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Balancing Average Building Management System Costs and ROI Estimates

Image of Laura Miller
Laura Miller

Modern automated building management systems (BMSs) offer significant benefits for both building owners and tenants. They improve capabilities for monitoring, maintaining, and managing equipment to reduce energy usage and associated expenses, improve comfort, and maintain a healthy indoor environment. They not only add to the value of an asset, but can increase the income it generates. However, building management systems involve specialized installation, programming, and maintenance. This requires capital investment.

The high average cost of building management systems has traditionally confined deployment to major systems like HVAC or lighting to minimize expenses. But Internet of Things (IoT), cloud computing, and other smart technologies have decreased building management system costs significantly. Savvy building owners are capitalizing on rapidly improving technology to quickly recoup their initial investment and maximize long-term ROI.

What’s the Average Cost of a Building Management System? 

The average cost of building management system deployment ranges from $2.50 per square foot to $7 per square foot. The cost includes switches, clocks, detectors, thermostats, and other mechanisms, along with software that regulates the automated systems. Your expenses will vary depending on the technologies you choose and how you use them.

IT Costs

IT-related expenses are a key determinant of your total building management system cost. The exact numbers largely depend on whether you choose an on-premises or cloud-based system

Using on-premises servers means higher upfront costs, and ROI will take longer. A server alone costs a minimum of $3,500 and often much more. A backup system—a necessity for any on-premises server—will cost at least $2,000. You will also need a variety of other hardware, software, and licenses.

A typically cost breakdown for an on-premises system:

  • $10,000 server
  • $5,000 backup system
  • $1,500 battery to protect against power surges. 
  • $1,900 server licensing for at least two servers
  • $19,760 for Microsoft SQL licenses for 95 people (average density in 19,000 square foot office building)  at $208 each. 
  • $5,000 setup fee

This comes to a total of $43,160.


The initial cost of a cloud-based system is typically much lower than on-premises alternatives because you are not paying for hardware, backups, or licensing. Cloud-based systems also give you the flexibility to pay for only what you need, when you need it. You’re not paying for more capacity than necessary “just in case” or scrambling to increase capacity when you realize your system can’t adequately process data. You also don’t need to keep specialists on staff to maintain the system. 

The initial cost of a cloud-based system depends on the needs of your building and your tenants, and ongoing costs will vary according to your requirements. Typically, there will be a fee for labor, and you may want to hire a third-party consulting firm to ensure your system is optimized for your operation. 

An IT system with wireless access points will also cut costs. Network cabling for a 40,000 square foot building can easily run over $25,000. This same building would require approximately 25 wireless access points, or one for every 1600 square feet. With an average cost of $350 per installed access point and estimated $240 for labor, the total price of a wireless system is approximately $14,750—just over half what a wired system would cost. 

Cost of IoT Sensors and Controls

The cost of IoT sensors and controls is typically between $5,000 and $50,000. This works out to as little as 75 cents per square foot, depending on the type of system. Wireless sensors reduce deployment costs by approximately 30% compared to fully wired installations. 

IoT paired with advanced analytics has tremendous ROI potential. A smart BMS reduces energy use by an average of 10-25% in a mid-sized building, and a cutting-edge analytics platform can increase savings even further. And better energy efficiency is just the start. From streamlining maintenance to improving occupant experiences to commanding higher lease rates, building owners who invest in analytics-based systems are recouping costs in 6-24 months. 

Partnering with the right vendors optimizes the benefits and ROI of smart technologies. Unifying building systems, adding interoperable IoT technology, and integrating analytics unleashes the full potential of your building, but only when it’s done in the right way. A smart buildings expert will create a well-architected system with the sensors, control, and automation you need today and flexibility for the future.

Servicing & Maintenance Costs

Systems are not infallible, even if largely automated. Your BMS is an asset in its own right, and keeping it running at peak performance will help you make the most of your investment. Maintenance is therefore an important part of your total building management system cost. But it also creates opportunities for savings

A well-maintained system means greater efficiency, lower long-term costs, less downtime, and a longer useful life. Bringing in a service provider to regularly maintain your BMS is a wise investment that lowers your costs over time. 

Reduce Building Management System Costs by Maximizing ROI

Building management system costs should always be compared to the value they offer. Here are just a few ideas to maximize ROI: 

  • Use initial and ongoing commissioning to continually optimize operations.
  • Integrate and optimize the most energy-hungry systems, such as HVAC and lighting, to reduce energy consumption. 
  • Take advantage of national, regional, state, or local programs that subsidize green and energy-efficient buildings to defray the cost of installation. 
  • Add analytics software with machine learning capabilities to your BMS to automatically regulate operations and continuously refine adjustments.
  • Use a single platform with all workflow tools in one place to identify and resolve problems more efficiently and reduce maintenance expenses. 

An experienced contractor will work with you to identify cost-saving opportunities and give you a clear picture of what you can expect from your ROI. 

Buildings IOT offers state-of-the-art solutions that help you get the most out of your building management system. Contact our team of experts to learn more about what we can do for you.

 

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