Last week’s policy focus on Education Industry Construction Spend Rate is available at this link: Safer. Simpler. Lower Cost. Longer-Lasting .
June 12, 2015
This week we drill down into the meaning of the term: avoided cost opportunity; an understanding of which is central our transformation agenda for the education facilities industry’s mastery of business and technical standards setting to manage regulatory risk.
Many facility professionals are not aware that @StandardsUMich has delivered to the $3oo billion education facilities market,
a) relaxed selected prescriptive requirements in several technical standards suites, and,
b) changed selected prescriptive requirements into performance criteria. These changes to codes and standards are worth billions – $2 to $3 billion in prospective annual cost reduction to the industry overall.
While the concept of avoided cost opportunity may not be widely understood it has tangible value because we used our own resources to persuade ANSI accredited technical committees to our point of view and reduced our own #TotalCostofOwnership. The concept must have some value because, on the other side of the ledger, our achievements are booked as advocacy “losses” by opposing stakeholders. Opposing stakeholders will be selling us fewer rooftop temperature sensors, or billing for fewer fire pump tests; for example.
There are many examples of avoided cost opportunity described in weekly teleconferences and linked on our videoblog. (Here is a link to one example from the ASHRAE suite; there are others) We will focus on a few of the advocacy achievements in the electrical power disciplines and how they translate into meaningful specifics on new building construction bid tabs, utility budgets and running cost. These specifics are now available to advance our own #TotalCostofOwnership goals and our industry’s leaders should be driving them into the business culture of our industry. That is easier said than done, however. The classic technology adoption curve is a fair enough model to explain why so many in our industry fail to deploy these avoided cost opportunities.
We will examine the organizational pathologies that are prohibiting “upworthy” ideas from finding their way into consensus documents. For example:
- Conformity assessment professionals, who typically observe a span of designs and installations, and have a great deal of cross-system experience, may not be inclined or be able to pro-offer the wisdom of their experience. They feel that assertive advocacy on behalf of the final fiduciary is outside the realm of their responsibility — even though they may be employed by the final fiduciary, as they are in so many large research universities. They feel their job is to inspect the installation; end of story.
- Design professionals, who typically have to reconcile the competing requirements of safety and economy before construction documents are let for bid, are on the receiving end of prohibitions against charging billable hours anything beyond the project at hand; much less to marking up draft standards and traveling to ANSI technical committee meetings for 6 to 12 years.
- The divergent social and political atmospherics between policy-makers and technical experts. Policy makers lack the knowledge to make technical judgments. Technical professionals who possess this knowledge have little influence in regulatory circles. Each side blames the other for inaccessibility. Both groups work hard. Both take decades to really know what they’re doing–and both are convinced that they do the important work while the other group debates the details.
- The business models of the 25-odd trade associations servicing the education facilities indusry. As we have described in other presentations, they are technically and economically unable to risk the support of their sponsors, and/or sustain effort through multiple economic cycles.
Thus, there is no shortage of barriers to effective technical standards advocacy. Presenting data-driven concepts to standards-development committees is hard work, but the organization that has mastered the drudgery is in the best position to innovate. An effective innovation platform will endure however, if we consistently get our numbers right. There is no getting our numbers right unless we continually put a bright light on how we arrived at them and open up our estimates to price and cost discovery.
You may join the call toll-free using your computer microphone and speakers:
https://global.gotomeeting.com/join/904211277
All visual activity is available at the link shown above. If you do not have a computer with a speaker or microphone you may dial in for both speaking and hearing functions using these numbers:
Dial 1 877 568 4106 | Access Code: 904-211-277
Audio PIN: Shown after joining the meeting | Meeting ID: 904-211-277
Contacts: Mike Anthony, Christine Fischer, Jack Janveja
