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Why Green Building Requires Construction Companies To Digitize

Aasawari Kakade

The global green marketplace grew to $260 billion in 2013, reflecting steady client and market demand for green construction. Between 2015 and 2023, commercial building owners and managers will invest an estimated $960 billion globally in green infrastructure. Top green construction investment priorities include retrofitting old buildings, investing in energy-efficient heating, ventilation and air conditioning, and upgrading plumbing fixtures and other key technologies, reports the U.S. Green Building Council.

Green construction is rapidly becoming a competitive differentiator for construction projects. From major office buildings to multi-family developments, the market for green construction remains resilient even in the face of economic challenges. Demand for residential green construction grew from $18 billion in 2009 to $48 billion in 2013, despite the economic recession. Companies and consumers are voting with their wallets: green construction is here to stay.

Construction companies that fail to meet this market demand risk being out-performed by the competition. The digitization of the construction industry creates new opportunities for innovation and improving green methods in construction.

LEED certification and greening construction

Integrating green methods into construction is an opportunity to better use available resources while creating healthier and more energy-efficient homes and buildings. This starts with LEED certification. LEED, short for Leadership in Energy & Environmental Design, is a green building certification program that recognizes best-in-class building strategies and practices. To receive LEED certification, building projects satisfy prerequisites and earn points to achieve different levels of certification.

For example, the use of spray polyurethane foam (SPF) insulation is increasing in both new and existing homes. Using SPF can help lower heating and cooling costs thanks to a significant reduction in building-envelope air leakage, according to recent studies by the U.S. Department of Energy Building America program. The biggest energy savings are achieved when homes use SPF together with energy efficient windows and doors, HVAC systems, hot water heating, major appliances, and lighting. For example, LEED-certified buildings use 25% less energy than non LEED-certified buildings, which translates to a 19% reduction in aggregate operational costs.

Industry pushing for Green Construction Code updates, compliance documentation challenges remain

In 2014, industry representatives joined together to announce new amendments to the International Green Construction Code (IgCC). The goal is to strengthen code enforcement for energy codes, proactively assess buildings for energy performance, more effectively capture energy-saving strategies (like building orientation) in codes, and empower the International Energy Conservation Code to recognize reductions in energy use at the systems level.

Representatives from across the building industry, including code officials, building owners, manufacturers, designers, and energy efficiency advocates, have come together under the leadership of the National Institute of Building Sciences to develop a new approach to meeting energy efficiency requirements.

“A new compliance path based on targeted energy outcomes in the IgCC would represent a transformative change in the building industry that may be as significant as the advent of energy codes more than 35 years ago,” said Ralph DiNola, executive director of the New Buildings Institute. “This evolution to outcome-based performance requirements recognizes that prescriptive and modeled design approaches are often not representative of the actual energy outcomes of buildings, and that current codes fail to regulate some of the most significant energy end uses in buildings today.”

DiNola accurately sums up one of the greatest challenges facing the green construction industry: despite the best efforts of the construction industry, a single, unified approach to documentation remains a challenge. New compliance regulations will create a simplified, streamlined approach to green building, but they also pose a challenge to construction companies that may not have the resources to accurately measure energy savings reductions.

The greening of the construction industry

Sustainable, “green” construction is rapidly becoming standard practice. Between 2013 and 2015, 63% of construction companies completed new green projects, and 50% completed renovation/retrofitting work, reports McGraw-Hill’s research into world green building trends. “Going green” is not just a trend for construction companies; it is a business imperative.

Green builders face challenges putting best practices into reality. New products such as low volatile organic compound (VOC) coatings, for example, may require special installation procedures in order to perform, so contractors can’t rely on tried and true methods. They must access and use current, accurate information to ensure quality installation and compliance. The same goes for the LEED standards that are driving sustainability projects. In order to achieve and document the performance levels required in LEED facilities, contractors must remain nimble. Digital construction solutions can help.

Next steps: How digitization supports green building practices

In a digital world, new business models are emerging to disrupt traditional business processes. This includes the emergence of an open talent economy that breaks people skilled in green construction methodologies together in a borderless workplace. Contractors can scale operations rapidly by sourcing experienced talent from trade workers and management via a talent network. Digital collaboration tools and networks further support this borderless workplace, empowering effective collaboration within teams and between partners and clients. This digital approach delivers real-time status updates and eliminates lost downtime waiting from materials and equipment.

SAP’s ERP core provides near real-time information and creates the backbone required for managing projects effectively and distributing the knowledge to all the stakeholders. These digital solutions are essential to helping construction companies remain nimble and adopt green building best practices.

For more insight on this new digital age of construction, see Building a Sustainable World, How to survive and thrive in a digital construction economy.

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Aasawari Kakade

About Aasawari Kakade

Aasawari Kakade has over 11 years of experience working with customers in the Construction industry. Prior to joining SAP 3 years ago, she ran global marketing for another niche construction specific ERP. While at SAP, she is responsible for leading the SAP Advisory Council for EC&O industry along with many industry specific activities focused on enabling customers with the right SAP technology to support their business strategies and innovation objectives.

How Technology Provides Smart, Secure Parking For Truck Drivers

Gil Perez

If you’ve planned a trip recently, you’ve likely spent time researching and booking hotels, perhaps using one of a growing number of travel websites. Many people wouldn’t dream of setting off without a clear idea of where they’re going to sleep that night.

This, however, is a daily reality for truck drivers.

Facing a parking crisis

In Germany alone, there is a deficit of 14,000 official truck parking spaces. With no way of knowing where they can find available spaces in advance, truckers approach an average of four different parking areas before they find a free parking slot.

Robust statutory requirements for drivers to take timed rest periods only add to the pressure. Violation of the strict rest period rules can result in serious legal consequences for both drivers and their employers. And with an immovable deadline for getting off the road, drivers who can’t find an official space often have no choice but to find a less-appropriate alternative.

Parking by the side of the road can obstruct traffic and creates a driving hazard, endangering both the truck driver and the public. And parking in dimly lit industrial areas can put the driver and the cargo at risk from criminal activity. Trucks parked in unofficial parking spaces risk cargo theft, often perpetrated by organized criminal gangs.

Giving drivers the information they need

Now, Boschhas the potential to transform the way logistics and forwarding companies manage parking arrangements for their trucks. Leveraging cloud-based technology within a connected parking solution, Bosch Secure Truck Parking allows drivers to find and reserve available parking spaces in advance using an online booking portal.

Enabled by the Internet of Things, Bosch can link the booking portal to access control systems at truck parking sites across Germany. Based on number-plate recognition, access is granted only for trucks that have a reservation. Payment is then made online by the company that owns the truck.

Saving costs and improving efficiency

For forwarding and logistics companies, the solution offers considerable savings in both costs and efficiency. Last year, €1.5 billion was lost in Germany as a result of cargo theft. However, it isn’t only the value of the cargo lost that creates problems for the companies involved.

Theft can also cause significant delays in the delivery of products to their destination, either as a result of necessary repairs to the truck or sourcing new cargo. And in the age of just-in-time delivery contracts, a delay can result in substantial financial penalties for the logistics provider.

Taking the stress out of parking

Bosch Secure Truck Parking represents a massive change that could greatly improve quality of life for truck drivers. With a single stroke, it removes the stress of not knowing where or when they will find a parking space. It also enables drivers to set off on their journey comfortable in the knowledge that they and their cargo will be spending the night in a safe, secure environment.

Bosch’s vision is to enable every driver to have a pre-booked parking space waiting before they set off. For an industry in which every stage of the logistics process is worked out with the greatest precision to optimize efficiency, it is only surprising that this is the first solution to address this issue.

Helping to preserve our green spaces

In future, the secure truck parking solution also has the potential to help ease Germany’s truck parking space shortage. As well as enabling the state to manage its official parking sites more efficiently, the technology could also encourage a wide range of organizations to offer parking spaces to truck drivers.

Bosch’s online booking portal lets companies restrict bookings to specific periods, such as evenings or weekends only, when they don’t need the space for their own operations. All payments are made online so companies can benefit from an additional revenue stream without requiring additional staff to manage activity and handle cash transactions. And with automatic number-plate recognition technology controlling access barriers, companies can offer the service securely, confident that only trucks that have pre-booked can access their premises.

By increasing usage by trucks of existing parking sites, the solution can minimize the need to build new parking areas. This will not only provide significant cost savings for the state, it will also help preserve our precious green spaces for future generations.

To learn more about Bosch Secure Truck Parking, read the announcement or connect with us on @SAPLeonardo for the latest IoT news.

Connect with industry experts, partners, influencers, and business leaders at SAP Leonardo Live, our premier Internet of Things (IoT) conference for breakthrough innovation and technology. Register here and join us from July 11–12, 2017 in Frankfurt, Germany to experience how your company can run a digitized business.

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Gil Perez

About Gil Perez

Gil Perez is senior vice president of Digital Assets and The Internet of Things (IoT) and general manager of Connected Vehicles and IoT Security at SAP.

How To Ensure That Profitability And Sustainability Are At The Heart Of Your Firm

Derek Klobucher

The choice between profitability and sustainability is no longer a stark one, as promising companies start showing real gains — such as Tesla Inc. overtaking GM and Ford as the most valuable U.S. automaker by market capitalization. The Palo Alto-based electric automaker and energy storage company reached this milestone due in part to strong Q1 performance as its Detroit counterparts stumbled.

“While GM and Ford may have strong profits and healthy balance sheets, Tesla offers something Wall Street loves much more: the potential for dramatic growth,” The New York Times stated last week. “Tesla is going to change the world, and is primed to cash in on the two transformative trends in the industry: the shift to electric vehicles as part of a broader societal move to cleaner energy, and the advent of automated driving.”

Yes, Tesla has been green from the get-go. But it’s also possible for organizations that haven’t been eco-warriors from the start to blend profitability with sustainability — the noble endeavor to business while preserving natural resources and environmental harmony. And that’s a good way to please all kinds of stakeholders.

Choose your stakeholders wisely

A critical move for older companies — big and small — will be to deal with climate change-related issues in their boardrooms as opposed to sustainability departments, according to the MIT Sloan Management Review. Boards of directors would need to better understand how climate risks impact the bottom line, include climate risks among their organizations’ material risks, and determine their most significant audience.

“Boards that regard short-term shareholders as the only significant audience … would be unlikely to consider climate change as a material risk for reporting purposes,” MIT SMR stated last month. “Alternatively, boards that regard long-term shareholders and future generations of employees as a significant audience would likely consider climate change a material risk.”

Rather than reinvent the wheel, MIT SMR recommends that organizations ease into their sustainability transitions by:

  • Learning from existing work done by NGOs, accountants, academics, and others
  • Placing greater emphasis on the materiality determination process
  • Exploring circumstances and scenarios that could affect their business — and developing plans for them

Show me the numbers

Board members discussing sustainability with like-minded shareholders is one thing. It’s quite another for CFOs to quantify environmental values, such as habitat preservation or factory safety.

“Just utter the word ‘sustainability,’ and a finance chief’s eyes are likely to glaze over,” CFO.com stated last month. “The gains and losses of the next quarter are likely to be more compelling than the question of whether a company’s plants will have access to cheap energy over the next 20 years.”

But long-term investors, such as those mentioned by MIT SMR, are starting to change that. Finance executives will increasingly need granular data about how climate change will influence their organizations’ future balance sheets — because long-term investors such as endowments and pension funds are demanding that information, according to CFO.com.

The mother of invention

Moving to profitable sustainability isn’t always a luxury that organizations choose. Sometimes the environment forces it — resulting in innovation.

“In markets where the pressures of resource depletion are felt most keenly, corporate sustainability efforts have become a wellspring of innovation,” Harvard Business Review stated in 2013. The most successful companies studied followed one or more of three main approaches:

  • Long view: Relatively expensive upfront investment in sustainable operation methods that eventually — and dramatically — lowered costs and increased yields
  • Bootstrap: Small changes in processes that led to significant cost savings, which funded advanced technologies that increased production efficiency
  • Spreading out: Dispersing sustainability efforts to customer and supplier operations, which helped organizations develop new business models that competitors often couldn’t imitate

“Trade-offs between economic development and environmentalism aren’t necessary,” HBR stated. “Rather, the pursuit of sustainability can be a powerful path to reinvention for all businesses facing limits on their resources and their customers’ buying power.”

Moving toward sustainability

That “powerful path to reinvention” can also be consumer-driven, as GM and Ford have learned. And it’s not too late for legacy companies to get moving.

“The Detroit automakers are hardly sitting still in their efforts to improve current results and future prospects,” The New York Times stated. “Both [GM and Ford] have bought technology companies to bolster their in-house engineering expertise.”

As Tesla prepares to launch its its new, mass-market all-electric car this summer, the company is synonymous with green high-tech and success. Though almost unthinkable now, GM and Ford could be implementing changes that would one day make them synonymous with sustainability and profitability too.

Follow Derek on Twitter: @DKlobucher

This article originally appeared on SAP Community Network, and is republished by permission.

Follow SAP Finance online: @SAPFinance (Twitter)  | LinkedIn | FacebookYouTube

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Derek Klobucher

About Derek Klobucher

Derek Klobucher is a Financial Services Writer and Editor for Sybase, an SAP Company. He has covered the exchanges in Chicago, European regulation in Dublin and banking legislation in Washington, D.C. He is a graduate of the University of Michigan in Ann Arbor and Northwestern University in Evanston.

The Future of Cybersecurity: Trust as Competitive Advantage

Justin Somaini and Dan Wellers

 

The cost of data breaches will reach US$2.1 trillion globally by 2019—nearly four times the cost in 2015.

Cyberattacks could cost up to $90 trillion in net global economic benefits by 2030 if cybersecurity doesn’t keep pace with growing threat levels.

Cyber insurance premiums could increase tenfold to $20 billion annually by 2025.

Cyberattacks are one of the top 10 global risks of highest concern for the next decade.


Companies are collaborating with a wider network of partners, embracing distributed systems, and meeting new demands for 24/7 operations.

But the bad guys are sharing intelligence, harnessing emerging technologies, and working round the clock as well—and companies are giving them plenty of weaknesses to exploit.

  • 33% of companies today are prepared to prevent a worst-case attack.
  • 25% treat cyber risk as a significant corporate risk.
  • 80% fail to assess their customers and suppliers for cyber risk.

The ROI of Zero Trust

Perimeter security will not be enough. As interconnectivity increases so will the adoption of zero-trust networks, which place controls around data assets and increases visibility into how they are used across the digital ecosystem.


A Layered Approach

Companies that embrace trust as a competitive advantage will build robust security on three core tenets:

  • Prevention: Evolving defensive strategies from security policies and educational approaches to access controls
  • Detection: Deploying effective systems for the timely detection and notification of intrusions
  • Reaction: Implementing incident response plans similar to those for other disaster recovery scenarios

They’ll build security into their digital ecosystems at three levels:

  1. Secure products. Security in all applications to protect data and transactions
  2. Secure operations. Hardened systems, patch management, security monitoring, end-to-end incident handling, and a comprehensive cloud-operations security framework
  3. Secure companies. A security-aware workforce, end-to-end physical security, and a thorough business continuity framework

Against Digital Armageddon

Experts warn that the worst-case scenario is a state of perpetual cybercrime and cyber warfare, vulnerable critical infrastructure, and trillions of dollars in losses. A collaborative approach will be critical to combatting this persistent global threat with implications not just for corporate and personal data but also strategy, supply chains, products, and physical operations.


Download the executive brief The Future of Cybersecurity: Trust as Competitive Advantage.


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How Digital Transformation Is Rewriting Business Models

Ginger Shimp

Everybody knows someone who has a stack of 3½-inch floppies in a desk drawer “just in case we may need them someday.” While that might be amusing, the truth is that relatively few people are confident that they’re making satisfactory progress on their digital journey. The boundaries between the digital and physical worlds continue to blur — with profound implications for the way we do business. Virtually every industry and every enterprise feels the effects of this ongoing digital transformation, whether from its own initiative or due to pressure from competitors.

What is digital transformation? It’s the wholesale reimagining and reinvention of how businesses operate, enabled by today’s advanced technology. Businesses have always changed with the times, but the confluence of technologies such as mobile, cloud, social, and Big Data analytics has accelerated the pace at which today’s businesses are evolving — and the degree to which they transform the way they innovate, operate, and serve customers.

The process of digital transformation began decades ago. Think back to how word processing fundamentally changed the way we write, or how email transformed the way we communicate. However, the scale of transformation currently underway is drastically more significant, with dramatically higher stakes. For some businesses, digital transformation is a disruptive force that leaves them playing catch-up. For others, it opens to door to unparalleled opportunities.

Upending traditional business models

To understand how the businesses that embrace digital transformation can ultimately benefit, it helps to look at the changes in business models currently in process.

Some of the more prominent examples include:

  • A focus on outcome-based models — Open the door to business value to customers as determined by the outcome or impact on the customer’s business.
  • Expansion into new industries and markets — Extend the business’ reach virtually anywhere — beyond strictly defined customer demographics, physical locations, and traditional market segments.
  • Pervasive digitization of products and services — Accelerate the way products and services are conceived, designed, and delivered with no barriers between customers and the businesses that serve them.
  • Ecosystem competition — Create a more compelling value proposition in new markets through connections with other companies to enhance the value available to the customer.
  • Access a shared economy — Realize more value from underutilized sources by extending access to other business entities and customers — with the ability to access the resources of others.
  • Realize value from digital platforms — Monetize the inherent, previously untapped value of customer relationships to improve customer experiences, collaborate more effectively with partners, and drive ongoing innovation in products and services,

In other words, the time-tested assumptions about how to identify customers, develop and market products and services, and manage organizations may no longer apply. Every aspect of business operations — from forecasting demand to sourcing materials to recruiting and training staff to balancing the books — is subject to this wave of reinvention.

The question is not if, but when

These new models aren’t predictions of what could happen. They’re already realities for innovative, fast-moving companies across the globe. In this environment, playing the role of late adopter can put a business at a serious disadvantage. Ready or not, digital transformation is coming — and it’s coming fast.

Is your company ready for this sea of change in business models? At SAP, we’ve helped thousands of organizations embrace digital transformation — and turn the threat of disruption into new opportunities for innovation and growth. We’d relish the opportunity to do the same for you. Our Digital Readiness Assessment can help you see where you are in the journey and map out the next steps you’ll need to take.

Up next I’ll discuss the impact of digital transformation on processes and work. Until then, you can read more on how digital transformation is impacting your industry.

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Ginger Shimp

About Ginger Shimp

With more than 20 years’ experience in marketing, Ginger Shimp has been with SAP since 2004. She has won numerous awards and honors at SAP, including being designated “Top Talent” for two consecutive years. Not only is she a Professional Certified Marketer with the American Marketing Association, but she's also earned her Connoisseur's Certificate in California Reds from the Chicago Wine School. She holds a bachelor's degree in journalism from the University of San Francisco, and an MBA in marketing and managerial economics from the Kellogg Graduate School of Management at Northwestern University. Personally, Ginger is the proud mother of a precocious son and happy wife of one of YouTube's 10 EDU Gurus, Ed Shimp.