18 Jul 2011
We asked Ken Baker from HP, winners of Best FM Partner for Energy Management in our Facilities Management Awards 2011, for his insight into facility management energy strategies.
Facilities managers have a really hard job. They are expected to keep the facility up and running at all times, while at the same time address the costs of running said facility. They are constantly under pressure to reduce those operating costs, and increasingly, that task is becoming as critical as uptime. This pressure is driving many FM’s to look towards energy management as a way to manage operating costs, and in many countries, address carbon and greenhouse gas emissions.
Many limit the energy topic to power consumption, but water consumption should be equally treated within any strategy to improve energy efficiency. Water use is a critical aspect of facility management and a precious resource on our planet. Over 40 percent of the water used in Europe today is associated with energy production, so conservation is clearly important to facility management professionals.
The McKinsey Global Institute calculates that investing to increase energy productivity – defined as the level of output achieved from energy consumed – produces an average 17 percent internal rate of return. So there are solid reasons to address energy management across any company’s enterprise.
What can FM professionals do to address these energy management needs? Clearly the first task is to understand what is being consumed, how much, and by which organisation. The challenge is that in large organisations, collecting and collating energy consumption data can be a daunting task. Energy invoices, stored in spreadsheets, across different organisations prevent many companies from being able to see their usage effectively, thereby making effective management difficult.
There are emerging methods for addressing much of these issues in enterprise energy management. It is important, however, to approach the challenge in an orderly, well thought out manner. This means developing an assessment, or baseline, of the energy being consumed across the enterprise. This assessment will develop an accurate picture of the energy profile of the enterprise, so there is data that can be used to begin developing a strategy to implement reductions and track performance over time.
While individual energy management efforts within departments or organisations within an enterprise can indeed mean reductions in consumption, the issue is that results generally cannot be consistently aggregated to develop a view that can be compared to the investments being made across the business. This prevents enterprises from correctly identifying if the overall efforts are paying off. Therefore, it is critically important the efforts be driven from the top down, and proper enterprise wide investments are made to ensure consistent application of work, and consistent delivery of results.
Managing facilities efficiently occurs from years of collective experience, learning, and applying those learnings. But it takes discipline, investments, and ongoing dedication to the work. But there are now tools and processes available to organisations to deal with the tasks associated with energy and sustainability management. Let’s examine some of the strategies that can help. After we have established the baseline for energy use, which we classify as an assessment phase, we can move on to the next stage, which is planning our energy management future.
Planning is critical to the process, and especially in the energy management and sustainability process. This is because FM’s need to understand all aspect of consumption, and not limit themselves to simply low hanging fruit. Indeed those items that an be easily addressed should certainly be a part of the planning, but keep in mind that energy consumption is in all aspects of the business, so a thorough examination of what must be done should be a part of the planning process. Again, it’s not just about power, but water as well, so attention to detail is important in planning the energy management road ahead.
After the plans have been drawn up, it is appropriate to review those plans in the context of a budget analysis, so as to align investments to available budget. Once solid, approved plans are in place, then the trans- formation can begin.
Transformation is clearly the most challenging aspect of implementing an energy and sustainability management process. It requires real people doing real work to get there. This is where most energy and sustainability efforts begin to either become fragmented or fail altogether. This is where the services of a professional facilities management team become critical. The FM professionals are tasked with spending the client’s budget wisely and efficiently, while staying focused on the goals outlined during the planning process.
Regular KPI tracking becomes an integral part of this transformational process, and is used to ensure the work is on track and is effective. Facilities management professionals can bring to bear an array of services and tools that can make the transformation process not only effective, but incredibly productive. The FM business is itself undergoing transformation today, as new tools and approaches to understanding energy and sustainability are being implemented.
Transformation is not about “projects”, but is a journey embraced by the entire organisation. It is able to have an endpoint, however, and then become the next process of optimisation. This part of the process is as important as transformation, as it adopts the science of continuous improvement. This is where we adjust investments to outcomes to achieve a balance between spending and improvements in the system.
Optimisation is not an exit strategy for the plan, but a way to improve the plan week after week. It is during the optimisation process where again, discipline and dedication become critical. And again, this is the role of the facilities management professional.It is a fact of operating most businesses that there will be commercial real estate as part of the portfolio. This is not necessarily a core aspect of the business, so increasingly; firms are turning to FM professionals and service providers, to manage their properties in the most efficient manner. It is increasingly clear that FM professionals and service providers are key to the energy and sustainabil- ity success of many client firms. It is advisable to readers that are interested in pursuing an energy and sustainability program to seek out qualified professionals for best results.