Reach Out to Finance Execs With Data They Understand
Many approaches to gathering energy data from buildings and the equipment running within them are available. Indeed, organizations are awash in data.
This is a great thing – and also is a challenge. It’s an advantage for executives who want to save money and run in a more environmentally sound manner. The challenge is finding ways to benefit from the data. Processes and procedures must be found to make the data understandable to C-level executives who ultimately must sign off on projects. Many of these executives speak in terms of ROI and capex, not kilowatt hours and BTUs.
Pieter Noordam, the CEO of Alchemy Unlimited, suggests that one of the challenges is that there is a disconnect in some organizations. The data is there, but not in the form that is helpful:
What are seeing is that bigger companies have systems in place to measure energy use, with meters through the building. But we see all that energy data kind of almost hidden under desk of someone in facilities management. Others in the organization like financial managers have no idea that they have that data or are aware it is there but it is not translated into what they know, which for financial manager is dollars, cost and for sustainability managers is [answers to questions such as] ‘What is my CO2 footprint?’
It is a vital problem because so much in energy management is new. There is no shortage of promising approaches to increasing efficiency. In many cases, they overlap. The right one must be chosen. It is vital – especially at this moment in of rapid innovation – that the people in the front lines of energy issues find ways to communicate with the people who will make strategic decisions on what hardware and software to use. Doing this requires insight into the organization’s goals. In other words, communications between the facility and energy side of the business on one hand and the financial decision makers on the other must be deep and nuanced.
Noordam offered suggestions to energy and facility managers who seek more influence over planning and who want a seat at the corporate table. The first simply is to be prepared. “If at the first question from the CFO you draw a blank, you are on the wrong side of the equation immediately,” he said.
Noordam also suggested ensuring that as much information as possible is collected. This data is from a historical perspective, raw use of energy, cost data, granular and aggregated data and data in a wide variety of forms and formats. It also is helpful to present “what if” scenarios that illustrate possible savings or other benefits that would have been realized if a particular step had been taken. All of this data should be clearly presented in the format most likely to be understood by a person with a financial background.
There is more than an energy manager can do: He or she can learn. Noordam suggested that a working knowledge of financial terms such as return on investment, capital expenditure and operational expenditure and learn how they fit into the big picture how the company operates.
The big picture here is simple: The emergence of the Internet of Things (IoT) and the growing sophistication in the energy distribution model brought by net-metering and other innovations are making energy management far more complex. In parallel, the growing importance of use of renewables and reducing an organization’s carbon footprint is moving energy issues from the periphery to center stage in the boardroom.
Energy managers must recognize that this transition is well underway and react according. Developing good data presented in the form that is easily understood by people with MBAs is the first and most important step.
Noordam’s company that offers the RECIPE Analytics platform. It provides real-time, utility-independent information about a facility’s energy use and the cost and quality of that power. The real time element enables precise data to be incorporated into reports. For instance, RECIPE enables pricing information to be used that are based on the tariffs that are in effect at any point in time to be used.
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