The Total Economic Impact™ Of Siemens Building X™

Reduced Energy Costs

Evidence and data. The largest benefit of adopting Building X, accounting for more than 60% of the total quantified value, is the reduction in energy use. All four interviewees highlighted substantial energy cost savings, primarily by implementing the energy efficiency use case with Energy Manager and Operations Manager, but also by better managing high energy use systems such as HVAC and scanners (used in healthcare) with Asset Power Monitoring.

• The system facilities operations director in the healthcare industry said: “We’re identifying $50,000 to $100,000 in annual energy savings, driven by analytics that highlight inefficiencies and optimize system performance. … We identified various simultaneous heating/cooling faults and optimized variable frequency drive motor behavior.”

• The director of facilities in the education industry noted, “The reduced HVAC runtime directly lowers electricity and cooling costs.”

• The radiologist in the healthcare industry said: “We are better able to track energy consumption through the Building X dashboard.”

Modeling and assumptions. In the case of the composite organization, the reduction in energy use has three components:

• The composite spends €120,000 annually on energy use for its office building; it implements energy use and HVAC maintenance use cases in the office building only, which are live from the beginning of Year 1. These features reduced energy use by 10% in Year 1, and the reductions increase gradually to 15% by Year 3 as additional improvements are made.

• Electricity for the scanners (MRIs and CTs) in the two hospital buildings costs €130,000 annually. The composite reduces this cost by 30% in Year 2 with better management from Building X, and further improvements bring these reductions to 40% in Year 3.

• Better energy and HVAC maintenance use cases are implemented in the composite’s two hospital buildings from Year 2, reducing energy costs by 2% in Year 2, growing to 4% in Year 3.

• The reduced energy consumption ramps up to nearly €150,000 (risk-adjusted) in Year 3.

Risks. It is possible that the impact of this benefit could be lower for an organization like the composite because:

• Energy use is already very closely monitored, so the impact of the investment could be lower.

• The cost of energy could be lower.

Results. To account for these risks, Forrester adjusted this benefit downward by 15%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of €197,000.

Facilities Management And Maintenance Efficiencies

Evidence and data. Some interviewees explained that the Building X investment enabled their facilities teams to be more efficient and save time in completing certain tasks. This was largely because it provided facilities managers with remote access to data and report dashboards thanks to Operations Manager and Data Visualizer. Previously, facilities managers received alerts but would have to physically go to the relevant building to access and check the details. Interviewees also described maintenance efficiencies because the system helped identify equipment issues before they failed, which reduced costs for replacements and contingencies.

• The director of facilities in the education industry said, “Now that we can actually see the data in front of us on our phones, we don’t have to physically come to the building to verify those conditions.”

• This interviewee continued: “I can’t count how many trips that [Building X] saved me from having to run across town to go and check on the building after hours. … False fire alarms previously occurred three times per month — each after‑hours response required overtime at $30 to $40 per hour.”

• The system facilities operations director in the healthcare industry noted, “Issues can be addressed before reaching critical thresholds.”

Modeling and assumptions. To financially quantify this benefit for the composite organization, Forrester assumes:

• Before adopting Building X, each building requires half of the time of three facilities FTEs for maintenance and management. This equates to 240 hours per month.

• There is 10% time saving in Years 1 and 2, increasing to 15% in Year 3 as additional efficiencies and optimizations are implemented.

• The average fully burdened hourly rate for a facilities manager is €58 (based on a fully burdened annual salary of €120,000).

• A 50% productivity capture rate was applied: TEI methodology does not assume that all time freed up necessarily goes back to productive use; rather, it can reduce the need for after-hours work.

Risks. It is possible that the impact of this benefit could be lower for an organization like the composite because:

• The amount of time spent on facilities management and maintenance is lower.

• The salaries for facilities management employees are lower.

Results. To account for these risks, Forrester adjusted this benefit downward by 10%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of €51,000.

Data And Reporting Efficiencies

Evidence and data. In addition to the facilities management improvements described in Benefit B, interviewees reported additional data and reporting efficiencies. Building X captures all the data across systems and buildings, making the access, collection, consolidation and reporting of data easier and faster. The Operations Manager and Energy Manager applications provide dashboard information, and with the addition of Critical Space Manager and Data Visualizer, facilities managers have access to detailed buildings data.

• The energy and sustainability expert in the real estate industry explained: “We had more than 300 buildings and did not know their energy consumption and had to manually enter/collect data before on spreadsheets for more than 400 tenants, which was time-consuming and error-prone. We had no centralized visibility into energy use across our portfolio.”

• This interviewee continued: “Lots of time was saved with data reporting, a lot of man-days were saved, saving around a month of work per year of work.”

• The director of facilities in the education industry said, “The centralized visibility across fire and mechanical systems in one platform eliminated the need to access multiple on‑site building access system terminals.”

• The radiologist in the healthcare industry told Forrester that, “Building X helps uncover inefficiencies across systems, allowing teams to optimize operations holistically, not just react to failures.”

• Interviewees also described avoiding costs related to audit fees. In the case of the real estate organization, this equated to costs associated with collecting sustainability data; for the healthcare organization, it was costs for outside auditors required for compliance purposes.

Modeling and assumptions. This benefit was quantified by assuming the following about the composite:

• It requires 16 hours of data and reporting time per building per month.

• The composite has €2,000 of annual audit fees per building.

• The time required for data collection and reporting can be reduced by 50% following the Building X investment.

• The fully burdened hourly rate for a facility manager is €58 (based on a fully burdened annual salary of €120,000).

• A 50% productivity capture rate was applied: TEI methodology does not assume that all time freed up necessarily goes back to productive use, rather it can reduce the need for after-hours work.

• The third-party auditing service fees can be wholly avoided.

Risks. The impact of this benefit could be lower for an organization like the composite because:

• The data and reporting effort is initially lower.

• The auditing fees are initially lower.

• The facilities management annual salary is lower.

Results. To account for these risks, Forrester adjusted this benefit downward by 10%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of €38,000.

Reduced Medical Supply Waste

Evidence and data. Some interviewees in the healthcare industry reported reductions in waste and other potential costs following the Building X implementation. They noted that critical room monitoring is an important use case to ensure particular conditions, such as humidity and temperature levels, are maintained in certain spaces. This is enabled by the core functionalities of Critical Space Monitoring, with Data Visualizer providing dashboard overviews. Furthermore, interviewees said that better building automation systems and equipment monitoring could also reduce potentially damaging issues such as leaks, security breaches (in the case of access control use cases), and electrical faults. Beyond healthcare, organizations in other industries may experience slightly different but related benefits, such as reduced building damage or avoided supply waste (e.g., artifacts in a museum).

• The system facilities operations director in the healthcare industry explained: “We were wasting costs by just throwing away medical supplies because we weren’t proactively monitoring humidity. … This is why it’s been great even from a cost perspective.”

• The director of facilities in the education industry said, “Early leak detection can prevent tens to hundreds of thousands of dollars in damage from a single incident.”

Modeling and assumptions. This benefit was quantified by making the following assumptions about the composite:

• The critical room monitoring use case is live in both hospital buildings from the beginning of Year 2.

• Medical supply spend is €20 million per hospital building.

• One percent of this is wasted annually, equivalent to €400,000.

• Five percent of this waste can be avoided following the Building X investment in the first Year of the Critical Room Monitoring use case, increasing to 10% in the following year.

Risks. While the assumptions are conservative, it is possible that this benefit could be lower if:

• The cost of medical supply waste is lower.

• Medical supply waste monitoring is already higher, so the reduction impact would be lower.

Results. To account for these risks, Forrester adjusted this benefit downward by 20%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of €37,000.

Unquantified Benefits

Interviewees mentioned the following additional benefits that their organizations experienced but were not able to quantify:

• Improved sustainability posture. All the interviewees’ organizations were better able to collect, report, and validate energy consumption and further demonstrate reductions in electricity and gas use. This enables improved sustainability positioning, which can support business growth, attract investors, reduce noncompliance risks, and reduce the cost of debt. This is primarily driven through Energy Manager.

• Increased commercial value of buildings. By reducing operational costs and improving data reporting, Building X can make commercial buildings more attractive to potential customers and/or investors. With lower maintenance and management costs and transparent reporting, landlords can potentially charge more to rent or sell their property. In the case of healthcare-related buildings, the conditions for customers (e.g., patients) are improved, which can also result in better patient outcomes.

• Improved employee experience. In some cases, interviewees shared that the employee experience had improved. “Time is freed up for facilities teams; there is less need for after-hours work and the conditions in buildings are better for everyone.

Flexibility

The flexibility and scalability of Building X is a core part of its value proposition since organizations can add additional buildings and use cases, thus increasing overall benefits.

• Establishing a single data platform across a portfolio of buildings. Different organizations require varying portfolios of buildings to operate. The composite organization has two hospital buildings and a single office. The real estate organization owns multiple offices, hotels, and other commercial properties. One of the two healthcare organizations has multiple treatment facilities including hospitals and care centers. By implementing Building X across a portfolio of different building types, facilities management becomes more efficient, data reporting is easier and faster, and learnings and best practices can be shared. “We have implemented Building X in one building and are planning for at least seven to eight more,” the energy and sustainability expert in the real estate industry said. The director of facilities in the education industry noted, “There are benefits of standardizing on a single platform across our facilities.”

• Increasing the number of use cases. Building X enables multiple different use cases, which can be added as required following initial implementation and connection, thus increasing value. Interviewees described starting with a particular use case, often energy, and then adding another at no or limited additional implementation cost.

• Optimizing the adoption journey depending on specific priorities. Every organization is unique and has different requirements, buildings, and priorities. They can choose and optimize how to implement Building X to best suit them, thus maximizing benefits and ROI.

Flexibility would also be quantified when evaluated as part of a specific project (described in more detail in Total Economic Impact Approach).