February 17, 2013 by ramidaniel
By Rami Daniel, MSc in Management Consulting 3 student
Green buildings, smart buildings, green cities, smart cities and going green seems to be one of the main topics within the construction and related industries in most developed countries. Clients need and demand buildings and spaces that are ‘SMART’ and have high energy savings to lower operating costs. Whether software, hardware, material or simply design, stakeholders in this industry face high competition and difficulty in making business profitable, requiring the need for consultants to dive ideeper into this field.
With increasing competition, many SME’s and startups face difficulties staying afloat and finding business models and revenue streams to ensure profitability. Consultants will have to find new strategies and innovative models to make these businesses successful. How can this work with so many small sized players in this industry, each trying to make it on their own while looming giants from China and Southeast Asia prepare to make their attack?
Looking at clusters from a different angle can offer a model for a solution. Companies within the green building or smart building clusters are in competition with one another. Grouping companies in an ‘assembly line’ model within this cluster can allow companies to utilize their strengths to the betterment of this grouping. A company specialized in software, a company specialized in hardware, a company specialized in desig,n and a company specialized in execution, can be one coalition.
Viewed from an ‘assembly line’ perspective, each company in turn would input their scope with coordination with the others to provide the final solution to the customer. The pool of resources increases the level of knowledge of the group, increases the level of communication and coordination, and more importantly allows for the expansion of this group through the pooling of networks from the individual companies. The value added to the customer is in the ease of obtaining a full packaged solution instead of the individual parts. As a result, a client wishing to retrofit an existing building to increase energy efficiency of the building, will have a single interface in which to deal with. Software, design, sensors, wires, and manpower are from a single source, from the client’s point of view, making the engagement less of a hassle then dealing with the individual parts. As for the companies themselves, the revenue stream could be based on a percentage of the overall project price relative to their input on the project allowing for a company that inputs higher costing resources a share equal to their input.
With the renewable energy and sustainability markets witnessing tremendous growth around the world, the potential for collaboration between stakeholders in this industry and consultants to produce innovative strategies and business models is immense. Providing affordable solutions while remaining competitive to enable the movement towards a cleaner environment, higher energy and cost savings, and setting the path for the generations to come is one of the most attractive fields for a consultant.