Virtually overnight, the Covid-19 pandemic has changed the world as we knew it. Certain parts of the global economy came to a complete halt, while others had to ramp up capacity in an unprecedented way. As we witness now, returning to a New Normal brings about its unique challenges. Smart technology can help ease the transition – and so can smart financing.
After public spaces and communal areas were suddenly associated with risks, factories, offices and shops have slowly begun to welcome back workers and customers. Building owners must re-think how to operate their premises, ensuring the trust, comfort and safety of the people frequenting their sites. This is where smart financing can support the transition to smart buildings.
Going digital delivers savings
Pre-pandemic, the digital transformation of buildings has largely focused on efficiencies and ecological aspects, as non-residential sites produce 10-15% of global carbon emissions. Upgrading a building will help to reduce its emissions by 15-25%.
OPEX instead of CAPEX – companies need to focus on the greatest possible benefit instead of solely taking investments. Flexible, usage-based payment models are on the advance.
But digitalization has more to offer than ecofriendly productivity and cost savings. Digital experiences can help to restore people’s trust in shared and public spaces and ensure their well-being. Sensors in entrances can keep track of the number of people accessing a building and monitor body temperature. Solutions like the Comfy app, which is currently being rolled out in cooperation with Salesforce, allow office workers to identify and book desks. Contactless payment options let consumers avoid using cash when paying in stores and restaurants.
What’s more, these digitally enabled sites offer benefits not only for the users and the environment but can deliver financial savings for building owners and operators.
Any large-scale change requires an initial investment. Having the right financing approach is key to managing the impact of this pandemic and enabling digital transformation. Smart Finance Solutions that are tailored to the specific project’s requirements allow for a building upgrade at low or even no additional costs.
How do Smart Finance Solutions work?
- “X as a Service”, like e.g. “Smart building as a service”, can generate savings to cover investment costs. Here, the building owner pays for improved technical performance as part of a flexible payment plan. These service contracts can cover upgrading and servicing technology, increasing energy efficiency, charging infrastructure for electric mobility or the storage of green energy.
- “Pay-for-performance” solutions based for example on MindSphere, the cloud-based, open IoT operating system, bring digitalization into the financing process itself. The instalments align with the actual performance use of the financed machine and thus offers great flexibility. This solution offers a high level of transparency, enabling calculable variable costs and allowing users to evaluate the data that is generated using various MindSphere apps.
- For larger infrastructure projects, there are also options for project and structured financing or active participation in projects through equity investments as is currently the case for example with airports.
The global health crisis has accelerated a larger trend: smart buildings generate value not only from the property itself, but also from the services they provide. As the nature of services continues to evolve, in response to changing user expectations, flexible financing solutions will help building operators stay ahead of the curve.