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.


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.

Why The IoT Means You'll Never Run Out Of Paper

Alfred Becker

In business, efficiency is critical. Any improvement to a standing process – even if relatively small – can have a profound impact when scaled up. Consider, for example, software that allows a train to travel more efficiently. While cutting a minute or two from a trip may not seem that significant, when those fuel savings are scaled up over thousands of trips, it becomes a serious cost savings.

The Internet of Things (IoT) has had a transformational effect on industries seeking to make their processes easier and more efficient. By leveraging the power of connected devices and data analysis, companies and governments are figuring out new ways to modernize established processes. Cities use IoT technology to reduce traffic congestion and pollution. Farmers use connected devices to improve crop yields. Railways use IoT technology to enhance safety and timeliness.

And companies can use it to ensure they never run out of paper supply.

How the IoT can keep paper supplies fully stocked

The applications of IoT technology are so varied as to seem almost unlimited. Companies are discovering ways, large and small, to increase productivity and efficiency through the use of data-based sensors and other devices.

Consider the case of paper companies and printer producers. The two have what should be a naturally synergistic relationship. Each produces half the equipment in a common office device. Yet, historically, paper companies and printer producers haven’t necessarily worked together. A business purchases its printers and paper from separate suppliers. Paper is restocked either through an ordering process initiated once paper stock runs low, or though a planning process that automatically orders paper through electronic data interchange (EDI). Both approaches are based on planned paper consumption, not real-world use, which often is different. In addition, there is always a time lag, even using the planning approach, between paper order and receipt.

It’s easy to see the inefficiency in this process. Waiting for the printer’s “load more paper” light to start flashing is a reactive move. It’s also inefficient, as it all but ensures printers regularly run out of paper, forcing workers to wait while paper is resupplied or go to another location.

Now consider an even larger problem for companies that require a variety of specific paper types in order to operate. If an error during the inventory process results in one paper type running out, the company’s productivity slows and costs rise while it waits for delivery.

Fortunately, this is a scenario that no longer needs to occur, thanks to IoT-driven process improvements. Paper companies and printer producers can collaborate to ensure paper supplies remain constant. Sensors can transmit data from printers to paper companies, showing the precise type of paper being used and predicting when it will need to be replenished. This real-time data can be integrated into the planning process – ideally using the print shop’s production planning software – and order paper automatically via EDI based on actual consumption.

This ensures there are no gaps in supply, no halt to productivity. The predictive power of IoT technology helps printer and paper companies collaborate in an efficient manner that benefits all parties: Businesses are guaranteed the timely replenishment of paper inventory. Printer and paper companies benefit from the synergies facilitated by the IoT. Print shops can offer customers the option to automatically stock paper as a value-added service, requiring no action from the customer.

The end result? Greater productivity, higher efficiency, enhanced collaboration, and new business opportunities.

The awesome growth potential of connected devices

Ensuring continuous access to paper is just one small example of the transformational power of IoT technology. Opportunities such as these can be found in virtually every industry. The way we work, live, travel, and take care of our health and our homes can all be improved through the use of smart, connected devices.

The most exciting thing? We’re only seeing the tip of the iceberg. Because IoT technology is relatively young, even more revolutionary opportunities are likely to develop. According to Gartner, roughly 8.4 billion connected devices will be in use in 2017. This represents a 31% jump over 2016. Business spending represents slightly less than 60% of the overall market.

By 2020, overall IoT spending is expected to reach nearly $1.3 billion. This rapid growth will be driven in part by increasing adoption in the manufacturing, retail, healthcare, and transportation sectors. Cross-industry IoT spending, featuring use cases relevant to all industries (think smart buildings), will also be a significant growth driver.

The takeaway

Ultimately, IoT technology holds not only the promise of sustained innovation and business transformation, but profound changes to the way we live and work. Having printers that never run out of paper is but one example of the almost countless number of opportunities that will arise as IoT technology matures.

Learn how to bring new technologies and services together to power digital transformation by downloading The IoT Imperative for Energy and Natural Resource Companies. Explore how to bring Industry 4.0 insights into your business today by reading Industry 4.0: What’s Next?


Alfred Becker

About Alfred Becker

Alfred Becker is the global lead for Paper & Packaging Industry
and Manufacturing within Mill Products Industries at SAP.

How Digitalization Connects Rural Farms In Africa

Tanja Reith

One benefit of digitalization is that it offers people more information about where food comes from and how it is processed. While this information is useful for individuals to make informed food choices, it also has benefits for improving agribusiness in rural areas and creating methods to better feed the world. In particular, Internet of Things (IoT) technology can be used to improve agribusiness in rural Africa and around the world.

Digitalization has enabled every part of the food supply chain to be connected. This includes rural farmers, such as smallholders in remote parts of Africa. With the IoT, enterprises are able to gain information from the farms, no matter where they are located. This method provides benefits to the local community, shares the food’s supply chain to the end consumer, and promotes sustainability.

Improved technology has helped remote African smallholder farmers connect to the global food supply chain. For example, rural farmers in developing countries (who wouldn’t otherwise have the means) can now access information on prices, agricultural methods, weather updates, and other data. On the other end of the supply chain, companies can trace their products origins and paths. This helps them improve processes, ensure quality, and pass information on to end customers.

An SAP white paper, Value Creation in the Digital Agribusiness Network, shows how rural farming in Africa greatly affects the world. On the continent, sub-Saharan Africa’s agriculture industry employs 65% of Africa’s labor force. Globally, Africa’s agriculture affects the world. For example, 80% to 90% of global cocoa production originates in 5 to 6 million smallholder farms.

IoT has created the means to connect rural farmers to a broader value chain. In an article for Cleanleap, David Kariuki reported that IoT has created major advances that manage the effects of weather on agriculture in Africa. He explains that most of the arable land in sub-Saharan Africa is dependent on rainfall and affected by climate changes. But IoT provides information that can account for weather changes and improve practices. For example, it can use sensors and data sharing to improve knowledge on moisture levels of the soil, water predictions, and other important information that affects crops.

For Analytics Center, Emre Yayici explained that IoT creates more efficient and less expensive farming methods. Technology can help remote farmers cut down on water theft, reduce the need to hire farmhands to monitor crops, and better use small amounts of land. Yayici noted that IoT has made it easier for farmers to track conditions such as humidity levels and soil moisture and to better use water during droughts.

As the world has become more connected, it’s increasingly important to use technology to streamline the ways people work together. Technology and IoT have been creating better processes in agribusiness around the world and helping connect the supply chain. While these advances help businesses run better and improve quality and profits, they also provide changes that could better feed the world’s population. This is increasingly important with difficult growing conditions, changing weather, and an increasing global population.

Learn how to bring new technologies and services together to power digital transformation by downloading The IoT Imperative for Consumer Industries. Explore how to bring Industry 4.0 insights into your business today by reading Industry 4.0: What’s Next?


Tanja Reith

About Tanja Reith

Tanja Reith is a solution manager for the Agribusiness vertical in the Industry Cloud organization at SAP. She has over 15 years of experience in solution management and go-to-market roles for enterprise software, engaging closely with customers and partners across different industries such as agribusiness, consumer products, and financial services. Tanja’s ambition is to drive shared value resulting in business value to our customers while making a social impact and improving people’s lives.

Human Skills for the Digital Future

Dan Wellers and Kai Goerlich

Technology Evolves.
So Must We.

Technology replacing human effort is as old as the first stone axe, and so is the disruption it creates.
Thanks to deep learning and other advances in AI, machine learning is catching up to the human mind faster than expected.
How do we maintain our value in a world in which AI can perform many high-value tasks?

Uniquely Human Abilities

AI is excellent at automating routine knowledge work and generating new insights from existing data — but humans know what they don’t know.

We’re driven to explore, try new and risky things, and make a difference.
We deduce the existence of information we don’t yet know about.
We imagine radical new business models, products, and opportunities.
We have creativity, imagination, humor, ethics, persistence, and critical thinking.

There’s Nothing Soft About “Soft Skills”

To stay ahead of AI in an increasingly automated world, we need to start cultivating our most human abilities on a societal level. There’s nothing soft about these skills, and we can’t afford to leave them to chance.

We must revamp how and what we teach to nurture the critical skills of passion, curiosity, imagination, creativity, critical thinking, and persistence. In the era of AI, no one will be able to thrive without these abilities, and most people will need help acquiring and improving them.

Anything artificial intelligence does has to fit into a human-centered value system that takes our unique abilities into account. While we help AI get more powerful, we need to get better at being human.

Download the executive brief Human Skills for the Digital Future.

Read the full article The Human Factor in an AI Future.


Dan Wellers

About Dan Wellers

Dan Wellers is founder and leader of Digital Futures at SAP, a strategic insights and thought leadership discipline that explores how digital technologies drive exponential change in business and society.

Kai Goerlich

About Kai Goerlich

Kai Goerlich is the Chief Futurist at SAP Innovation Center network His specialties include Competitive Intelligence, Market Intelligence, Corporate Foresight, Trends, Futuring and ideation.

Share your thoughts with Kai on Twitter @KaiGoe.heif Futu


The Human Factor In An AI Future

Dan Wellers and Kai Goerlich

As artificial intelligence becomes more sophisticated and its ability to perform human tasks accelerates exponentially, we’re finally seeing some attempts to wrestle with what that means, not just for business, but for humanity as a whole.

From the first stone ax to the printing press to the latest ERP solution, technology that reduces or even eliminates physical and mental effort is as old as the human race itself. However, that doesn’t make each step forward any less uncomfortable for the people whose work is directly affected – and the rise of AI is qualitatively different from past developments.

Until now, we developed technology to handle specific routine tasks. A human needed to break down complex processes into their component tasks, determine how to automate each of those tasks, and finally create and refine the automation process. AI is different. Because AI can evaluate, select, act, and learn from its actions, it can be independent and self-sustaining.

Some people, like investor/inventor Elon Musk and Alibaba founder and chairman Jack Ma, are focusing intently on how AI will impact the labor market. It’s going to do far more than eliminate repetitive manual jobs like warehouse picking. Any job that involves routine problem-solving within existing structures, processes, and knowledge is ripe for handing over to a machine. Indeed, jobs like customer service, travel planning, medical diagnostics, stock trading, real estate, and even clothing design are already increasingly automated.

As for more complex problem-solving, we used to think it would take computers decades or even centuries to catch up to the nimble human mind, but we underestimated the exponential explosion of deep learning. IBM’s Watson trounced past Jeopardy champions in 2011 – and just last year, Google’s DeepMind AI beat the reigning European champion at Go, a game once thought too complex for even the most sophisticated computer.

Where does AI leave human?

This raises an urgent question for the future: How do human beings maintain our economic value in a world in which AI will keep getting better than us at more and more things?

The concept of the technological singularity – the point at which machines attain superhuman intelligence and permanently outpace the human mind – is based on the idea that human thinking can’t evolve fast enough to keep up with technology. However, the limits of human performance have yet to be found. It’s possible that people are only at risk of lagging behind machines because nothing has forced us to test ourselves at scale.

Other than a handful of notable individual thinkers, scientists, and artists, most of humanity has met survival-level needs through mostly repetitive tasks. Most people don’t have the time or energy for higher-level activities. But as the human race faces the unique challenge of imminent obsolescence, we need to think of those activities not as luxuries, but as necessities. As technology replaces our traditional economic value, the economic system may stop attaching value to us entirely unless we determine the unique value humanity offers – and what we can and must do to cultivate the uniquely human skills that deliver that value.

Honing the human advantage

As a species, humans are driven to push past boundaries, to try new things, to build something worthwhile, and to make a difference. We have strong instincts to explore and enjoy novelty and risk – but according to psychologist Mihaly Csikszentmihalyi, these instincts crumble if we don’t cultivate them.

AI is brilliant at automating routine knowledge work and generating new insights from existing data. What it can’t do is deduce the existence, or even the possibility, of information it isn’t already aware of. It can’t imagine radical new products and business models. Or ask previously unconceptualized questions. Or envision unimagined opportunities and achievements. AI doesn’t even have common sense! As theoretical physicist Michio Kaku says, a robot doesn’t know that water is wet or that strings can pull but not push. Nor can robots engage in what Kaku calls “intellectual capitalism” – activities that involve creativity, imagination, leadership, analysis, humor, and original thought.

At the moment, though, we don’t generally value these so-called “soft skills” enough to prioritize them. We expect people to develop their competency in emotional intelligence, cross-cultural awareness, curiosity, critical thinking, and persistence organically, as if these skills simply emerge on their own given enough time. But there’s nothing soft about these skills, and we can’t afford to leave them to chance.

Lessons in being human

To stay ahead of AI in an increasingly automated world, we need to start cultivating our most human abilities on a societal level – and to do so not just as soon as possible, but as early as possible.

Singularity University chairman Peter Diamandis, for example, advocates revamping the elementary school curriculum to nurture the critical skills of passion, curiosity, imagination, critical thinking, and persistence. He envisions a curriculum that, among other things, teaches kids to communicate, ask questions, solve problems with creativity, empathy, and ethics, and accept failure as an opportunity to try again. These concepts aren’t necessarily new – Waldorf and Montessori schools have been encouraging similar approaches for decades – but increasing automation and digitization make them newly relevant and urgent.

The Mastery Transcript Consortium is approaching the same problem from the opposite side, by starting with outcomes. This organization is pushing to redesign the secondary school transcript to better reflect whether and how high school students are acquiring the necessary combination of creative, critical, and analytical abilities. By measuring student achievement in a more nuanced way than through letter grades and test scores, the consortium’s approach would inherently require schools to reverse-engineer their curricula to emphasize those abilities.

Most critically, this isn’t simply a concern of high-tuition private schools and “good school districts” intended to create tomorrow’s executives and high-level knowledge workers. One critical aspect of the challenge we face is the assumption that the vast majority of people are inevitably destined for lives that don’t require creativity or critical thinking – that either they will somehow be able to thrive anyway or their inability to thrive isn’t a cause for concern. In the era of AI, no one will be able to thrive without these abilities, which means that everyone will need help acquiring them. For humanitarian, political, and economic reasons, we cannot just write off a large percentage of the population as disposable.

In the end, anything an AI does has to fit into a human-centered value system that takes our unique human abilities into account. Why would we want to give up our humanity in favor of letting machines determine whether or not an action or idea is valuable? Instead, while we let artificial intelligence get better at being what it is, we need to get better at being human. That’s how we’ll keep coming up with groundbreaking new ideas like jazz music, graphic novels, self-driving cars, blockchain, machine learning – and AI itself.

Read the executive brief Human Skills for the Digital Future.

Build an intelligent enterprise with AI and machine learning to unite human expertise and computer insights. Run live with SAP Leonardo.


Dan Wellers

About Dan Wellers

Dan Wellers is founder and leader of Digital Futures at SAP, a strategic insights and thought leadership discipline that explores how digital technologies drive exponential change in business and society.

Kai Goerlich

About Kai Goerlich

Kai Goerlich is the Chief Futurist at SAP Innovation Center network His specialties include Competitive Intelligence, Market Intelligence, Corporate Foresight, Trends, Futuring and ideation.

Share your thoughts with Kai on Twitter @KaiGoe.heif Futu