It’s mind-boggling to consider that until recently, energy management was one of the last remaining organizational line items tracked by spreadsheets, often treated as an afterthought. The opportunity costs and lost gains from this approach are huge. Consider these data points:
- $700 million is wasted every year from running unoccupied buildings in “occupied mode” over the holidays.
- $2 billion in incentive dollars available from utilities were left on the table by corporate America in 2014.
- In the wake of last year’s Polar Vortex, some publicly traded companies missed quarterly numbers due to unexpected energy expenditures.
These are wake-up calls for the boardroom. And savvy businesses get it: smarter energy management leads to competitive advantage. In response, executives are giving more attention to energy management than ever. While this is positive news, most large enterprises today still lack the necessary organization-wide energy management goals and technology they need to put them in the driver’s seat.
Here are six critical strategies your organization can implement to begin driving better energy management discipline:
1. Make Suppliers Compete for Your Business
Most organizations leverage the expertise of a corporate travel agent or a software system like Concur to give them visibility into the best pricing for airfares or hotels. Yet too few organizations in competitive energy markets make suppliers vie for their electricity or natural gas business.
Whether your energy manager does your energy procurement manually or through an online auction platform, responsible energy management starts with ensuring you’re getting the best possible price for energy.
2. Tackle Regulatory Compliance Head-On
Regulatory compliance is a necessary component of conducting business. Just like your HR team has employee data privacy rules with which to comply, energy consumption is also becoming more regulated. Case in point: the US is seeing a 150 percent year-over-year increase in energy disclosure laws — with Atlanta and Portland the latest cities to join the crowd — making compliance more challenging than ever.
Keeping up with this slew of regulatory disclosure laws is a major pain point for many organizations, particularly those with a large portfolio of properties. But a surprising number of organizations are taking the least efficient path to meet these requirements (for instance, devoting hundreds of hours to manually enter data into government websites like ENERGY STAR). Automating and centralizing the collection of utility bill data dramatically reduces the opportunity costs associated with regulatory compliance.
3. Automate Reporting to Internal Stakeholders
As the adage goes, you can’t manage what you don’t measure. Solid reporting is a critical component to any management strategy. But it’s no easy task, especially considering the need to compile disparate data sources, building spreadsheet after spreadsheet and modeling energy consumption.
If you have a data enthusiast with hours of time on his or her hands, that’s fantastic, and you can stop reading now. But if you’re like most organizations, there’s enormous value in automating reporting to not only free up valuable resources to run your enterprise more effectively, but also to reduce the likelihood of introducing bad data into the process.
With energy management siloed across departments and seemingly endless data inputs, best-in-class companies must rely on real-time data and advanced tools to manage the energy line item. That’s where energy intelligence software comes into play. “You have to take the human element out of energy management,” said Dale Sibert, facility manager at Saint-Gobain, a global leader in buildings materials manufacturing and design. “The more you can automate, the more you can be efficient.”
4. Account for Asymmetrical Skill Sets
Just like you conduct regular check-ins with members of your team to highlight wins and coach on underperformance, the same should be true for your operations team. But instead of regularly coaching people, it’s often about coaching buildings.
Some buildings, and the people who run them, are like finely tuned machines. Others, not so much. Especially for those with responsibility over a portfolio of buildings, energy managers should define what success looks like using their best performing buildings as models and then hold the under-performers accountable for driving improvements. Transparency drives accountability, so the more data you have, the easier it is to affect change. Accounting for asymmetrical performance is also a great way to help understand where the next investment — whether it’s dollars or man hours — is going to have the highest impact.
5. Communicate, Communicate, Communicate
Effective communication around energy management is one of the most common challenges in any organization. This is exacerbated by the fact responsibility for energy management is often spread across the organization in multiple functional areas including finance, procurement, operations and facilities management.
Competing goals and silos of responsibility require tools to facilitate effective communication and alignment. Community engagement tools, like those offered by WeSpire, are great ways to promote communication and drive transparency. “It’s the little things that add up, not always the big things,” said Sibert, who manages two of Saint-Gobain’s production laboratories in Ohio. “It’s the behavioral changes inside your facility that make the biggest impact.” Too many organizations overlook this critical component as part of a successful energy management strategy.
6. Create and Enforce Policies
Enterprises have policies for everything from how to buy office supplies to how a sales team must sell goods or services. Additionally, there are tools to enforce those policies, like sales process software solutions like Salesforce.com.
When it comes to energy, many organizations already have good policies in place — it’s the enforcement where the process starts to fail. Nearly every organization has instances of policies that aren’t effectively enforced: start-up and night setback schedules are overridden, weekend schedules aren’t correctly implemented and buildings run over holidays like they’re fully occupied. Think about that $700 million waste data point I mentioned earlier: policies are key to recouping those lost dollars.
Conclusion: Knowledge Is Power
Whether you’re the only person at your organization focused on energy management, unable to dedicate significant time, or have a huge team without clear priorities, having clear strategies in place that are backed by innovative energy intelligence software will be your ace in the hole to finally taking control of energy costs. Energy management transformation won’t happen overnight, but you’ll be amazed by how small changes will very quickly begin adding up to significant savings for your organization.