How to Maximize ROI On IEM Software Through People and Processes

It's stating the obvious to say that being more energy efficient will have a positive effect on your company's bottom line, as well its carbon footprint. It's also common knowledge that technological advancements are helping companies find new ways to achieve these goals, namely industrial energy management (IEM) software.

From a technological standpoint, IEM is offering unprecedented visibility into enterprise energy consumption and planning with end-to-end energy data across product lines delivered in real time.

Even with impressive new functionalities, however, many companies that have invested in IEM software are not currently realizing the full scope of ROI this type of software can deliver. This is often due to a lack of harmonized business processes and a supporting company culture.

Important Considerations to Achieving Higher ROI

Because ROI can be heavily dependent on the people and processes surrounding an IEM software implementation, it can be difficult to quantify, both in the long and short term. That's why companies choosing to implement IEM need to make sure they are devoting enough time and resources into maximizing the people and processes that support the software.

People and Culture

Since it all starts at the top, one of the ways that organizations can most effectively utilize its people is to create an executive position that manages overall energy management, such as a CSO or energy director. The establishment of such a position signifies to the workers and the rest of the organization that it's serious about making improvements, and having this leader in place can go a long way in helping companies to develop a collaborative structure that seeks to align energy with other sustainability initiatives and plant operations.

It's also important, however, that this position retains a direct connection with workers and local energy leaders on the shop floor, because these employees often have valuable insight on the energy use of specific equipment and shop-floor operations. Where possible, these local plant energy leaders should be empowered to make decisions that leverage their expertise, and escalate issues only when necessary. Communication is key here.

In turn, these initiatives help establish a culture that supports energy management issues across business areas like operations, IT, procurement, supply chain, and others.

Another important resource is the use of third-party expertise and auditing. While this can be as simple as gaining more accurate high-level energy consumption rates or benchmarking, it is typically most effective if utilized on a deeper level to include input on change management and software options.

Processes

When it comes to processes, companies can incorporate continuous improvement models like ENERGY STAR, ISO standards, or SEP into existing operational excellence programs and initiatives to better position themselves to extract ROI. Programs like ENERGY STAR are built off of proven best practices for business processes, and offer benchmark data that's industry specific, which is a common obstacle many companies face when attempting energy benchmark programs.

Additionally, adopting such programs is helpful in managing end-to-end business processes for continuous improvement, reporting, energy procurement, energy use, and energy efficiency projects. It's also important to prioritize and not overreach in your approach to process standardization, and by giving attention only to those processes that will create synergies across the enterprise. By putting more focus on processes that have the ability to deliver quick wins like load shedding and demand response, you can achieve your ROI goals in a shorter timeframe.

Making a Stronger Business Case for IEM Software

Though IEM implementations are growing in popularity, investments in this software are still often passed over or postponed, even though in many cases IEM presents a greater ROI potential than traditional hardware-based efficiency projects, and may even validate the anticipated benefits from these hardware-based efficiency projects. Indeed, through research and conversations with executives responsible for these decisions, LNS has found that many IEM implementations aren't approved due to a lack of certainty in IEM benefits and ROI. In building a business case for IEM, it's important to quantify and communicate how people and processes are crucial factors in determining the software's effectiveness.

To better understand how to best leverage the intersection of people, processes, technology, and construct a comprehensive strategy for energy management, click here to access the LNS Research IEM Best Practices Guide.