BACnet Systems Can Trim Total Cost of Ownership
BACnet systems can help reduce TCO by fostering a cost-effective, integrated approach. Part 1 of a 3-part article.
Report Prepared for BACnet International
The simple phrase "total cost of ownership" (TCO) represents a critical consideration for facility managers evaluating building automation system options, and the BACnet protocol can play an important role here. While first cost remains an important factor when it comes to selecting building systems and the products that make up these systems, facility managers increasingly have come to understand that TCO matters more over the long term and takes into account costs incurred throughout a product's or system's life cycle. This includes the BAS — a crucial part of today's high-performance buildings.
"All too often, facility managers only evaluate the initial cost of a building automation system, and that price tag only captures a fraction of the total costs of ownership across time," says Raymond Rae, vice president of Delta Controls. "A strategic facility manager will consider maintenance, operations, and replacement costs of the building automation system. In other words, he or she will use a total cost-of-ownership approach."
This approach means evaluating the building automation system's long-term impact on the bottom line to determine its true cost-benefit proposition. On systems running under the BACnet protocol — a globally accepted, standard method for integrating components from all suppliers — results from this analysis can be quite favorable.
"BACnet can and does reduce the total cost of ownership by fostering a cost-effective integrated approach to the facility where systems interact with each other to drive improved operations, reduce training costs with central, consistent management and reporting, and reduce or eliminate redundant infrastructure and systems by triggering actionable data consolidation and analysis," notes Chris Hollinger, business line manager for building automation controllers with Siemen's Building Technologies Division.
BAS And TCO
Energy savings is one factor that can reduce the total cost of ownership. "The building automation system may become a building asset, enabling additional revenue streams by reducing overall energy use and allocating energy spend to users," notes Roy Kolasa, global product marketing manager for Honeywell. The BAS can also help the facility manager meet LEED certification standards.
Energy-efficient systems, ones optimized for high performance, can contribute to greater satisfaction and retention for tenants and building occupants, BACnet experts note. This can help facility professionals make their buildings more attractive and desirable in today's fast-paced, competitive commercial marketplace.
As with any assessment process, there are key factors to consider "to determine the total project value of the BAS investment and the resulting return on investment," Rae says. The factors in such an analysis include the following:
- Initial purchase, installation, and integration
- Commissioning costs
- Annual service contracts
- Recurring software or data service charges
- Integration costs for future system extensions
- Integration costs for future replacement of mechanical equipment
- Ongoing maintenance, repair, and operations (MRO) costs
- Energy consumption and costs
"Often the costliest component turns out to be the service agreement," says Nate Kehr, marketing manager at KMC Controls. "When quality equipment is selected and properly commissioned, the amount of service required to maintain the system or repair components can be drastically reduced. Unfortunately, short-sightedness and the desire to lower installation costs and other first costs often result in the building owner being left with a sub-optimal system that requires constant maintenance."
An essential question that emerges from this total-cost-of-ownership approach is this: For how long will the system be economically viable?
Although electronic systems technologically advance rapidly, a facility's building automation system has to last 10, 15, even 20 years. With this in mind, experts say it is critical to select a supplier with an established track record of supporting, maintaining, and repairing building automation systems over that period of time.
"A new BAS with a three-year payback will do you no good if it only lasts three years," Rae says. "Make sure you are selecting systems that are built to last."