Over the last 30 years, we have seen organizations streamline their processes and enhance current operations over and over again. The main goal is to work smarter through business intelligence all the while reducing costs and increasing profitability. This was most evident during the “Great Recession” from 2007-11 in which companies had to drastically reduce costs (mostly labor) in efforts to figure out ways to maintain their operational capacity. This was done through automation of processes and business intelligence most often led by the CFO and finance organization managing off the balance sheet. With the bottom line in mind, it behooves the Finance organization to make sure all of their companies operating units are lean and efficient.
Through the evolution of corporations, we have seen business intelligence applied to just about every aspect of a business: Sales, HR, Marketing, Finance, IT, Engineering, Manufacturing, R&D, etc. Depending on your organizational set up, just about every aspect of the business has had pressure to optimize and cut costs. This is the natural life cycle we see with units business units: growing until revenue slows, then building in efficiency, and reducing costs.
The main question now is if CFO’s have addressed cost cutting in every aspect of the business, why has energy been allowed to continue to operate as just a fixed cost? Every year billions of dollars are lost by corporations just because of inefficiencies in their energy consumption. Each building is designed to consume energy at a certain efficiency level and without the correct tools to manage that you are blind to savings. On average, we find buildings operating at 1.5-3x above their efficiency level equating to a lot dollars being left on the table. With the business intelligence tools available today to manage efficiency in real time, there is no reason CFO’s should continue to let this cost fly unmanaged.
CFO’s now have the tools available to them to track, manage, and impact their energy costs to make sure they are operating at their peak levels while minimizing loss of dollars. Keeping these dollars within the organization leads to additional budget dollars to invest in other areas of the business and higher bottom line figures. Early adopters of this practice, in general, have seen higher profitability compared to their counterparts. Energy spend can account for up to 20% of a business costs, so that begs the question: Do you have control over these costs and are you leaving money on the table?