April 27, 2023 | 10 minute

Measuring the ROI of Smart Building Solutions

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Smart building solutions are on the leading edge of digital transformations in workspaces across every industry. From healthcare facilities to corporate offices and more, IoT- powered solutions are delivering efficiencies and quickly transforming our traditional understanding of how we interact with work environments.

Applications built on IoT capabilities have proven their value to occupants, property owners and other stakeholders around the world while disrupting conventional facility management practices through easier optimization and streamlining of processes.

Energy use and savings, regulatory compliance, the employee experience and related factors like productivity and turnover, maintenance costs, environmental impact — all these areas and more have benefitted from leveraging the power of digital insights provided by location technologies into new processes and procedures.

And although the adoption of these smart building solutions continues to gain momentum towards their inevitable status as absolute must-haves, there are still organizations that are reluctant to fully commit to the process and pull the trigger on a deployment.

This is understandable since justifying such a deployment is typically done according to a procedure that requires demonstrable ROI on expenditures of this kind. Investments must pay for themselves and, despite widespread knowledge about the advantages of smart building solutions, explaining and detailing the ROI can be a challenge.

Financial gatekeepers and executives with the authority to greenlight facility-wide improvements need to be convinced with specifics about where cost savings will come from and when they can be expected. They can be reluctant to join in the enthusiasm over IoT-based solutions that quietly operate in the background, subtly shifting resources to better use and cutting waste in unseen ways.

That’s why we’ve put together this list of areas where smart building solutions can have a direct impact on the financial performance of any facility where they operate. Use them to help unlock investment decisions and push the conversation forward by pointing to the benefits they bring. Learn more about measuring the ROI of smart building solutions!

How to Measure the ROI of Smart Building Solutions

Measuring the return on investment in smart building solutions mostly means taking a close look at savings derived from four particular areas these solutions are especially effective:

  • Space optimization. Smart technologies can give you more accurate insights into how your space is used and if it is correctly divided in a way that meets your needs.
  • Automation. The real-time information gathered by IoT-powered infrastructures can be integrated with building management systems to automate things like environmental conditions, lighting and some security measures.
  • Preventative maintenance. With so many moving parts in physical systems in large buildings, something somewhere is nearly always approaching the point of breakdown or failure, restocking or routine maintenance. Sensor data collected from smart technologies can estimate when these events will take place and create preventative maintenance schedules to avoid closures, delays and other interruptions.
  • Tracking services. RTLS (Real Time Location Services) are the foundation of any number of applications that provide real-time insights into the location of assets, employees, visitors and more.

This is where the conversation about ROI starts. Let’s take a closer look at each one in turn and cover the details of how and where smart building solutions deliver tangible, measurable results.

Space optimization

How do you know that you have just the right amount of corporate space to accommodate the needs of your staff? Is the amount of space you’re using based on a best guess? Have you ever done anything to quantify your needs and compare it to your real estate commitments?

These are questions that are rarely asked and even less rarely answered in the corporate world despite the very significant costs associated with occupying and using office space.

With smart building solutions, constructing detailed use patterns of your office space is easy. With this digital representation of traffic flows and occupancy rates, you can get documented proof of how the space you pay for every month is or isn’t aligned with your actual needs in a way that simple manual observation never can.

Right-sizing real estate commitments is a basic element of the transition to smart offices and the savings can be significant. But there are other related, secondary costs that fall when the main expense of office space is reduced, including:

  • Furnishing expenses like IT infrastructure, furniture and other necessary equipment
  • Administrative costs and common area maintenance fees based on the area you occupy
  • Taxes placed on all real-estate costs

Space optimization should be on everyone’s list of post-pandemic reforms, given the new age of remote and hybrid work models. Smart building solutions based on IoT make it fast and simple to do.


Busy employees can be forgiven for not worrying too much about leaving lights on or allowing heating or cooling to reach extremes before noticing it. Still, the cost of these habits is real and comes in the form of an electric bill every month.

Real-time information gathered by IoT-powered infrastructures can be integrated with building management systems to automate things like lighting and environmental condition management to eliminate the human factor that allows for wasteful use of energy.

Combined with the right-sizing of real estate purchases mentioned above, getting control over energy consumption, particularly in heating and cooling unneeded areas, delivers significant monthly savings without a minute of personal intervention of anyone on staff.

Some security measures can also be automated in smart buildings. For example, visitors, vendors and other temporary guests can be given wearable badges that allow access to certain areas and not others, eliminating the necessity of escorts and keeping them away from areas that are sensitive because of security or safety concerns.

Preventative maintenance

Even moderately-sized spaces are home to a long list of physical systems, infrastructures and networks, each full of moving parts that have to be cleaned, maintained and sometimes replaced.

This creates multiple vulnerable points where a breakdown or failure can bring work to a stop. While some preventative care can be given through scheduled maintenance, most work in this area is done on a responsive basis, with action taken when a problem arises.

This means expensive downtime. Preventative maintenance when nothing is done is a costly form of insurance against failures that doesn’t always work.

IoT-based solutions can provide a better way.

With sensor data collected from smart technologies, better estimates can be made about when failure or breakdown events will take place, enabling better, smarter scheduling of preventative maintenance. This is a much more effective way to prevent closures, delays and other interruptions and the costs that come with them.

Location tracking services

Location tracking services and the insights that come from them are key functionalities of smart building solutions. They are the foundation of any number of applications that provide real-time insights into the location of assets, employees, visitors and more.

Here are some of the main benefits of location tracking and how they contribute to a healthier bottom line:

  • Asset tracking. Assets of all kinds can be tracked and located immediately using small, IoT-enabled badges or tags. The ability to locate all tracked assets in real time brings savings in these areas:
  • Accurate inventories. Conducting inventories of capital assets, office supplies  or goods for sale is time-consuming and labor-intensive, which means it is costly. On top of that, some facilities have to close down altogether to allow the inventory to take place, losing productivity and possibly sales in the process. Smart building solutions can provide instant, complete and accurate inventory information at the touch of a button, including for particular items or items in a particular location.
  • Over-purchasing of supplies. A direct benefit from accurate inventories is the ability to avoid over-purchasing of items. This is very common across all industries, especially in healthcare, resulting from a lack of facility-wide visibility. When you can make better, more informed purchasing decisions, savings will follow.
  • Increase in useful time of an asset.
  • Digital insights into workflows. Location tracking insights can build digital twins of your workspace that show movement patterns, the most and least-used areas and more. Bottlenecks can be identified, allowing you to make the needed adjustments to facilitate workflows and free up resources, boosting productivity instantly.
  • Redesign of used space. Those same digital twins of your workspace also provide you with documented employee and occupant movements over time. This means you can prove that certain underutilized areas are either unnecessary (and thus you can cut costs) or they can be redesigned to promote better productivity.

Nevertheless, there are always intangible benefits that cannot be credibly quantified. For instance, the positive effects of investment on the strategic positioning and brand image of an industrial enterprise can be hardly quantified.

Hard to quantify but still part of smart building ROI

The financial upside of smart building solutions extends beyond areas that are easy enough to measure or to make informed estimates regarding their economic benefit.

Consider things like employee retention. A comfortable, inviting work environment is no longer a nice extra, but an expected standard among employees. Working in a building that is equipped with solutions designed to make them more productive and mitigate the more frustrating aspects of office life is definitely a plus. Given the high costs of training and onboarding staff, reducing turnover is always a high priority in any organization.

Recruiting can get a big boost from smart building solutions. Prospective employees will consider a better working environment as a plus just as current employees do. The use of smart building solutions enhances the impression a facility makes and embracing this technology strengthens the reputation of employers that use them. In a competitive environment for top talent, this can be an edge in attracting the staff you’re looking for.

The sense of well-being that smart building technology can promote through office design, environmental monitoring and general comfort is also something that smart building solutions provide. In an era when employees place a greater emphasis on their well being and willing to change employers to maintain it, improvements in this area will deliver returns that are hard to quantify but certainly present.

Increase Your Workspace’s ROI with Smart Building

Investments in smart building solutions must go through the same process as other expenditures, proving their value and potential return on the investment in the process. This procedure is not just a way to safeguard the financial interests of an organization, but an opportunity to explore proposed solutions as well.

When looking at smart building solutions and the cost savings and efficiencies associated with them, it’s not always simple to illustrate the benefits in strict dollars and sense. Most of the solutions discussed here provide visibility and create the circumstances for better, more informed decisions about workplaces function and are organized. can help you to navigate this process and provide you with the information you need to demonstrate the value of investing in smart building solutions.

If you want to know more about how your facility can benefit from going smart, reach out to our smart building experts team today and have a look at a webinar we conducted on the topic – A Look Into New Standards in Occupant Experience Solving the Needs of Modern Employees where among other topics we will discuss the ROI from improving employee experience.

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