Driving Operational Cost Savings With the Internet of Things
Facilities maintenance has long been overlooked by proponents of the internet of things. That’s changing — and the potential savings for companies that adopt data-based operations management is enormous.
Internet of Things
For many retailers, facilities management has become a significant part of their customers’ overall brand experience. Based on my experience and recent interviews with a number of store managers and facilities executives at major global retailers, more and more CEOs, chief operating officers, and chief marketing officers are doing spot “walk-throughs” of individual locations, paying close attention to the critical, yet unglamorous, elements of retail. Operations executives are facing scrutiny if anything in renovations, maintenance, or repairs disrupts or denigrates the overall customer experience.
Yet, COOs who typically oversee back-office functions and facilities management often receive much less investment from the boardroom to acquire new digital technologies compared to their CMO and chief technology officer counterparts. This imbalance in where new tech gets allocated continues to exist and is a blind spot for many companies. Leaders who are able to both recognize and rectify this imbalance can reap significant benefits for both customers and the business.
The Complexity of Facilities Management
Of the approximately 5 million commercial buildings in the United States, almost half are part of multilocation enterprises. Data collected from more than 200,000 facilities for over a decade suggests these types of organizations spend an aggregate $100 billion each year on repair and maintenance work predominately completed by an ad-hoc collection of independent contractors at individual locations.
Managing the entire range of multilocation facilities and equipment is a complex task: Buildings and assets are typically decentralized or franchised. To manage this network effectively, retail operations executives and facilities managers need a data-first approach to measure and optimize the overall condition of their stores in the same way marketers strategize product placement within them.
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Data Provides a Performance Baseline
Data analysis from more than 200 of our customers on the maintenance spend of their 200,000 facilities over the past 15 years suggests that IoT and AI have the potential to reduce unnecessary facilities maintenance spend by as much as 20% to 25%. Effective data collection and analysis, however, has the potential to assist in the reinvention of what has traditionally been a cumbersome, paper-based process, rife with middlemen and inefficiencies.
We are seeing store operations for major retail brands being graded with key performance indicators (KPIs) that have a greater emphasis on facilities management.