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4 Steps to Building a Business Case for Efficiency (Hint: Avoid the ‘Poor Performer’ Tag)

Many large organizations have lofty efficiency goals, but struggle to turn them into reality — often because there’s limited buy-in where it truly matters.

One of the most critical, often-overlooked steps to launching successful efficiency- and environmental-management programs is creating an effective business case that not only promotes projects internally, but helps to ensure success during the implementation phase and beyond. Far too many plans either don’t get approved, or are approved and then stall, earning the “poor performer” tag and positioning resource efficiency poorly on any future priority lists.   

So how can energy managers turn their efficiency dreams into a company-backed reality? They should start by following these four steps as they build a business case to fund critical efficiency programs:

1.Establish early buy-in at the executive level. For any resource efficiency plan to work, it must have top-level commitment. The first place to start to secure that commitment is to align your efficiency goals with your company’s public goals. Energy can’t be viewed as a separate objective that’s attached to corporate initiatives as an afterthought. It must be integrated as a visible element of the company’s strategy, and preferably one of the official goals of the company. Getting executives to integrate energy and resource efficiency into overall corporate goals often means helping them see how related measures complement other key priorities.

For example, a well-run energy efficiency program can improve margins, increase production and mitigate risk, all while addressing government mandates, industry regulations and public demands for sustainability. But to be truly effective, corporate energy initiatives must also align with site-level objectives, especially for large companies with multiple facilities and global footprints. That means all stakeholders — from the shop floor to the top floor — must be involved in identifying and prioritizing efficiency and performance expectations.

2. Map current performance baselines. Once everyone is apprised of the efficiency plan, it’s critical to ensure that the company’s performance baselines are appropriate and accurate. That means ensuring that the company has an enterprise-level view into its energy data, and that this visualization incorporates all data to compare sites, prioritize opportunities and flag challenges.

This step is critical because many corporations have data spread over disparate systems that make comprehensive site assessments difficult at best. Plus, it is important to normalize that energy consumption data for variables such as weather, production levels and product mix. An accurate baseline is vital when evaluating sites, and agreeing on those outside influencers and determining how to accurately account for them.

3. Develop an opportunity profile. The next step is to assess and prioritize energy savings opportunities for planning and budgeting purposes. These opportunities can generally be categorized into two areas: operational and capital improvements. Operational projects are those that require little more than enhanced focus and organizational attention. These initiatives often leverage the comprehensive energy data and involve simple, low-cost or even no-cost solutions. For example, a company that uses ovens for its manufacturing process can save hundreds of thousands annually by slightly adjusting when they turn their ovens on to avoid peak utility charges.

Capital-intensive opportunities, on the other hand, are those that require some level of investment to realize savings, which mean the approval process becomes more complex. That’s why sequencing these initiatives can be critical, using the savings generated by operational improvements to help fund those projects requiring capital investments. Another effective strategy is to combine operational and capital projects into a single comprehensive program.

4. Confirm support of implementation owners. This last step may be the most crucial — and the one many energy managers often neglect. That’s because it’s one thing to create a plan, but it’s quite another to effectively implement it across a company with locations scattered around the globe. Energy managers should meet with their peers and onsite stakeholders to make sure they all understand and support the plan. During this phase, it’s important to address specific action items, including

  • Setting energy and resource reduction targets
  • Establishing a timeline for projects
  • Identifying and recruiting owners and influencers

Following these steps is a proven way to successfully build a case for efficiency plans, but they’re just the beginning. Energy and resource efficiency is not an area you can simply set and forget. Energy managers must continue to manage and promote these programs internally to ensure they don’t fall off the corporate radar, and that efficiency becomes an embedded element of the organization’s culture.

By Mike Fraser, Vice President, Global Sustainability Services, Schneider Electric

Mike Fraser is the Vice President of Global Sustainability Services for Schneider Electric. He leads Schneider Electric’s growth initiatives in the area of sustainability consulting and services, including the company’s online sustainability and energy management software, EcoStruxure Resource Advisor.

Mike previously served as the Executive Vice President and Chief Development Officer of San Diego-based Source Intelligence, a product and supply chain sustainability pioneer. His diverse 30-year career includes leadership roles within the environmental sustainability, systems integration and management consulting industries. Prior to Source Intelligence, Mike served as the Senior Vice President of Group Sales and International for environmental services firm Safety-Kleen Systems, the world’s largest re-refiner and recycler of petrochemical products.

Mike holds a B.S. in Journalism/Public Relations and Marketing from Murray State University. He currently serves on Murray State University’s Board of Advisors for the Center for International Business and Trade.

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