November 2009

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A “BACnet System” Procurement Challenge

The fallacy of equating “standard protocol” with “standard system”

Andy McMillanAndy McMillan
President and CEO
Teletrol Systems Inc.


now a part of Phillips

President
BACnet International
Contributing Editor

Introduction
I’m a bit particular about words.  I’m particular because I’m persuaded that words often convey more (or in some cases less) than their literal meaning.  And the problem is compounded by the fact that the nature of the “more” (or less) is often specific to individual listeners and their personal contexts.  Within the community of energy management and building automation professionals, the words “BACnet System” seem like a reasonable shortcut for the words “a system that utilizes the BACnet protocol.”  We ought to remember, however, that this is only a shortcut.  And when used within a broader business community, particularly purchasing, it’s a shortcut that can lead to problems.  

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What is and isn’t Standard
BACnet is a standard but devices and systems that incorporate BACnet are not.  One reason for this is that BACnet specifies how a device must communicate but it does not specify what a given device must communicate.  By way of example let us suppose we have two air handlers that both incorporate BACnet but one keeps track of fan motor runtime as a BACnet-visible value and the other does not.  They could both reasonably be called “BACnet air handlers” but they provide different functionality and potentially different value propositions.  When you consider that a simple packaged rooftop unit incorporating BACnet can have 50-100 readable values or writable control points it becomes clear that not all BACnet devices are necessarily created “equal” … and that is just at the device level.  Combine a few hundred devices and controllers in a system, add the unique attributes of the programming and system management software, stir in the added variables of system reliability, redundancy and extensibility  and it becomes clear that while BACnet is a standard, the systems incorporating BACnet are not “standard” at all.  Now, some people might say it’s just semantics.  And perhaps they’re right.  But based on some of the energy management procurement processes I have seen lately, I have to wonder if that “just semantics” is leading people down the wrong path.

Components vs Systems
For many years the BACnet community has worked hard to ensure that BACnet is a global standard and that it’s implemented consistently across multiple supplier product lines.  BACnet International devotes substantial resources to the BACnet Testing Lab (BTL) and to annual device “plugfests” to support that objective.  We regularly point out that BACnet is a global consensus standard and we trumpet the value of standards.  We talk about component interoperability and in some cases even interchangeability.  All of this is good.  Users need to understand the power of standards and how specifying systems that incorporate BACnet can add value to their building automation investments.  However, by promoting BACnet as standard and then using the shortcut term “BACnet System” we invite the unschooled to mistakenly extend the concept of “standard” from the communications protocol to the system.  That seems to lead some of them to the conclusion that all “BACnet Systems” are essentially equivalent and can be procured like commodity products … even to the point of the “reverse auction” procurement process for an energy management system I recently encountered. 

Reverse Auction Procurement
Reverse auctions have been around for more than a decade.  They evolved as a “simple” way for buyers to drive down the cost of components.  The essence of reverse auctions is that suppliers bid back and forth for a well-defined piece of business on the basis of price.  Full-featured web platforms have evolved to support this purchasing model but, even so, it has its limitations.  One of the biggest limitations is that for it to be effective, the product and its associated transaction attributes (e.g. lead time, delivery date, etc.) need to be unambiguously defined in terms that can be readily measured.  And therein is the rub.  Energy management and building automation systems are complex so fully defining all of the important attributes is a huge challenge.  Leaving any important attribute undefined results in suppliers compromising on those unspecified attributes to achieve the lowest cost and win the business.  On the surface the result might look like a good deal for the buyer.  But those compromises might well come back to haunt the buyer in the long run.

CatNet Systems Lessons Learned
At the 2009 BACnet conference in September I included a “lessons learned” list in my presentation.  It was an attempt to give people new to the BACnet community some insights based on the experience of people who have already designed and operated systems built around BACnet.  One of those “lessons learned” was that a “BACnet System” is still a system.  The BACnet standard can make system integration faster, simpler and more effective but it is not a substitute for system expertise, creativity or design rigor.  Nor does BACnet provide any assurance of product quality or system effectiveness.  These come only through knowledge and experience.  So, I encouraged owner/operators to develop a partnership approach to working with suppliers who have that knowledge and experience. 

In the early 1990’s I lived in the Detroit area and was deeply involved in the factory automation industry.  I saw first-hand what happens when complex systems procurement is driven from a “first cost” perspective without sufficient focus on supplier partnerships.  A prominent proponent of that approach was J. Ignacio Lopez de Arriortua at GM – known throughout the industry as just “Lopez.”  As stated in a business school case study years later, “he is credited with saving GM approximately $4 billion in expenses, and potentially causing irreparable harm to the long-term supplier relationships that were key to GM's future competitiveness.”  A similar risk applies in the procurement of energy management and building automation systems.  These systems will not be static.  They will need to evolve over time as regulatory, utility and corporate environments change.  Successful evolution will depend on supplier relationships that are supportive and collaborative. 

Summary
BACnet is a standard.  Systems incorporating BACnet are not standard.  Understanding the difference is important in establishing a procurement process that builds positive supplier relationships and generates maximum value in acquiring an energy management or building automation system.   

As always, the views expressed in this column are mine and do not necessarily reflect the position of BACnet International, Teletrol Systems, Philips, ASHRAE, or any other organization.  If you want to send comments to me directly, feel free to email me at andysview@arborcoast.com.

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