • National Institute of Building Sciences (NIBS)/buildingSMART Alliance
  • PCN Technology, Inc.
  • Philips
  • Public Works and Government Services Canada
  • Siemens Industry, Inc.
  • The Siemon Company
  • Trane, a brand of Ingersoll Rand
  • WattStopper/Legrand

About the Continental Automated Buildings Association (CABA)

CABA is an industry association dedicated to the advancement of intelligent homes and intelligent buildings technologies. CABA is an international association, with over 300 major private and public technology organizations committed to research and development within the intelligent buildings and connected home sector. Association members are involved in the design, manufacture, installation and retailing of products for home and building automation. CABA is a leader in initiating and developing cross-industry collaborative research, under the CABA Research Program.

About Frost & Sullivan

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.

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