The Future of Portfolio Management

Over the last two decades, technological advancements have galvanized the shift toward a more connected infrastructure ecosystem. The number of IoT-connected devices is predicted to jump to more than 25 billion by 2030. As these IoT devices have become more accessible, they have opened new possibilities. One of the most urgent needs that these IoT capabilities are addressing is reducing carbon emissions.

The demand for energy optimization has fueled the proliferation of smart buildings: intelligent built environments run by a network of self-regulated systems. This has only been accelerated by tenant expectations evolving over time. In the wake of the COVID-19 pandemic, tenants are increasingly seeking smarter, healthier and more sustainable spaces in which to live and work. Overwhelmingly, tenants expect automated technology solutions as part of their leasing agreements.

As this wave of digital transformation continues, building owners see greater opportunities to maximize their fixed assets and improve cost margins. From lighting to security, every element of infrastructure can now be analyzed and optimized for cost efficiency. However, siloed data can make it difficult to gain the transparency required to make informed decisions. Despite innovations across the industry, many buildings continue to run on antiquated data systems of print outs, PDFs and hard drives. Even for those connected to IoT devices, the use of proprietary software and different programming languages means that data is often fragmented and siloed. This makes it difficult for owner-operators to aggregate and compare data to see the larger picture.

These challenges translate to a tangible change in the FM’s role. Demand from owner-operators to provide more comprehensive, real-time data requires a macro approach to asset management. What was once seen as a primarily hands-on operations role will evolve to become far more multifaceted. The use of virtual modeling technology like digital twins to drive decision making will become part of the day-to-day for FMs.

The shift is already underway, and this is only the beginning. To effectively adapt, FMs must move with changing technologies, not resist them. By making these three simple mindset shifts, FMs can confidently navigate and adapt to the new frontier of asset management.

Mindset shift 1: From a single-building focus to portfolio-wide visibility

The challenge

The rate of multi-facility portfolios is rising exponentially in Australia. Data from Property Update shows that more than 19 percent of property investors own more than one property: up by 2.7 percent over the last year. As such, the focus is no longer solely about squeezing better profit margins out of one singular building. Building owners and operators are thinking more about managing, comparing and contrasting multiple assets. Driving efficiencies now requires a bird’s-eye view across their entire portfolio.

This demand for greater visibility is transforming FM’s roles. Today, the sole focus is managing their singular asset. However, the "portfolio-level FM” is a role building owners will soon require. FMs will be expected to monitor not only their own facility, but other peer buildings in their portfolio. This requires a widespread mindset shift: zooming out with a macro lens to view their facility as part of the bigger picture.

The solution

For the modern-day FM, knowledge is power.

Technology will provide greater transparency in asset performance and with that, greater accountability for each FM. However, by embracing this same technology, FMs can ensure they are always one step ahead. Virtual modeling software like digital twins equip FMs with real-time data across the entire asset portfolio. From profit margins to occupancy rates, this comparative data is readily available without the need for complex analysis.

If FMs have visibility of peer buildings, they can understand how their asset compares with other facilities. In turn, they play a crucial role in upholding high standards across the portfolio: making them even more indispensable to building operators.

Mindset shift 2: From specific systems to a single source of truth

The challenge

FMs know how to run their buildings like clockwork. They understand their systems inside-out and have their finger on the pulse of everything from plumbing to air quality. Often, FMs have an intuitive understanding of how these moving parts work together. However, bringing visibility and transparency around these operations is another story.

Many IoT devices are controlled by proprietary software to prevent third parties from accessing data and to preserve maintenance contracts. Incompatible programming languages and varying protocols across locations further siloes the data. Without a single source of truth, it can be difficult to relay important data to key stakeholders like leasing agents, asset managers, engineers and security operators. The low trust and accuracy in this data can block crucial problem solving and decision making.

The solution

Having one unified data source goes a long way in minimizing operational headaches. Technology like digital twins brings data from disparate systems together into a live, digital representation of the asset. Using virtual modeling, they provide real-time insights into everything happening in the building. With remote access to cloud-based data, owners, contractors and tenants can instantly see relevant data in context. This reduces the pressure on FMs to be the intermediary and minimizes miscommunication and error.

With more comprehensive reporting in place, FMs can also be more efficient in their daily responsibilities. Real-time remote data also allows FMs to diagnose problems and devise solutions without making a trip on site. This not only saves time but also generates cost savings: it is estimated that predictive practices can reduce a building’s maintenance and energy cost by up to 20 percent.

Mindset shift 3: From dispersed data to greater data governance

The challenge

Managing data with discipline is the first step in building an enterprise portfolio. However, greater interconnectivity comes with its own distinct challenges. Sensitive information is dispersed across various IoT devices, each with varying levels of security. There is a lack of uniform classification across proprietary software packages, and data protocols differ widely between countries. Further complicating matters, many individual software solutions use their own costly and insecure third-party integrations.

In the move toward scaled asset management, the role of data governance and security will become a primary concern for FMs. As the first port of call for information, managing complex data will become an unavoidable part of their role. Cybersecurity is part of that equation, too. A comprehensive strategy is required to protect operational technologies from cyber threats such as malware and hacking.

The solution

Intelligent digital systems will prove crucial in helping FMs adapt to the new demands of their role.

Common misconceptions about modern data-management solutions are that they are expensive, intricate, time-consuming to roll out and not scalable. While that may be true of the siloed data solutions of the past, new innovations in technology are quickly changing this.

By providing accurate, near-instantaneous data in a single source of truth, these technologies help FMs navigate key trends in managing their assets. Rather than producing individual, high-fidelity solutions that are as unique as snowflakes, this technology provides the essential components of digitization at scale. In doing so, they empower FMs and operators with the tools for proactive, data-led decision making.

In creating a common data environment with a normalized data language, digital twins also provide robust cybersecurity solutions. Using baseline digitization and incorporating OT threat protection allows recognition, identification and elimination of malware, ransomware technology disruption and physical threat attacks.

How digital twins can help FMs navigate the future of scaled asset management

Digital twins are not just another cumbersome tool that FMs must learn on top of their existing operational duties. Nor do they exist to replace the discipline of the FM. Instead, technologies like digital twins act as a highly intelligent ally in the inevitable shift toward scaled asset management. They amalgamate and augment building data that already exists to help FMs oversee and manage multi-facility portfolios.

Their role is to make FMs more effective in their day-to-day role.

In doing so, digital twin facilities make the role of FMs even more valuable. As the discipline continues to evolve, the responsibility of the portfolio-led facility manager will focus less on putting out fires (both real and metaphorical), and more on preventive action and high-level decision making. Armed with the right mindset and tools, adaptable FMs will not only survive, but thrive in their expanded roles.