Beyond Brick and Mortar: Advanced Technology Platforms and Processes Power Smart BuildingsTo optimize energy consumption and reduce operating costs, it is essential to better monitor and benchmark buildings’ energy usage. Active demand management platforms are helping service providers respond to the dynamic energy requirements of modern buildings.

Executive SummaryRising energy costs have led to a greater focus on optimizing energy consumption and demand patterns, among both consumers and producers. This means organizations must closely monitor energy consumption and demand, as well as con-tinuously improve performance.

To achieve this, several industry constituents — including energy suppliers, utility companies, energy aggregators, HVACR manufacturers, building administrators and facility managers — are adopting innovative ways to identify and address the causes of energy inefficiency and the resulting higher costs.

This white paper explores the convergence of active energy demand management, an informed infrastructure powered by analytics and mobility, and new approaches to performance benchmark-ing. This combination of activities has fundamen-tally altered the building management and energy

efficiency landscape and is helping organizations establish capabilities that, over the long term, will result in more efficient and sustainable buildings.

Active Demand ManagementWe are witnessing a sustained increase in overall energy consumption. Energy consumption by residential and commercial buildings in the U.S. is said to be almost 40% of the country’s total energy consumption.1 Rising energy costs have led to a greater focus on energy consumption optimi-zation and better forecasting of demand patterns, both by energy consumers and producers.

Utility companies and energy aggregators want to optimize demand so they can support rising consumption without substantially increasing their capital outlays. Energy aggregators provide curtailment services to help manage demand and reduce energy production costs in exchange for rate offers to “bundled” groups of customers. In coordination with manufacturers of building

cognizant 20-20 insights | may 2015

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equipment and automation controls systems, utilities and aggregators are also looking to expand their focus from traditional building equipment maintenance services, to services that focus on the complete energy and energy-related infrastructure needs of modern buildings.

System performance and reliability used to be the key differentiators for manufacturers of HVACR equipment, but this is no longer the case. These companies stand to lose business if they do not address customer desires to reduce costs and improve efficiency via innovative services such as remote asset management and demand management. This shift is due to greater awareness among customers about corporate sustainability and its benefits. As a result, many organizations are demanding a reduction in power-related operating costs and pushing the industry to innovate in ways that help them achieve their consumption, cost, efficiency and sustainability goals.

HVACR equipment and control systems manufac-turers are responding by enhancing their ability to access the data generated by their products installed at customer sites. They are capitaliz-ing on the long-term service contracts in place for the control systems and equipment they sell and using interval data from these assets to

obtain a holistic view of building performance and the assets in it. They are leveraging such data to venture into areas such as active demand management to be responsive to real-time variations in utility demand and pricing, while focusing on parameters such as energy usage, costs, efficiency, comfort, occupancy and overall demand.

The ultimate achievement for any of these players would be to connect building automation systems and equipment performance to the demand, consumption and pricing data from utilities, and develop the ability to fully manage the building and respond automatically, in real-time. This will enable them to actively and automatically match building behavior to variations in market demand and price.

Framework for an Active Demand Management PlatformA demand management platform can be used to continuously import information and signals from customers’ infrastructure outside the enter-prise, process that data into actionable informa-tion, communicate recommended actions to the building, “read” the building as part of the con-tinuous process, and feed select information back beyond the enterprise (as depicted in Figure 1).

Tenets and Enablers of Active Demand Management

Figure 1

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This platform (as illustrated in Figure 2) provides the ability to establish predefined strategies for a variety of physical assets, such as entire buildings and specific spaces in buildings, as well as underlying equipment and energy meters in buildings. Importantly, it allows building managers to vary consumption across building components for various parameters, such as comfort, occupancy, equipment type, time of day, pricing and so on. Such a platform enables the automatic synchronization of energy consumption with these parameters by adopting predefined ways of load-shedding based on customer contracts. This provides the ability to automatically recognize when demand should be reduced or shifted in a predefined fashion.

A demand management platform provides the ability to receive and interpret a signal from utilities or aggregators. The aggregators and utilities, meanwhile, are able to maintain the required level of load on the grid and maintain costs of energy production at desired levels to simultaneously comply with regulations that govern energy consumption and demand.

Informed Manufacturing: Role of Informed Infrastructure in Smart BuildingsBuilding automation systems and equipment manufacturers are leveraging information tech-nology to build an “informed infrastructure” that supports their demand management goals. Informed infrastructure is the merging of building hardware and software, enabling users to monitor, measure, analyze, communicate and operate building controls in ways that could not have been imagined a few years ago.

Such an infrastructure serves as a platform to connect the various components of the building management ecosystem, as well as provide a repository for the continuous stream of small interval data that flows from each component of the ecosystem.

As component costs plummet, by 2020 most devices will have built-in connectivity, enabling remote monitoring, sensing and control. The Internet of Things (IoT) can improve efficiency and enable proactive usage and predictive main-

Active Demand Management Framework

Figure 2

Building Systems

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Quick Take

We are at an inflection point of innovation and change in the manufacturing and infrastructure landscape. The change is taking place through the convergence of the real and virtual worlds (cyber-physical systems), as well as the advancement of sensors, processors and Internet technologies. This convergence enables a faster flow and more efficient use of information on a much larger scale than was possible previously.

The deeper meshing of virtual and physi-cal machines and instruments offers the potential to truly transform the value chain, from suppliers through customers and at every touchpoint in between. We call this phenomenon “informed manu-facturing.”

To learn more, read our white papers “Informed Manufacturing: Reaching for New Horizons“ and “Informed Manufac-turing: The Next Industrial Revolution.”

tainability while enabling centralized control of all devices. (For more on this topic, see our white paper “Designing for Manufacturing’s Internet of Things.”)

For example, lighting devices connected by the IoT can determine the best time to operate based on time of use or peak power usage patterns. Such instrumented devices could shut down or operate in low energy consumption mode during certain times of the day or during peak hours. Similarly, heating and cooling equipment can warm or cool buildings during certain times of day, based on pre-defined occupancy hours or dynamic occupancy patterns.

Recent advancements in analytics and mobility are critical to the informed manufacturing movement and have great implications for reducing labor

costs, increasing productivity, cutting downtime and enabling visibility into operations. When integrated into a demand management platform, analytics can help unlock the potential of the vast amounts of data and convert it into invaluable energy conservation strategies. Modern demand management solutions can be configured to monitor performance based on rules and provide analysis of key operational parameters.

For example, we developed a Web services framework for a leading North American utility company that serves over 4.4 million customers, to display near real-time usage information to end consumers. By identifying and unifying core business processes and adopting interactive graphs to display billing information, we were able to create common business rules with channel-specific interfaces to help enhance the customer experience and provide seamless messaging and interaction across all channels.

An analytics solution can help inform whether demand management goals have been met and take timely corrective action, if required. For example, say one of the demand management rules is to automatically reduce load during peak demand periods. Analytics running at a pre-defined frequency could detect that the peak demand is approaching or has crossed the estab-

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The Download on Informed Manufacturing

Recent advancements in analytics and mobility have great implications for reducing labor costs, increasing productivity, cutting downtime and enabling visibility into operations.

Workflow Management

Alerts and Notifications Flexibility Security

Ease of Use

Workflow management to perform daily tasks, such as creating and updating service requests, routing, parts requests, roster management, etc.

Dashboard view of activities performed for an intuitive view for managers.

Automated alerts when equipment malfunctions.

Notifications on planned tasks to help personnel improve their productivity and perform better service.

Access to real-time and historical telematics data.

Ability to inspect, approve, report and make decisions.

Technology-agnostic solutions and ability to perform across devices and platforms.

Flexibility to incorporate fast technology changes.

Ability to detect security breaches in building control systems.

Role-based, secure access to data and equipment control is.

Improved productivity, ease of use.

Intuitive usage, with minimal training required.

Access Information in Real Time

Quick Take

Buildings usually have control systems running around the clock to maintain comfortable conditions and thus energy consumption within an acceptable range. We partnered with one of our clients — a leading building control systems and equipment manufacturer — to build an active demand management platform that enables this company to establish end-to-end relationships between the require-ments of utility companies and energy aggregators on the one hand, to the energy demands and usage patterns of its end customers on the other.

This client has the advantage of having service agreements in place with its end customers for the control systems and equipment sold to them. These service agreements define the quantum and duration of energy curtailment and automatically shut down equipment and shed load with specified lead times for prior notification of such activity.

As part of the demand management platform, we also created virtual meter objects and mapped them to actual energy meters. These virtual meters collected a continuous stream of consumption data from the physical meters. If the data indicates that a particular threshold is reached, an action is triggered to counter that trend, such as selective or complete load-shedding based on the predetermined strategies in place.

This company receives a signal from an aggregator for a location requiring load-shedding, based on an analysis by the power utility regarding the load on its grid. The demand management platform then evaluates the terms of the customer contract in the geographical area in question, notifies them and sends the necessary automated signals

to shed load at specified times and durations. Normal operations are set to resume at the end of the curtail-ment period. The end customer can request an override of such load-shedding activity in the event of emergencies or alternative business needs. The curtailment produces cost savings for customers and enables our client to provide proof of value of service contracts.

Client Benefit: Enhanced Value to CustomersIn either of the aforementioned scenarios, our client can provide tremendous value to its customers. Key benefits include the ability to:

• Manage the energy demand in buildings according to pre-defined strategies and to do so automatically, without the need for manual intervention or supervision from the customer.

• Help customers use information from active demand management partners outside their enterprise to reduce energy costs while continuing to support their core mission.

• Automatically use signals for third-party information, such as weather forecasts.

• Reduce energy consumption and generate cost savings for customers.

• Elevate the conversation in the customer organization beyond rudimentary expectations around building auto-mation systems and equipment performance, to value propositions such as building energy efficiency, cost savings, green operations and long-term sustainability.

Figure 3

Key Mobile Solutions Parameters in Building Management

Active Demand Management for a Control Systems Maker

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lished threshold. This spike in demand is mitigated by switching off all non-essential equipment auto-matically, thus reducing the load to acceptable levels (see sidebar, page 5).

Mobility is a key facet of an informed infrastruc-ture. Mobile applications, integrated with demand management platforms, can be a cost-effective way to monitor building control systems. For field users, such as a facilities engineer, mobile appli-cations provide a dashboard view of the energy demand of various locations, alert them immedi-ately to anomalies and enable faster resolution. The key parameters to consider for enabling mobile solutions for demand management are listed in Figure 3.

BenchmarkingIn addition to demand management, many companies are focusing on the building itself and the mechanical assets therein. They are leveraging industry-recognized programs to provide benchmarking services and highlighting the need for changes to the physical aspects of buildings, as well as usage practices to improve their energy performance.

The U.S. EPA’s Energy Star Portfolio Manager Program is one such comprehensive benchmark-ing system widely used in North America by the building energy efficiency industry across vertical markets. Energy Star was created in 1992 to identify and recognize energy-efficient products and – later — whole buildings and building energy upgrades. In 2011, with the help of the Energy Star program, Americans reduced their utility bills by an estimated $23 billion and prevented 210 million metric tons of GHG emissions, the equivalent of keeping 41 million vehicles off the roads.2 The program is used by over 250,000 buildings with 27 billion square feet of commercial and institu-tional building space, representing over 40% of the commercial building market.3

The Energy Star Portfolio Manager Program supports over 80 different types of buildings, whose performance can be benchmarked and their attributes and performance metrics compared with those of similar buildings across the U.S. and Canada. Benchmarking helps to compare performance not only with peers but also with one’s historical performance, as well as identify the need or opportunity to make improve-ments in the physical attributes and operations of buildings, and track the resulting benefits.

Benchmarking is conducted with comparable buildings, using the attributes of these building types, their actual use (such as office space or warehouse) and the energy consumption in the buildings. Examples of attributes used to benchmark buildings include gross floor area, percent heated, percent cooled, number of personal computers, average occupancy, etc. These attributes are used to analyze the perfor-mance of buildings over a period of time, based on metrics such as energy and water consump-tion, costs and greenhouse gas emissions.

The Energy Star Score

The Energy Star score provides a dimension of benchmarking with peer buildings, in addition to a comparison of cost, consumption and emission metrics. An Energy Star score is a consolidated numerical indicator on a scale of 0 to 100 that is derived by factoring various parameters that affect building energy efficiency, including con-sumption, building type, building use, percent of heating and cooling, and so on. A score of 75 to 100 indicates a top energy performer. It is recognition for a high-performance building and an indication to continue maintaining best practices to sustain

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1%

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Source: “Benchmarking and Disclosure: Lessons from Leading Cit-ies,” Boston Green Ribbon Commission, June 2012, based on data from the Institute for Market Transformation. Figure 4

Impact of Energy Star Certification on Real Estate Commercials

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the performance. A lower score indicates opportu-nities to review the physical attributes and usage patterns of the building and make improvements that will enable energy conservation, reduced costs and lower greenhouse gas emissions. Industry research shows that Energy Star certified buildings offer the following key benefits:

• Lower operating costs.

• Increased marketability.

• Higher rental rates.

• Increased asset value.

• Fewer greenhouse gas emissions.

Figure 4 shows how Energy Star certified buildings score better than uncertified buildings, based on

data from several major commercial real estate companies.

Looking AheadIn the foreseeable future, the convergence of sustainability strategies, such as active energy demand management and performance bench-marking — along with the rise in informed infra-structure powered by new technologies — will result in powerful, informed buildings. Such buildings will be able to dynamically alter opera-tional behavior, offering enormous benefits to owners/operators and energy producers in terms of operational efficiency. This is likely to move the industry toward greater sustainability-driven practices and enable it to mitigate the impact of variations in energy costs.

Quick Take

One of our clients, a prominent manufacturer of building control systems and HVAC equipment, was using a remote asset management platform to manage the performance of its equipment installed at customer locations, using proprietary analytics that measured the variation of performance indica-tors. The remote asset management platform collects equipment performance data at frequent time inter-vals, and generates intelligence such as early warnings and service advisory alerts. These notifications allow service personnel to triage issues remotely, thus miti-gating the need and expense of a technician visit.

We advised our client to integrate the Energy Star Benchmarking system with the existing remote asset management platform to enable existing customers to more effectively manage their entire building or portfolio of buildings and all the equipment in it on one single platform, without the need to use multiple systems. We also built reporting and mobile capabili-ties as part of this integration, which the company is using to deliver consolidated building performance reports to customers’ mobile devices.

With this integration in place, our client’s customers have access to a one-stop shop that offers remote asset management, equipment performance analytics, benchmarking and customer reporting integrated with mobility in one unified platform. Company deci-

sion-makers now have a holistic picture of asset per-formance, which has enabled the company to engage more deeply with its customers and offer advisory services for improving building performance.

Since the launch of this integrated platform, our client has sold building energy efficiency service contracts to over 120 new customers in a year and increased its footprint in the building energy efficiency market by engaging with customers in a wide variety of businesses, such as nationwide theater chains, retail and grocery stores, hospitals, banks and financial institutions, sports facilities, and commercial real estate companies across North America.

End customers have begun to take an active interest in the evaluation of building behavior over time, benchmarking against peers and adopting sustain-able design metrics for buildings and spaces through these industry programs. The resulting benchmarking data is helping the company redefine peer groups and promote a better understanding of building efficiency performance metrics. This data enables building owners and operators to take a proactive approach to establishing key energy conservation metrics (ECMs) to achieve the larger goal of building energy efficiency by reducing energy costs and reducing greenhouse gas emissions.

Energy Star Portfolio Manager Integration with a Remote Asset Management Platform

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Industry players that wish to capitalize on these developments need to internalize these trends and turn them into action plans. For instance, HVACR manufacturers with the deepest knowledge base can play a leading role in educating and providing consultative services to customers. They can also explore the possibility of building a proprietary demand management technology infrastruc-ture that can function as a platform for selling services. On the other hand, companies that own/operate buildings can proactively engage such manufacturers and apply what they learn from these encounters.

Our move-forward recommendations for building portfolio owners/operators include:

• Explore the integration of internal building automation systems and equipment with third-party demand management platforms.

• Evaluate internal energy demand needs and devise strategies to meet them, while also min-

imizing costs by using demand management platforms and optimizing internal demand behavior.

• Establish an energy demand baseline and negotiate pricing with energy aggregators to derive tangible cost and sustainability benefits for conforming with negotiated behavior patterns.

• Identify and adopt a benchmarking process/platform to establish an energy performance baseline to compare with peer buildings and broader sustainability goals.

• Analyze operating practices, evaluate buildings’ physical attributes and underlying equipment, and implement changes where necessary to improve upon the established energy perfor-mance baseline.

• Focus on gradually developing an internal culture that enables achieving energy perfor-mance levels that meet the highest industry standards.

Footnotes1 “Frequently Asked Questions,” U.S. Energy Information Administration,

http://www.eia.gov/tools/faqs/faq.cfm?id=86&t=1.

2 “The History of Energy Productivity,” Alliance Commission on National Energy Efficiency Policy, January 2013, http://www.ase.org/sites/ase.org/files/resources/Media%20browser/ee_commission_history_report_2-1-13.pdf.

3 Mike Zatz, “A First Look at EPA’s Portfolio Manager Upgrade,” Energy Star, December 2011, https://www.energystar.gov/ia/business/evaluate_performance/Portfolio_Manager_Upgrade_First_Look_Dec2011.pdf.

Resources

• “Designing for Manufacturing’s ‘Internet of Things,’” Cognizant Technology Solutions, June 2014, http://www.cognizant.com/InsightsWhitepapers/Designing-for-Manufacturings-Internet-of-Things.pdf.

• Jim Sinopoli, “Pushing the Envelope: Building Analytics beyond HVAC,” Smart Buildings LLC, 2014, http://www.smart-buildings.com/uploads/1/1/4/3/11439474/2014marfdd.pdf.

• James Piper, “HVAC Maintenance and Energy Savings,” FacilitiesNet, March 2009, http://www.facilitiesnet.com/hvac/article/HVAC-Maintenance-and-Energy-Savings--10680.

About CognizantCognizant (NASDAQ: CTSH) is a leading provider of information technology, consulting, and business process outsourcing services, dedicated to helping the world’s leading companies build stronger busi-nesses. Headquartered in Teaneck, New Jersey (U.S.), Cognizant combines a passion for client satisfac-tion, technology innovation, deep industry and business process expertise, and a global, collaborative workforce that embodies the future of work. With over 100 development and delivery centers worldwide and approximately 217,700 employees as of March 31, 2015, Cognizant is a member of the NASDAQ-100, the S&P 500, the Forbes Global 2000, and the Fortune 500 and is ranked among the top performing and fastest growing companies in the world. Visit us online at www.cognizant.com or follow us on Twitter: Cognizant.

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About the AuthorsNikhil Kulkarni is a Senior Consultant within Cognizant Business Consulting’s Manufacturing and Logistics Practice. He has over nine years of experience in business and technology consulting and has worked on numerous strategic business transformation and technology implementation engage-ments. He has worked with clients on new product/service development initiatives, business process reengineering and mobility-based customer engagement strategies. Nikhil holds an M.B.A. from the University of Connecticut and graduate degrees in industrial engineering and international affairs from the University of Florida and Georgia Tech, respectively. He can be reached at Nikhil.Kulkarni3@cognizant.com | LinkedIn: www.linkedin.com/in/nikhilvkulkarni.

Anand Kalathil is a Senior Consultant within Cognizant Business Consulting’s Manufacturing and Logistics Practice. He has over nine years of experience working on supply chain consulting engage-ments in discrete and process manufacturing companies. Anand has worked extensively on process and product reengineering engagements for leading Fortune 500 clients. He holds an M.B.A. from NITIE, Mumbai, and a bachelor’s in technology from National Institute of Technology, Kurukshetra. He can be reached at Anand.Kalathil@cognizant.com | LinkedIn: https://www.linkedin.com/pub/anand-kal-athil/6/556/822.