The Buyer's Guide to Fault Detection & Diagnostics (FDD)

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The Buyer's Guide to Fault Detection & Diagnostics (FDD)

Table of Contents

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Welcome to the Nexus Labs Buyer Guide for fault detection and diagnostics (FDD) software. We understand that as a Facility Manager, Energy Manager, Technology Manager, or Sustainability Manager, you're constantly looking for innovative solutions to improve your organization's operations and sustainability efforts.

After 20+ years of gaining maturity as a solution, FDD has earned the right to be part of your tech stack. Here’s why: Imagine having a room full of engineers that don't sleep. Engineers that don't take bathroom breaks. Engineers that are constantly analyzing your building systems and providing real-time insights on where your highest priority issues are and how to fix them, allowing you to get ahead of potential problems. That's exactly what FDD does for your operations staff.

Having fault detection and diagnostics running is like having a team of tireless experts monitoring your systems—such as heating, ventilation, and air conditioning (HVAC) or lighting systems—ensuring their optimal performance and energy efficiency. FDD acts as your building's personal health tracker, just like a Fitbit or any smartwatch. Many of us have experienced eye-opening revelations from our Fitbits, discovering that we're not getting enough sleep, exercising too little, or making poor dietary choices.

Similarly, our doctors run many diagnostic tests (preventive checkups) like blood pressure, reflex tests, and blood tests. Then, anything that is “normal” doesn’t need to be investigated further, but anything “high or low” might suggest an issue to investigate. Sometimes confirmation of a disorder or disease comes through multiple diagnostic tests showing abnormal results that point to the same root cause. In this same way, FDD prompts you when something is amiss or when an opportunity for improvement arises.

In this guide, we'll walk you through the most important things you need to know about fault detection and diagnostics technology. But don't worry, you don't need to be an expert to make informed buying decisions. We'll break down the essentials, providing you with a solid foundation to navigate this exciting marketplace.

We'll start with a technology overview, ensuring that you grasp the fundamental concepts and functionalities of FDD. Then, we'll explore various applications of this technology across different building types and use cases, showcasing its versatility and potential impact. As you embark on the journey of evaluating this technology, we'll guide you through the key buying considerations, sharing anecdotes and details specific to the fault detection and diagnostics category.

But it doesn't stop there. We'll also delve into deployment considerations, offering insights on best practices for installation, training, and ongoing operation. We understand that implementing a new technology requires careful planning, internal buy-in, budgeting, and purchasing. Rest assured, we'll equip you with the knowledge needed to navigate these aspects effectively.

Furthermore, we'll provide you with a checklist of lessons learned from peers who have already implemented fault detection and diagnostics technology. This collection of real-world experiences will be a valuable resource, allowing you to gain insights from others' successes and challenges.

So, if you're ready to unlock the full potential of your building, optimize its performance, and align it with your organization's objectives, let's dive into the world of FDD. Get ready to embrace a technology that acts as your building's tireless performance advocate, ensuring it operates at its best and contributes to a sustainable future.

Thank you

This Buyer Guide’s to FDD was written by James Dice, Founder and CEO of Nexus Labs, with editing and content provided by Aaron Lapsley, Principal of System 2 Consulting.

Nexus Labs would like to thank our partners, creators, and buyer community for contributing to this guide. Thank you to Altura Associates, Bueno Systems, Buildings IOT, Clockworks Analytics, Facilio, NYSERDA, Tom Balme, Leslie Beu, Nick Dumoulin, and Devan Tracy.

Technology Overview

First, let’s get acquainted with the technology. Fault Detection and Diagnostics (FDD) software detects equipment failures, allowing for data-driven maintenance practices that reduce costly equipment downtime, limit unnecessary repairs, extend equipment lifetime, and reduce occupant complaints. Importantly, evidence from implementations in the field shows that many real-world failures found by FDD were previously unidentified, often for extended periods.

This section will walk you through the technical basics of FDD software so that you can understand what it is, how it works, and the types of vendors in the marketplace.

Key Terminology  

In discussion with FDD vendors, you might need a decoder ring to understand the technical jargon. Have no fear… here are the top 10 nerdy FDD terms to arm yourself with:

  1. FDD algorithms or rules: Logic / code that automatically identify operational faults and root causes using building operational data from building control systems and sensors
  2. Faults or Insights: A state or flag that is triggered when the FDD software detects that equipment is operating outside of desired specifications or conditions
  3. Expert systems: A type of AI used by rules-based FDD algorithms that uses “if-then” statements, just like a domain expert would, for diagnosis and automated decision making using decision trees
  4. Anomaly detection: A type of machine learning driven FDD algorithm that analyzes historical data to create a predictive model that alerts operators of any performance abnormalities
  5. Root cause analysis (RCA): discovers the core cause(s) of the Fault or Insight (not just symptoms) to recommend the optimal long-term solution and prevent the problem from occurring again
  6. Building automation system (BAS): computer-based software that provides basic automation, control, and data collection  for HVAC, mechanical, and electrical systems
  7. BAS alarms: Not to be confused with Faults, alarms use the data available in the local BAS to perform very simple math, often generating large amounts of noise
  1. Integration: The process by which the FDD provider collects, and typically automates collection of, data from building automation systems and other sensors and control systems
  2. Gateway: A software component (which may or may not require additional hardware) that converts data from one protocol and makes it available to devices that support a different protocol. Gateways often are used in smart building tech stacks to send messages to field devices, extract data values, and push data to the software provider’s cloud
  3. Ontology-driven data modeling: The relationships, metadata, constraints, rules, and logic that have been built into the FDD system to analyze thousands of data points being streamed out of the BAS or other building system

What is FDD?

Fault detection and diagnostics software is an Application Layer technology that collects data from your building systems (HVAC, metering, lighting, etc.) and provides data-driven insights through ontology-driven data modeling and applying FDD algorithms.

Once data is integrated and the FDD configured, the software identifies any potential issues with operating systems and equipment and in some cases provides actionable recommendations to resolve the root cause of the abnormality. FDD systems also include a user interface (UI) for data visualization and metrics to prioritize faults for facility managers to take action on.

As shown in the graphic above, the typical FDD software stack includes several layers that sit on top of the building systems and usually integrate with the FDD provider’s cloud environment.

  1. Integration layer—composed of gateways or virtual nodes that capture real-time data from various building systems. (Can be provided separately as part of a separate data layer)
  2. Data layer—involves data cleansing, normalization, modeling, and filtering to ensure data accuracy and quality. (Can be provided separately as part of a separate data layer)
  3. Analytics layer—utilizes sophisticated algorithms to analyze the collected data and detect anomalies or faults
  4. Visualization and reporting layer—presents the diagnostics, insights, and recommendations in a user-friendly format for interpretation and decision-making

With FDD software deployed, the user can log into the application and find a prioritized list of faults in the operation of their systems.

According to Aaron Lapsley, principal at System 2 Consulting, the best FDD products are more filter and less noise, especially when compared to simple BAS alarms. Modern buildings have thousands of data points that are updated every few seconds to minutes.

From that stream of data the analytics layer might detect hundreds of potential faults. The FDD software must then remove erroneous or duplicate faults and help prioritize the remaining faults until only the most actionable insights remain. These then become specific tasks for resolution.

To make this real for you, let’s check out the typical faults you will find with FDD. Devan Tracy, leader of Lockheed Martin’s FDD program, provides her top 3 examples in the slide below: Simultaneous Heating & Cooling, Unnecessary Valve Cycling, and Physically Blocked Ductwork.

While every building is a unique snowflake, the types of faults that occur often share common patterns. The most common faults occur because of failed components, faulty dampers and valves, and misprogrammed controllers. Operations teams can wait until these issues cause problems, they can attempt to find them using the BAS, or they can use FDD to proactively find them, prioritize them, and track their resolution in real time.

Marketplace Overview

The Nexus Vendor Landscape has over 50 companies that provide FDD as a capability.

To simplify the overwhelming process of narrowing down your options, we have three questions that can help you. After you read the rest of this guide, you’ll be equipped with the insight to answer them for yourself.

First: which type of FDD vendor are you looking for? Today, there are three types of FDD vendors in the marketplace:

  1. FDD Software as a Service (SaaS)—These vendors focus on providing FDD software, and customer support for that product, as their primary solution.
  2. FDD as a feature—These vendors provide FDD as just one feature of a the building automation system or integration platform. FDD is not their primary focus.
  3. Tool for service provider—Third-party service providers wrap FDD into their services, such as commissioning or monitoring-based commissioning or maintenance.

Next, which type of system are you looking to optimize? Most vendors focus on one type of building system: HVAC. Others include metering and, in limited cases, lighting control systems. A select few vendors have experience optimizing any type of building system.

Finally, do you want to outsource the process of narrowing down the marketplace to Nexus Labs? Our current list of trusted partners with vetted FDD solutions is:

Check out their Partner pages to get in contact with them.


When considering the application of fault detection and diagnostics (FDD) technology in your portfolio, it's important to recognize its versatility and potential benefits across various building types and departments within the organization.

FDD can bring value to many types of buildings, including commercial offices, corporate offices, grocery stores, retail chains, retail malls, healthcare facilities, entertainment venues, hotels, cultivation facilities, multi-family residences, schools, and higher education institutions. In fact, every type of building with digital control systems can benefit from monitoring performance and seeking continuous improvements.

Assessing where to apply FDD starts with the "why."

The Why: Benefits of FDD

Why should buyers consider implementing FDD in their buildings? How does it help achieve the outcomes they care about?

Here are the five main ways:

⚙️ More Efficient Maintenance Operations: By leveraging FDD, maintenance teams can prioritize their work effectively and achieve more with limited resources. Proactive issue detection, prioritization algorithms, and real-time insights enable timely interventions, minimizing downtime and reducing the number of hot/cold calls from occupants.

🫁 Better Occupant Experience: FDD's ability to identify issues in building system performance allows for timely repairs, tuning and adjustments. This ensures occupants enjoy a comfortable, healthy, and productive environment, improving their overall experience.

🌿 Improve Sustainability: FDD helps you uncover energy-saving opportunities, quantify their value, and prioritize their implementation. It enables you to track the progress of sustainability initiatives, keeping your organization on track with its environmental goals.

💰 Reduced Capital and Operational Expenses: FDD empowers organizations to make data-driven decisions for managing their operational and capital budgets. By identifying repeat offenders, opportunities for optimization, prioritizing issues based on criticality, and identifying root causes of problems, FDD helps save money and allocate resources more efficiently. FDD also shines during the warranty period of capital projects, whether retrofit or new construction. Commissioning agents can apply FDD to help owners ensure performance and save money from day one with new systems.

🔧 Workforce Development & Resiliency: As the workforce evolves and experienced personnel retire, FDD becomes an increasingly valuable asset. By leveraging software-driven analysis and automation, and recording a history of building performance, operations & maintenance organizations can bridge the gap, effectively understanding and managing building systems and ensuring operational resilience.

The Who: Who Will Use The Software?

Once you grasp the “Why”, you should next consider the “Who”. Despite all the potential benefits above, buyers must understand that FDD doesn’t solve problems independently.

Obtaining the benefits of FDD ultimately requires human action. More specifically, it requires regular use by a well-resourced team to fully convert data-driven insights to action to verified results. This is not easy but is vital for the FDD program's success.

There are two primary user groups of FDD software: internal user groups and third-party service providers.

Internal user groups include the Operations & Maintenance staff using FDD on-site or in remote operations centers. These may include roles such as Facility Managers, Building Operators, or Technicians. Their regular engagement with the software allows them to proactively identify issues, monitor performance, and take necessary actions to optimize the building's systems.

Additionally, the energy management and sustainability staff within an organization can utilize FDD software to track energy usage, identify energy-saving opportunities, and support sustainability initiatives. Their involvement ensures that energy performance goals are met and the organization remains aligned with its environmental objectives.

On the other hand, external or third-party service providers can also use FDD software. This includes commissioning agents, monitoring-based commissioning agents, and mechanical/controls service contractors. These providers can leverage FDD as a tool to offer specialized services to building owners and operators. They can use the software to monitor system performance, identify faults or inefficiencies, and recommend improvements to optimize building operations.

When considering the best way to implement FDD in your organization, it's crucial to consider whether it should be utilized as an internal tool for your staff, paired with a skilled service provider, or both. Evaluating your organization's resources, capabilities, and objectives will help determine the most effective approach. Some organizations may have the expertise and capacity to manage FDD internally, while others may benefit from partnering with a service provider who can offer specialized knowledge and support to drive action and maximize the benefits of FDD.

In the next section, we will explore how different user groups incorporate FDD software into their workflows to achieve desired outcomes and effectively leverage its capabilities.

The How: How Will They Use It?

Now it's time to narrow it down to exact use cases. How will your internal and/or external teams use the software? How will they drive action? Answering these questions requires thinking through how the user organization currently operates and how it will operate with fault detection and diagnostics (FDD) software.

For instance, let's consider the role of an energy manager who is currently responsible for identifying, developing, and tracking energy efficiency projects. With FDD, the energy manager can automate some of the engineering analysis, continuously track performance 24/7/365, and proactively identify any performance drift that may occur.

To help buyers spark ideas and determine which potential use cases make sense for their organization, Nexus Labs offers a comprehensive Use Case Database. This resource outlines at least nine ways in which different users can enhance their daily workflows and operations by leveraging FDD.

Exploring the database can provide valuable insights into the diverse range of possibilities and applications for FDD within various contexts.

Designing use cases is crucial for building a compelling business case to procure FDD. Each use case demonstrates how the software can address specific pain points, improve operational efficiency, and deliver tangible benefits.

The use case development process helps buyers envision how FDD will integrate into their existing workflows and drive action across their organization, which in turn builds understanding of the potential return on investment, cost savings, and the strategic value that FDD can bring to your organization. We’ll explore that further in the section on Buying Considerations.

The Where: Deciding which buildings to use FDD  

Now we’ve covered the Why, the Who, and the How. So how do you decide where to apply it in your organization? The Nexus Pro Buyer Community recommends asking yourself these questions:

🏢 Is the Building Complex? FDD excels in more complex facilities such as healthcare institutions, laboratories, high-performance offices, commercial spaces, higher education campuses, and mixed-use buildings. These environments often have intricate systems and demanding operational requirements, making FDD's real-time insights and proactive issue identification particularly valuable.

🗺️ Is There a Portfolio of Buildings? If you manage a portfolio of buildings, especially if they are geographically dispersed, FDD becomes an indispensable tool. It allows you to centrally monitor and analyze the performance of multiple buildings, providing a comprehensive view of their health and identifying optimization opportunities across the portfolio.

📊 Is There Sufficient and Available Data? For FDD to operate effectively, it requires data to analyze. This includes data from various sources such as HVAC control systems, metering devices, lighting controls, and possibly other systems. Buildings that already have comprehensive data collection infrastructure in place are prime candidates for FDD implementation, as it can leverage the available data to provide automated analysis and actionable insights. At a minimum a target building should have a digital control system that can be integrated via gateway.

⚡️ Is Energy or Carbon Performance Poor? Assess energy or carbon benchmarking to determine if the building's performance deviates significantly from peers. Similarly, buildings with many hot/cold complaints from occupants tend to be strong targets Once you identify poor performance, FDD can be a valuable tool for deeper analysis and improvement.

By considering these essential questions, buyers can prioritize their portfolio and make informed decisions about applying FDD to maximize its impact and achieve desired outcomes in their buildings.

The Program Mindset

The Nexus Labs Buyer Community unanimously recommends rolling out fault detection and diagnostics (FDD) as an ongoing program, rather than a one-time project. This is essential for maximizing its effectiveness and achieving long-term benefits.

According to Aaron Lapsley of System 2 Consulting, long-term FDD programs can be broken down into four distinct phases:

  • Phase 0: Concept to Commitment—This initial phase involves developing the program strategy, building a compelling business case, securing the necessary budget, and completing the procurement process.
  • Phase 1: Test then Invest—Although it's ideally not referred to as a pilot (to avoid the pilot trap!), this phase serves a similar purpose. It involves implementing FDD in a small group of favorable buildings or systems to validate its effectiveness and gather valuable insights and experience operating with the new capabilities
  • Phase 2: Expand to High-ROI Buildings—In this phase, FDD is expanded to buildings with a high potential for operational benefits. These buildings are identified based on factors such as low implementation costs and significant opportunities for improvement (e.g., high energy use intensity, tenant complaints, known issues, or overburdened operating teams).
  • Phase 3: Ready and Expand to Remaining Buildings—This phase involves rolling out FDD to the remaining buildings or systems within the program's scope. It is important to note that the program's scope may evolve as new information is uncovered. Upgrades to underlying systems, such as controls and meters, may also be necessary to prepare the buildings for FDD. It's crucial to account for these projects separately.

Figuring out the phasing strategy in advance is essential for the program's success. For example, it's advisable not to select challenging and low-ROI buildings for Phase 1. Demonstrating success and building momentum by starting with favorable buildings will increase the program's chances of success and ultimately shape the subsequent phases.

It's important to invest time and effort in Phase 0, as it sets the foundation for the program. Developing a clear plan with defined phasing, success metrics, costs, go/no-go gates, and other relevant details is crucial for gaining approval and securing support from budget holders.

Finally, as we’ve discussed in this section, it's vital to plan for change management and focus on changing people's behavior to fully leverage the new capabilities enabled by FDD. Simply generating valuable insights is not enough; the critical path to success is ensuring people take action to remediate root causes.

Buying Considerations

This section highlights the crucial aspects of the fault detection and diagnostics (FDD) software procurement process. We’ll cover key considerations that must be carefully evaluated to ensure the selected solution aligns with the organization's goals and objectives.

From assembling the right team to vendor selection and estimating the business case, this section guides the key considerations that prospective buyers should consider to make an informed decision and set the foundation for a successful FDD implementation.

The Buying Team: Who Should Be Involved

When assembling the team for the buying process, it's mission-critical to involve key stakeholders from different departments across the organization. Here's a summary of the team members that should be included.

  1. Information Technology: This team member is vital in addressing networking, firewall, and digital infrastructure considerations. They are responsible for ensuring the smooth integration of the FDD system into the organization's IT ecosystem and mitigating any associated risks.
  1. Engineering and Operations: These team members are instrumental in implementing and executing the FDD workflow. They possess in-depth knowledge of building operations, workflows, and task management. Their understanding of how FDD can impact and improve existing processes is crucial. Additionally, they are key contributors to change management efforts, ensuring the successful adoption and utilization of FDD within the organization.
  1. Sustainability: The sustainability team provides valuable insights into building-level and portfolio-wide strategies for leveraging FDD to enhance energy efficiency and sustainability goals. They can offer guidance on incorporating FDD into broader sustainability initiatives and aligning it with organizational objectives. FDD programs are often championed by sustainability teams.
  1. End Users: The involvement of end users is essential to evaluate the right FDD solution. While executive-level facility representatives may provide high-level input, it's crucial to solicit feedback from end users who are directly involved in the day-to-day operations of the buildings. Their input ensures that the selected FDD solution aligns with their specific needs and can effectively be integrated into their workflows to drive action. Keep in mind that end users may come from one or more stakeholder groups described here and from multiple levels of the buyer organization.
  1. Other Vendors: In some cases, facilities may have existing local vendors, such as outsourced facility management (FM) providers, engineering consultants, service contractors, or commissioning agents (CxAs), who could benefit from FDD and data analytics. Involving these vendors can help align FDD capabilities with their workflows and potentially enhance their service offerings. This will likely vary from building to building within a portfolio.
  1. Procurement: The organization's procurement representatives should be involved to ensure that the buying process adheres to the organization's procurement procedures and guidelines. Their expertise ensures a smooth procurement process and effective contract negotiations with the selected vendor.
  1. CFO / Business Managers: Involving the CFO or business managers (e.g. building asset managers or operations leaders) is crucial to understanding the potential costs and return on investment that FDD can offer. They can help assess current operational risks, endorse the program, and evaluate the financial impact of implementing FDD.

By assembling a well-rounded team with representation from these key areas, organizations can ensure comprehensive evaluation, the proper surfacing of obstacles, and selecting the most suitable FDD solution that aligns with their goals and requirements. Vetting and Selecting VendorsWhile the marketplace for fault detection and diagnostics (FDD) software may seem overwhelming, this section guides narrowing down the options to a few vetted vendors with low risk. Each real estate organization will have its own specific requirements, so this information should serve as a starting point in the vetting and selection process. First, let’s consider the key evaluation metrics that apply to all application layer technologies:

  • Speed to value: Look for vendors that offer a quick and efficient implementation process, minimizing disruptions to building operations. Consider vendors with a track record of successful implementations and tools to streamline deployment.
  • Business health/longevity: Choose established companies with a proven history of success and longevity. Consider the experience and expertise of the vendor's staff in FDD technology and its applications.
  • Proven to drive action: Seek vendors who can demonstrate the impact of driving action and completing tasks that are recommended by the software. It's not enough to identify issues; vendors should provide accurate root-cause diagnostics that drive corrective action. The user interface should be functional and intuitive so that different user types can get up to speed quickly and maximize the software’s capabilities.
  • Scalability: Buyers should try to forecast whether they expect the need for FDD across their portfolio to grow. If you’re managing a large portfolio, choose a vendor that can support an enterprise software solution and integrate FDD with other enterprise applications.
  • Interoperability: Assess the ability of FDD technology to integrate with existing building automation systems and other relevant technologies. Look for vendors experienced in working with various systems and protocols, ensuring seamless integration. An open API and developer portal that enables easy data exchange is essential for allowing the data, information model, and insights in the FDD application to be useful elsewhere.
  • Support and services: Recognize the ongoing management required to maintain the accuracy and value of FDD. Evaluate the level of support and services vendors offer, including comprehensive training, technical support, and maintenance services. Consider the responsiveness and availability of the vendor's support team. Also, where desired, consider the vendor’s track record of providing managed services for ongoing FDD operations.
  • Cybersecurity: Assess the cybersecurity features and protocols provided by vendors. Prioritize solutions that prioritize data protection and system security. Evaluate compliance with relevant standards and regulations, as well as the vendor's experience in addressing cybersecurity threats and vulnerabilities.

By considering these evaluation metrics, buyers can narrow down their choices and select vendors that best align with their specific needs and requirements.Next, let’s consider evaluation metrics that are specific to FDD application vendors. The Nexus Labs team has evaluated dozens of FDD products; the best tools minimize the effort required to drive results. Here are the attributes that separate the best from the rest:

  • Accurate, automated analysis: FDD algorithms should be scalable, repeatable, and maintainable across a portfolio of diverse systems. They should be able to accommodate the complexity of imperfect building data. The use of standard ontology helps enhance the accuracy of the analysis by leveraging a structured and standardized representation of knowledge. They should dynamically incorporate the best available information for analyses and checks, ensuring reliable results. Additionally, the algorithms should effectively filter out false positive faults and duplicates where possible, presenting the building operator with high-quality opportunities for improvement.
  • Automated diagnosis: FDD software should perform in-depth analyses to identify one or more root causes of problems in building systems. It should provide actionable insights that enable the operator to take corrective action. Moreover, the software should offer explanations to the user, outlining how the algorithms arrived at their conclusions. This transparency helps build confidence in the decision-making process.
  • Automated prioritization: FDD software should consider the impacts of identified faults, including their cost, energy efficiency, maintenance requirements, and indoor environmental quality (IEQ) implications. The software should support measurement and verification (M&V) based on standard engineering practices, allowing transparent demonstration of the achieved improvements.

Leslie Beu, of LONG Technologies and a member of the Nexus Labs Buyer Community, shared how LONG incorporated these evaluation metrics when they chose an FDD vendor: “First, we compared 9 companies’ combined 27 “analytics” tools including FDD, Engineering, Sustainability, and EIS products.  Then we ranked them on initial cost, ongoing cost, effort/labor cost internally to set it up and continue to provide proper service to clients, long-term support from the company/provider.

Once we had the top 5, we evaluated further on the accuracy, the number of nuisance (false positive) faults, and cost savings. Finally, we implemented several of those on six different buildings (including multiple different tools on some individual buildings) to test them and evaluate the effort needed to provide enhanced service using those tools”
Making the Business Case: The Costs of FDDWhen considering the deployment of FDD software, it is important to evaluate both direct and indirect costs associated with implementation and ongoing usage to accurately estimate the financial investment required for maximizing the benefits of this technology.There is unfortunately no standardized way to charge for FDD services in the market. This lack of uniformity makes it challenging for buyers to compare different vendors and offerings on an apples-to-apples basis. Ideally, vendors would work towards establishing clearer pricing models and standardized metrics to facilitate better comparisons. However, at present, buyers are required to put in the effort to evaluate and understand the specific cost components and pricing structures offered by each vendor, ensuring they conduct thorough analysis to make informed decisions.
Direct costs associated with deploying FDD can be categorized into two main areas: implementation/setup costs and software costs.Implementation/Setup Cost: This includes the initial setup and integration of the FDD solution with the building systems. The cost can be provided by the FDD vendor or a third-party consultant. It typically involves an upfront fixed fee per building and covers activities such as data integration, configuration of the software application, user training, and handover. Depending on the automation system vendor and integration methodology, there may be additional costs for facilitating systems integration. The one-time setup fees are influenced by building size and the number and type of systems & equipment being  integrated.💰Budget Cost Range: $0.03 - $0.10 per square foot or $0.32 - $1.08 per square meter
Software Cost: The software cost is usually a recurring fee, often referred to as Software-as-a-Service (SaaS), based on the size of the implementation, the number of users, or usage metrics. This can include equipment count, data point count, licenses for users, or the number of queries/API calls per month. While most FDD products are pure SaaS, some vendors may charge both upfront fixed fees for licenses and recurring fees. The SaaS fees are influenced by the size of the building and the number and type of systems & equipment being integrated.
💰Budget Cost Range: $0.02 - $0.12 per square foot per year or $0.22 - $1.29 per square meter
In addition to the direct costs, there are other indirect costs to consider during FDD deployment:

  1. Integration of Building Systems: There may be costs associated with tweaking or decoding building automation systems to ensure smooth integration. These are typically one-time, up-front costs.
  2. Hardware Cost: Some FDD products or integration situations may require additional hardware, which can vary in terms of purchase, lease, or subscription models. Hardware requirements should be considered in vendor selection and technical architecture.
  3. Ongoing Consulting Services: Buyers may choose to purchase ongoing service contracts with the FDD vendor or third-party consultants for maintenance, updates, and changes to the FDD system itself. These services can also support processes utilizing FDD, such as interpreting results, prioritizing activities, and tracking work orders or energy conservation measures (ECMs).
  4. Cost to Fix Identified Issues: Implementing FDD often reveals a backlog of maintenance and repair needs. It is important to plan for the temporary increase in repair costs as deferred maintenance is addressed.
  5. Cost of Change Management: FDD implementation often requires changes in existing roles and may involve new roles. Considering the roles and responsibilities from the outset is a key success factor.
  6. Software and Data Modeling Updates: Keeping the FDD software up to date and ensuring the accuracy of the analytics may involve additional costs, which could be included in the SaaS fee or charged separately by the vendor. This could also include changes made due to the building changing, e.g. changes to base-building HVAC equipment for a new tenant.

Understanding the various cost components associated with FDD deployment helps organizations plan and budget effectively, ensuring a successful and sustainable implementation.Making the Business Case: Tangible Benefits of FDDDetermining the return on investment is a vital piece of the buying process. Quantifying the tangible benefits of FDD is dependent on the business model of your organization. Thus, it’s beyond the scope of this guide.
The Nexus Labs Buyer Community recommends first determining tangible benefits your organization will receive from this program. FDD can help reduce operating expenses (e.g. up to 30% of energy costs according to the US DOE), optimize the use of available capital budgets, enhance customer/occupant experience, streamline business operations & reporting, deliver core ESG outcomes & targets, reduce risk, manage warranty period performance, and optimize maintenance contracts. But which of those benefits are tangible, quantifiable, and defensible for your organization? Aaron Lapsley, Principal of System2 Consulting, recommends thinking about phases of tangible value propositions. FDD can make a quick impact financially, but the value grows as the organization integrates the tool deeper into operations. That’s why it’s important to take an ongoing program mindset, as discussed above.

Then, once you determine the quantifiable benefits, you can use the FDD software itself to track the financial success of the FDD program over time. For example, if energy savings are part of your business case, then you can create a KPI in the FDD application to track savings over time. That allows you to continue to justify the program’s costs and show the real time ROI to the rest of the buying team.

Lessons Learned

The contributors to this Buyer Guide represent FDD deployments across thousands of buildings, hundreds of thousands of assets, and tens of millions of square feet of building space. We asked them what else prospective buyers should know before they buy FDD software.

Besides all of the insights in previous sections of this guide, here are the remaining lessons learned from all that experience. Buyers should consider how to mitigate these FDD program risks during the buying process.

Lesson 1: More documentation = easier implementation

🙌“The more documentation you have, the less questions there will be. The less up to date documentation, the more questions. This is a normal part of the process. The byproduct of deploying FDD is that you will have better documentation on your equipment and systems than ever before.”

👏“It is critical for buyers to understand that the ability to deploy quickly is highly dependent on the data quality at the site. Machines do a lot of work in any software deployment, but it always comes down to data readability by a human to ensure that the point-level data is accurately representing how the equipment is operating in the field. Some ways to short-circuit this prior to technology selection is to undertake a digital readiness audit of any buildings in consideration for technology deployments.”

Lesson 2: Map your requirements to technology categories

🤝“We see an alarming amount of RFP’s where buyers will try to procure a solution but with blended requirements between the product categories. An example might be where 95% of the RFP requirements are for FDD, but then 5% are from adjacent but different products. In that case, it creates difficulty for the right vendors to respond and creates confusion for the buyers and end users about the product that they’re getting.

Clients will have the most success if they procure based on needs/pain points and by mapping their pain points to the respective product categories rather than trying to buy one tool that does everything. There might be a couple out there that claim to do everything, but no one can do everything well. So you can either prioritize which pain points you want to address and do them well (but perhaps not attack all of them in one go) or you can fail at solving all of them in one go.”

Lesson 3: Did we mention “Change Management”?

🤩“Creating engagement and lining an organization up behind a new initiative can only happen if the stakeholders can see how the initiative will help the organization to achieve its purpose and its strategic goals. There has to be a real and strong reason for the project to generate the kind of organizational inertia to make these things happen when there is such a high change management burden involved.”

😎“Deploying an FDD solution often involves change within the organization, including new processes, workflows, and decision-making approaches. Buyers should recognize the importance of change management strategies to ensure the technology's smooth adoption, effective utilization, and long-term success.”

🧐“There are always more opportunities for improvement than are often anticipated. Priotization is paramount. Workflow is key and requires leadership to transform how work gets done and results are measured.”

🤔“Let’s imagine a new FDD system is dropped on a user’s lap without a change management process in place from the decision-makers. That change management process is often left to the service provider, but without a service relationship in place for post-deployment, the service provider is not required to provide that level of service. In turn, the user is left without a resource because their questions quickly get too technical for the executives who purchased the product. Meanwhile the technology provider has an uphill battle with the user for basic engagement because they are taking their frustrations on feeling hung out to dry out on the system in the form of unrealistic expectations and a misunderstanding of what it is meant to be used for. Upfront communication and involvement from all expected users can help the technology get the adoption it deserves and will illuminate the necessary change management process to the executives so that they can be sure they’re getting the adoption and the data they’re paying for.”

😐“Technicians were not as excited about learning/growing into higher value roles that need to understand how sequences of operation affect equipment/comfort/energy.  There was some initial resistance to learning the new skills and reading new diagnostics.  But we persevere and with extra training and support and encouragement and patience, technicians are starting to see the value and become more efficient.  But it was hard at first.  Facility engineers and techs also see it as a new skill or lift/learning curve.  It is more work temporarily, but we’ve seen it payoff in increased knowledge and system understanding, and the issues get easier and easier to fix as they learn the new skills and use the more powerful data at their fingertips.

😌“We had to re-write the agreement language and adopt entirely new practices (and convey that change to clients) to manage a service organization from outputs of the FDD platform instead of preconceived checklists or industry standard maintenance frequencies.

Lesson 4: We’re all on the same team… getting ahead of conflicts

😬“Bringing an outside party into a stakeholder group where they will inherently identify issues in the domain of other parties (contractors and operations staff) creates tension because the facilities team could think that the FDD software is there to make them look bad, whereas the contractors might think the FDD solution is there to steal all of their work. These conflicts must be managed in an empathetic way with clear accountability and understanding of roles.”

Lesson 5: Don’t forget keeping FDD up to date

😊“QA/QC processes are important to establish in large portfolios that have dynamic environments. When controllers are swapped out, or retrofit work done, providing the new point paths as part of a continuous process specified into vendor agreements is a best practice to manage uptime and quality of the data flow over time.“

🙄“Older versions of BAS systems, while they can function, often cause data loss and glitches between devices/controllers and while the data transfer service works great, it can’t fix the problems with webservices on devices if the product is not fairly up-to-date or matching from JACE to supervisor.”

Future Trends in Fault Detection & Diagnostics

Staying up-to-date with emerging trends and innovations is crucial for buyers. As the technology advances, new features, functionalities, standards, regulations, and market dynamics are shaping the landscape of FDD solutions.
In this section, we will explore some of the noteworthy trends and innovations that buyers should be aware of when considering FDD implementation. From enhanced features and interoperability to evolving regulations and automation capabilities, understanding these developments will help buyers make informed decisions and leverage the full potential of FDD technology.

👩🔧The Operational Workforce Shortage 👨🔧

The operational workforce shortage is a significant challenge organizations will face in the coming years. The scarcity of skilled trades and operating engineers necessitates digitization. To address labor challenges and optimize vendor relationships, facility management teams must focus on reducing troubleshooting time and increasing efficiency. FDD plays a vital role in managing the time efficiency of both internal staff and external resources. It enables FM teams to streamline and/or centralize their operations, ensure effective issue resolution, and evaluate the performance of service providers.

⚖️The coming wave of regulatory risk 📜

Regulatory frameworks focusing on carbon emissions are rapidly evolving, with increasing energy disclosure requirements, carbon taxes, and corporate ESG policies. FDD becomes essential for monitoring and optimizing energy usage, ensuring compliance with emerging regulatory requirements, and facilitating sustainable practices.

📈Service/maintenance contracts becoming data-driven 💻

Increasingly, buyers seek to integrate FDD into their HVAC and BAS service practices. Data-driven maintenance contracts emerge as organizations recognize the value of automating routine tasks through FDD. By incorporating FDD into service contracts, organizations can enhance maintenance efficiency, improve equipment performance, and optimize resource allocation based on data-driven insights.

🔄Interoperability growing in demand 🔌

Interoperability is a key consideration for FDD solutions. FDD should not only consume data from various sources but can also potentially integrate with other systems such as CMMS, Asset Management, digital twins, and business intelligence tools. The availability of well-organized and modeled data is critical for effective data sharing and interoperability among different applications.

🤖New types of AI will supplement Expert Systems 🧠

FDD has always been a type of AI: Expert Systems. The use of machine learning algorithms in FDD systems is on the rise. By leveraging these advanced technologies, FDD systems can potentially speed up deployments, reduce false positives, and improve overall reliability.

🪄Supervisory control and automated fault resolution 🕹️

FDD solutions are evolving beyond read-only technologies. Real-time optimization and automated fault resolution will likely become integral to FDD solutions. By enabling optimization and automated problem-solving, FDD systems can enhance operational efficiency and reduce manual implementation.

Conclusion: The FDD Buyer’s Checklist

Congratulations on completing this buyer guide for fault detection and diagnostics (FDD) software! By now, you should have gained valuable insights into the technology, its applications, key considerations, and lessons learned from peers. As a prospective buyer, you may be wondering how to determine if you're ready to make a purchase. Here's a checklist to help you assess your readiness based on the sections covered in this guide:

1. Technology Overview:

Have you gained a basic understanding of FDD software and its benefits?

Do you have a clear idea of how FDD can enhance your building operations?

2. Applications:

Have you identified specific building types and use cases where FDD can be implemented?

Can you envision how FDD will improve efficiency, maintenance, and energy management in your organization?

3. Buying Considerations:

Have you created your vetting criteria, such as cost, vendor expertise, integration capabilities, and scalability?

Are you familiar with the potential challenges and risks associated with FDD implementation?

4. Lessons Learned:

Have you reviewed the checklist of lessons learned from peers who have already implemented FDD?

Have you identified best practices and potential pitfalls to ensure a successful adoption?

5. Future Trends:

Are you aware of emerging trends in FDD, such as the impact of labor shortages, regulatory requirements, data-driven maintenance contracts, interoperability, and the integration of AI and machine learning?

Have you considered how these trends may shape the future of FDD and its relevance to your organization?

By checking off these items, you'll be better equipped to make an informed decision about integrating FDD software into your organization. Remember, FDD can help you address labor shortages, comply with regulations, optimize maintenance, and improve overall building performance.

We hope this guide has provided you with the necessary knowledge and insights to embark on your journey toward leveraging FDD technology. As you move forward, we encourage you to explore reputable vendors, discuss with industry experts, and gather additional information tailored to your specific needs.

To further assist you in finding the right FDD partner for your organization, we invite you to visit our Buyer's Hub. There, you can access a curated list of vetted FDD partners who can guide you through the selection and implementation process. Take the next step towards smarter and more efficient building operations by exploring our Buyer's Hub today.

Good luck in pursuing smarter and more efficient building operations with fault detection and diagnostics software!

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