At Hara’s Executive Summit held on September 20th, new CEO Dan Leff described energy cost savings as a “here and now” opportunity, a clear call to action for corporations and institutions. Yet to realize these savings, structural hurdles must be overcome. Disaggregated data, misaligned organizational incentives, heterogeneous energy management infrastructure, and issues with business case credibility have been common issues, slowing energy efficiency investment.
“This low hanging fruit has been hanging low for about 20 years,” said Jim Sweeney, a Summit speaker and Executive Director of Stanford University’s Precourt Energy Efficiency Center. “There seems to be an electric fence around that orchard – the question is, what is that electric fence?”
In this context, Hara introduced Mr. Leff, an energy industry veteran, and presented the company’s latest product development roadmap, outlining a number of new capabilities for energy management. While careful not to dismiss carbon management and sustainability, the clear direction going forward is to help customers save money on energy. Hara aims to provide better data, enterprise-level integration, and business support for efficiency investments in a way that is CFO-relevant.
Hara’s direction is consistent with other major players in this growing software market. Sustainability-related offerings from SAP, IBM, CA, Enablon, C3 and others are increasingly focused on helping customers drive measurable cost savings in energy use at an enterprise level. This was highlighted as a major trend in AltaTerra’s June 2011 industry landscape report titled Enterprise Sustainability Management Solutions: Reference Architecture and Buyers Guide.
Customers and experts presenting at the summit described energy costs ranging from 5-30% of operating profits, with a savings potential of up to 10% of operating profits. They also detailed the different ways that energy costs add up – directly on energy bills, and indirectly through freight and MRO (maintenance, repair, and operational costs).
Customers agreed that energy saving opportunities abound within most large organizations, and are very material to the bottom line. Not only that, many customers are demanding energy & GHG reduction programs at their suppliers. The challenge remains getting better visibility to energy use data, and establishing better enterprise-level disciplines for identifying and executing the highest-return efficiency improvements.
Hara provided a preview of new functionality currently under development – some of which will be released in the next 45 days, followed by additional releases in 2012. The outlines of three new modules included ‘Insight’, which will report enterprise-level energy performance, and analyze energy investment broadly in terms of a percentage of the organization’s operating profit. The new “Modeling, Forecasting and Budgeting” module allows organizations to model best and worst-case enterprise-level energy cost scenarios, based on a range of internal and use and pricing variables. And a new module for “Efficiency Planning and Optimization” supports top-down target setting for energy efficiency and cost savings objectives, enforcement of ROI calculation disciplines, and advanced project portfolio analysis.
We will continue to actively track Hara’s progress in development of this important new functionality, and in a larger context, highlight customer experience with deploying energy management capabilities.
Don Bray is president of AltaTerra Research. Learn more about Hara, C3, and other sustainability management vendors in AltaTerra’s latest report “Enterprise Sustainability Management Solutions: Reference Architecture and Buyer’s Guide.”