I recently read with interest a US article looking at “How Lifecyle Cost Analysis Can Make a Better Case for Green Building” by Molly Miller on the GreenBiz site (http://bit.ly/A1MZOt).
It was a great article, with some interesting points around the importance of Lifecyle costing as a way to keep engineering consultancies ahead of their game. It would seem that the US market is similar to the UK in that the competitive nature of the marketplace has seen many small firms go under in recent times. The way larger businesses are setting themselves apart is by valued-added services, prinicipally lifecycle cost analysis.
The article actually used a case study of a business called DMA which has incorporated lifecycle cost analysis into 99% of all projects at no extra cost to the client but with the benefit of demonstrating to the client how DMA can set itself apart from competition across all of its projects. A simple example of its effectiveness is highlighted in the article by a recent DMA project with a solar-heated pool which required approval by City Council members via the facilities manager. By using lifecycle cost analysis it demonstrated clearly to the City Council members the financial incentive to green light the project. According to the article, DMA uses lifecycle cost analysis to….
“Compare different types of systems over the lifetime of a building. The price of new equipment is an easily comprehensible but incomplete cost. Lifecycle cost analysis also accounts for future costs. Lifecycle cost analysis adds in maintenance, energy use, tax incentives or rebates, and any salvage value. It also can cover replacement costs. For example, really good windows may last 50 or more years, so it’s not likely building owners would account for their replacement. Rooftop units, on the other hand, which are usually considered an inexpensive heating and cooling solution for commercial buildings, must be replaced much more frequently.”
This type of scenario supports our experience with some key early customers who are looking to use the lifecycle costing benefits of kykloud software to give them an edge over any competition. It’s an unfortunate reality that green buildings and eco-technology cost more than a traditional build and in many projects, a full business case of the real and long-term benefits of the technology needs to be provided to ensure the project continues. This is where lifecycle cost analysis really comes into its own as a value added tool.
Ms Milner’s article highlights the importance of the bigger picture when it comes to making design and business decisions. The article cites Rocky Mountain Institute (RMI) Consultant, Mike Bendewald who recommends lifecycle cost analysis as standard practice, and is currently helping the U.S. General Services Administration (GSA) Mid-Atlantic Region account for hidden, societal costs when making commercial building retrofit decisions. Working with Steven Winter Associates and the Athena Institute, RMI is helping GSA to use Lifecycle assessment and account for the environmental impact of building retrofits and operation, to then convert the impact into a dollar value.
To encourage wider use of lifecycle cost analysis, DMA believes we should make lifecycle cost analysis a formal part of the construction process and certified to an industry standard. Or as Steven Forrester from DMA states…
“If lifecycle cost analysis had a leg to stand on, you could take it to a bank or an appraiser and say the one with the more efficient system is the more valuable building. We really need to get the financial planners involved and make the tools more streamlined in order to make lifecycle cost analysis more mainstream. Then, perhaps he wouldn’t have to offer it for free.”
But it is exactly the process of making lifecycle cost analysis tools more streamlined and mainstream that kykloud has achieved with its built asset management software. Kykloud can offer design and building operators a simple to use but effective lifecycle cost analysis platform that can be accessed by a number of different teams across various projects. Not only will it allow you to store your data and analysis on line but it can be used across a business, from any location, thanks to cloud technology. Based on the examples put forth by the Ms Milner’s article, it is through dedication to innovation in the area of Lifecycle cost analysis that In this tough economic climate, can truly make your business stand out from the competition.