Commissioning Market Research

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Commissioning Market Research

November 19, 2004
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Market Research
Five Research Questions

• What are the odds that any new, un-commissioned
  building will have flaws that financially impact
  the owner?
• What are the effects of those flaws on the
  building owner and occupants?
• What is the value to the owner of reducing the
  probability of flaws, the costs of commissioning
  as compared to other risk mitigate strategies and
  the price point commissioning needs to meet to
  remain competitive?
• Which commissioning processes meet these price
  points?
• What is the probability that these commissioning
  processes will prevent building flaws and deliver
  value to the owner?

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Market Research
1. Probability of Building Flaws

• Statistically significant evidence of the
  probability of failures in design, construction,
  operation
• Anecdotal evidence of severe failures
• For all sectors or only a few
• Tasks could include mining existing databases
  gathering new data through surveys, interviews,
  or building investigations reviewing RCx
  reports and defining data models and data
  collection protocols.

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Market Research
2. Effects of Building Flaws

• Statistically significant evidence of the costs
  of failures in design, construction, operation
• Anecdotal evidence of actual costs
• For all sectors or only a few
• Tasks would be similar to 1
• Costs studied could include schedule delays,
  cost overruns, warranty callbacks, energy,
  routine maintenance and repairs, system downtime,
  reduced productivity, tenant complaints/turnover
  and poor IAQ.

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Market Research
3. Value of Reducing Probability of Building
Flaws

• Determine perceived value of Cx based on
  probability of flaws and costs of effects
• Need to understand best way to communicate
  probabilities and costs to decision makers
• For all sectors or only a few
• Data collection methods could include focus
  groups, surveys, interviews and other traditional
  market research methods.

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Market Research
4. Cost-effective Cx Process

• Determine which aspects of Cx process provide the
  most value at the least cost
• Need to find the optimal Cx process to meet price
  points while providing required value
• Research goals could include collecting data on
  costs and benefits of Cx by activity and defining
  benefits.

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Market Research
5. Impact of Cx on Preventing Building Flaws

• Determine the probability that the identified Cx
  processes will prevent building flaws
• Need to make a compelling case that Cx reduces
  probability of flaws
• Data collection should focus on extensive and
  well-documented studies of the performance of
  commissioned buildings

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1. Introduction
Two perspectives on Cx

• Cx as an energy conservation measure (ECM)
• versus
• Cx as a tool to
• Increase attention to detail
• Improve communication
• Avoid building flaws

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1. Introduction
Two perspectives on Cx

• Cx is usually portrayed as one of many ECMs when
  it is proposed to a potential customer.
• But, Cxs non-energy benefits are a fundamental
  difference between Cx and other ECMs.
• How does selling Cx for its non-energy benefits
  require a shift in the Value Model and the Value
  Proposition?

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2. Cx as Insurance
New Construction

• Insurance and Cx are both ways to mitigate risk.
• Cx provides the most benefit where there is the
  greatest risk of building flaws, just like
  insurance benefits those who have the greatest
  risk of incident.
• Like insurance, the benefits of Cx depend on the
  probability of problems.

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2. Cx as Insurance
New Construction

• An insurance provider can say to a customer
• Theres X chance youll have a catastrophic
  accident this year, resulting in Y in medical
  bills, so this Z policy is a great deal!
• What if the Cx provider could say something
  similar
• Every year, X of buildings are built with
  flaws that have an average cost to the owner of
  Y and an impact on performance of Z.
  Commissioning reduces your risk of receiving a
  flawed building, and at Q, thats a great deal!

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2. Cx as Insurance
New Construction

• But we dont have enough data on the risk to the
  building owner of receiving a flawed product!
• No statistically significant studies of the
  probability of building flaws in both Cxd and
  un-Cxd buildings

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3. Cx as Immunization
New Construction

• Immunizations and Cx are both designed to prevent
  problems.
• Cx reduces the likelihood of building flaws, just
  like an immunization reduces the likelihood of
  getting a disease .
• In both cases, the decision to take preventative
  action depends on the probability and likely cost
  of experiencing the problem.

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2. Cx as Immunization
New Construction

• A person considering the flu shot may say to
  themselves
• I dont know for sure that Ill get the flu
  this year, but the cost of the flu shot is only
  X, and if I do get the flu I will suffer not
  only because Im sick, but because of lost wages
  and the cost of doctors and medicines.
• What if a building owner could say something
  similar
• I dont know for sure that my building will
  have flaws, but the cost of commissioning is
  only X, and if my building does have flaws the
  cost to me will be significant.

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2. Cx as Immunization
New Construction

• But we dont have enough data on the cost to the
  building owner of receiving a flawed product!
• No statistically significant studies of the costs
  to the owner.

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3. Implications
Argument

• Customers should not be told that Cx will save X
  or Y of construction or operating costs.
• These numbers are unknowable, and probably wrong
• Therefore, it doesnt make sense to market Cx the
  same way as an ECM, or to compare it to ECMs in
  incentive programs.

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3. Implications
A New Way to Market Cx

• Providers should base their marketing strategy
  around problems in un-commissioned buildings.
• Owners need to be convinced that the chances of
  receiving a flawless building are slim, and that
  flaws are expensive.
• There is NO cost that owners are willing to bear
  if they do not believe they are at risk.

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4. Market Research
Value Model

• A framework for describing how Cx provides value
  to various constituents
• Describes costs and benefits of Cx qualitatively
• Defines metrics for communicating costs and
  benefits
• Provides descriptive information as to Cxs
  specific, measurable values and its perceived
  or core values
• Identifies attributes that must be documented to
  provide a compelling case that Cx provides these
  values

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4. Market Research
Value Proposition

• A set of information that can be communicated to
  various categories of decision makers to compel
  them to choose commissioning
• Follows framework of the Value Model
• Includes documentation of the expected benefits
• Provides evidence of typical building flaws and
  worst case scenarios

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5. Scope and Budget

• Scope and budget still to be determined
• Guidelines
• Two or three years
• About 100,000 per year