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Building connections: the Internet of Things and construction

There is a lot of talk about the “Internet of Things”, or IoT. But what does that actually mean – and what does that mean for the construction industry?

The Internet of Things is the term used to describe the networks of objects and systems with embedded sensors, software and network connectivity that allow those objects to collect data and share it. The purpose of all of these sensors is to improve efficiency, productivity, and the user experience – reducing delays and costs along the way.

During the construction process:

  • sensors in machinery can monitor its maintenance requirements, reducing delays from equipment failures, and maximising the output: investment ratio by minimising downtime;
  • intelligent tools with sensors can check tightened fasteners against torque specs;
  • when the Leadenhall Building was built using extensive off-site manufacturing, RFID data tags were attached to components to track them through manufacture, delivery and installation; and
  • wearable tech, e.g. smart watches, can be worn by workers to log construction hours, potentially reducing the risk of accidents due to fatigue and also speeding up the payment application process.

Buildings can be made into smart buildings by installing IoT devices and sensors to operate throughout its lifetime. IoT devices can monitor operating conditions, usage, and the physical state of the building. Sensors can monitor and build predictive models of e.g.:

  • energy usage
  • temperature trends
  • movement of people

The data can be used both to improve future projects and to assess and improve the performance of the building and the experience of the building’s inhabitants.

With the data from the IoT, facilities can be managed proactively, rather than reactively. Smart products can self-analyse data and decide when a system needs servicing, so the facilities managers’ role becomes more executive. For examples, the system may flag when a service is required, but the facilities manager decides when to implement that recommendations, after consultation with the building’s users. The Internet of Things may provide Artificial Intelligence, but the facilities manager has to provide the emotional intelligence.

The facilities management role is often outsourced, which can lead to individuals working alone and in unfamiliar locations.  Lone worker technology, including GPS, RFID and satellite devices, messaging, and alarm systems can help FM companies keep track of their workers and ensure their safety.

There are, however, very real challenges in implementing and engaging with the Internet of Things, whether in a smart building or otherwise:

  • The design of a building is carried out long before it is built and enters into use, so the designers need to consider future-proofing their design, to ensure the technology can be upgraded as needed with minimal disruption to the building and its inhabitants. Factoring this into the design will cost more – as will designing a smart building in the first case – but there is also a reduction in future operating and maintenance costs. In the ratio between construction cost, whole-life FM cost and whole-life occupier value at 1:3:30, per Richard Saxon and the Constructing Excellence report “Be Valuable”, the design portion is about 0.1 of original Capex.  Underinvesting in design is a false economy when it is the principal means of optimising value throughout the lifecycle of a building.
  • Where smart products in the IoT have their own proprietary systems, we need to consider how those systems can interact, and once they do, there are management, data and control issues between both the vendors of the different products, and the product owners, who may be unwilling to agree to their data being uploaded, even though that would improve the analysis carried out by the system for all its users.
  • Relatedly, who has the right to use and access the information generated by smart products, and how do vendors charge for that? For most clients, whatever the industry, data is key and of significant value. There are a number of possible models:
  • Pay per use – the product and data are provided under a service agreement, not a contract for purchase. The vendor charges for the product based on use and the manufacturer/service provider gets access to the data generated. Within this arrangement, the service agreement often provides that the data belongs to the user, even though it can be accessed by the service provider, and the service provider has to return the data at the end of the agreement.
  • Data market – if you purchase a product the data it generates is yours, and you can sell that data on (whether to manufacturer, supplier or third parties).
  • Open data – when it’s in the public interest (e.g. for driverless cars) for device owners, manufacturers and public agencies all to have access to data, albeit with different use conditions.
  • The other point that is always of huge concern is the backing up of the data, the security of that data and the responsibility for loss. Most contracts try to exclude loss of data as a recoverable head of loss, but that is often challenged where the product in question has, as one of its major offerings, the collation and use of data.


The Internet of Things is the term used to describe the networks of objects and systems with embedded sensors, software and network connectivity that allow those objects to collect data and share it.

It’s almost easier to describe what the Internet of Things can’t be used for than what it can – but as with all things, the underlying issues have to be considered carefully, particularly when there are multiple parties involved.


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This information is for guidance purposes only and should not be regarded as a substitute for taking legal advice. Please refer to the full General Notices on our website.

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