Those executives faced with reviewing new office space have many questions to ponder:

1. Is there criteria used to evaluate and select one type of building over the other?
2. How do executives make informed decisions on selecting buildings that offer intelligent amenities and support the needs of the business (i.e. broadband connectivity)?
3. Is there a way to structure a decision making process or comparison matrix that can categorize the technology and building automation?
4. What about risk and complexity factors in each area?

These are questions that were pondered 20 years ago and they are still very relevant today. Intelligent buildings are still a hot topic of discussion as well as a for a master’s curriculum.

The real estate market has become very aware of comparing office space again as competition for tenants has increased and the requirement for intelligent amenities can make a Class A building obsolete if it doesn’t offer this as a standard feature. The whole concept of measuring a building’s IQ has not evolved much since being introduced in 1986.

Forget the marble entrances and the glass and mirror elevators. These are traditional amenities that sophisticated tenants in both commercial and residential buildings take for granted. Today, people want broadband connectivity, security and other intelligent amenities.

Measuring Risk, Complexity of Applying Technology

There is an underlying concept of measuring technology in general. If we can lay a foundation for measuring the risk and benefits of technology that will be implemented, we can begin to build practical tools that can help steer the organization on the correct course. Using these tools, the organization must determine:

1. What are the organizational goals in implementing a new technology?
2. What if the technology doesn’t exceed the threshold of risk management is willing to undertake?
3. Does the technology maximize or minimize opportunities?
4. Does the technology maximize revenue streams or minimize losses?
5. What types of management procedures can be set in place to streamline approval and maximize profit potential (i.e. create opportunities rather than roadblocks)?

Questions like these are most often answered with a blurry and subjective analysis of choices. Decisions are not made using any rational process. Politics is one of the biggest obstacles to overcome in technology decisions. The decision to go with a certain building, technology or vendor is sometimes based on what the firm down the street has done.

Decisions on technology are also sometimes based on what someone heard at a conference or read in a trade journal about what the competition installed. Sometimes it’s even based on which vendor bought the most expensive dinner prior to the decision.

There are many areas to be reviewed in buildings. The determining factors differ depending on the type of technology, the application and the internal factors that are important to the organization. Not every variable is measurable.

Within organizations, internal politics and vendor allegiance can alter outcomes on strategic decisions and are not easily structured into a formula or algorithm.

The management procedure of measuring technology and its effectiveness is something that shapes future buying decisions (not only in real estate but in other areas as well). Some type of tool can really help in reviewing and selecting office space as well as for strategic direction.

With this type of aid, executives can readily make informed decisions based on objective logic rather than emotion. Wherever possible, the chief information officer or any senior management executive should rely on a decision making procedure instead of a subjective, hit or miss approach on evaluating and selecting a strategic direction.

Creating Management Yardsticks For Competitive Analysis

The concept of assigning risk and complexity factors to applying technology is fairly new. The use of a formalized approach in this area can reduce the unknown factors and can provide different models to compare. While some have used various cost comparisons for determining the benefits of applying technology, these comparisons don’t take into account other variables that are just as important.

Creating new yardsticks or metrics can benefit senior management. They can then quantify risk and benefit in applying different technologies to position their business without having to totally understand the details of the technology or service.

With the creation of new information and broadband communications moving so fast, you can’t expect the marketing executive, financial executive, manufacturing executive or non IT executive to understand everything that’s being marketed or implemented within a building.

If the information executive can convey new applications of technology using some type of quantitative yardstick approach, the non information executives can learn about the potential benefits and impact of technology by using their quantitative type analysis skills that they probably picked up in their M.B.A. classes.

They can more readily assimilate their organizational responsibilities to a more technology based business environment, which is what is critically needed across many (if not all) industries.

This quantitative yardstick approach can be argued as being a shortcut that some managers may put more credence into than they should. The positive benefits outweigh the negative because where no yardstick exists – or if someone gets something they can apply as an aid in order to get to a decision on implementing technology – it’s definitely an improvement.

Resurgence of the Building Intelligence Test

An example of creating and using a yardstick to compare downtown office buildings was first accomplished 20 years ago. The Carlini building intelligence (CBI) test was developed as a way to ensure that a client (JMB Property Management) was getting its money’s worth on a $20 million retrofit of a building back in 1986.

The whole concept was written up in various publications including the Real Estate Review and in 1988 in a chapter in the Intelligent Building Sourcebook (Prentice Hall), which was written by Johnson Controls. The chapter was entitled “Measuring a Building’s IQ” and the test reviewed all the technology and building automation within the building.

It came up with an aggregate score. That score could then be compared to surrounding buildings within the area. The test was comprehensive:

This test measures the types of information, telecommunications and building automation systems that are present in a building.

The questions are divided into 17 subcategories for measuring information systems, communication systems, office automation systems, cabling, security, energy management, heating systems, cooling systems, air handling systems, lighting, mechanical, electrical, architectural (roof and space design), fire and life safety systems as well as building operations.

If your organization is looking for new space, this a good checklist to use to compare buildings and amenities. By adding up all of the points for each question, you can get a score (or IQ) that you can compare for each building.

The test made such a thorough comparison that it changed the competition in the market. The test created a yardstick where there wasn’t any before. It provided a way to compare intelligent amenities and actually changed the marketing approach in selling space.

Based on some of the articles that have been popping up in the last couple months, there seems to be a resurgence in the need for a building IQ test.

What is the building’s IQ? How does it compare to others? Is it priced right for what it offers? Does it provide my organization with the right infrastructure to be globally competitive? These are the questions that should be thoroughly answered before packing up and moving to a new space.

Just as the old real estate adage has changed from “location, location, location” to “location, location, connectivity,” the need to have objective tools to take the guesswork out of selecting space has finally come of age.

Carlinism: Providing a yardstick where there isn’t any is a huge step in trying to figure out a market.