Energy and consumption management, rapidly evolving to include smart grids and other innovations, must take into account energy utilization patterns from all aspects of the enterprise not just utility/HVAC needs.

1. • Cognizant 20-20 Insights
The Future of Energy Management
To reduce operating costs and cut wastage, manufacturers must take
their energy management optimization efforts beyond utility consumption
monitoring and focus on the total work stream: building infrastructure,
supply chains, product design, transportation, plant equipment and
controls and smart metering.
Executive Summary Current Operating Model
The global downturn is testing the resiliency of It has become imperative for businesses to build
businesses across industries by putting pressure dedicated teams and departments to implement
on margins and constraining operating options. processes and technologies that can help reduce
The challenge is particularly difficult in the area consumption. However, with numerous avenues of
of energy management, where rising utility costs, energy consumption to consider, such teams have
a lack of discounted tariffs and restrictive legisla- been struggling to measure it, let alone control it.
tions are creating major headaches for the entire
Seeing this as an opportunity, some IT service
C suite. Amid the prolonged global economic
providers, environmental consultants, energy con-
downturn, businesses continue to see energy
sultants and technology manufacturers dealing
management as a concept limited to monitoring
in energy consumption monitoring services
and controlling utility consumption and reducing
are building software products and suggesting
leakage. Few businesses have successfully
process reforms that can help businesses monitor
identified emerging energy management oppor-
and control their energy usage. However, these
tunities beyond utility consumption.
services deliver only basic consumption data
The scope of energy management should not only without any detailed analysis that traces the
be limited to utility consumption by heating, ven- patterns of usage based upon various influencing
tilation and air conditioning (HVAC) systems in factors, such as the impact of the weather or the
facilities or IT infrastructure, but must extend to scale of operations.
optimization of waste management, building infra-
Currently, there is no single consolidated
structure, supply chain networks, product design,
solution that addresses the entire gamut of
transportation networks and plant controls and
energy management. Through this paper, we
equipment. Moreover, enterprises must embrace
attempt to unearth all the major areas of energy
smart grid/meter systems and renewable energy
management, the limitations of the current set of
sources to enact more effective cost-manage-
solutions and how by improving visibility across
ment strategies and utility consumption, thereby
the value chain, businesses will be able to create
improving their long-term sustainability.
an environment of accountability and achieve sus-
cognizant 20-20 insights | december 2012

2. Sample Energy Consumption Profile Figure 1 depicts an approximate energy con-
sumption profile for a typical manufacturing
organization.
In order to obtain detailed insight about loca-
tion-specific or equipment-specific consumption
25% of resources, organizations need to leverage
35% technologies such as smart meters, sub-meters,
Facilities building management systems and data loggers.
& Buildings
20% What Next?
Manufacturing
20% Such location or equipment-specific consump-
Logistics
tion data can be coupled with other factors, such
Enterprise
as consumption at a similar property, weather,
number of employees, floor area equipment type,
insulation type, etc., thereby empowering deci-
Figure 1
sion-makers to keep in check the consumption of
energy resources.
tainability goals. Efficient energy management Four variables that drive the concept of energy
can enhance the image of a company as a respon- management are:
sible green supplier to key stakeholders including
investors, partners and customers.
• Potential areas of resource usage.
• Opportunities within these potential areas that
Demystifying the Sources can be tapped to minimize resource usage.
An organization’s energy portfolio can be exceed- • Stakeholders who need to own the implemen-
ingly complex and vast. In large and mid-size tation of candidate projects to address the
businesses, resources are treated as a free opportunities.
commodity since there are no restrictions and
employees use them rather liberally. Due to
• Potential benefits which the stakeholders and
the organization stand to gain.
this behavior, it is a challenge to find “where”
resources are being used and, more important, Figure 2 depicts the relationship between these
wasted. four components and how they work together to
maximize energy management benefits.
Scope of Energy Management
AREAS
Facilities/Buildings Manufacturing Logistics Enterprise
• Selection/installation of • Installation systems to
of energy • Green supply chain. • Redesign process for a
advanced building monitoring
• Manage responsible sourcing paperless office.
management systems and
equipment.
control plant equipment.
• Attain energy efficiency
and optimal inventory
management.
• Rationalization of IT
infrastructure.
• Use of energy efficient
ENERGY STAR certified
through advanced process
control. • Reduce carbon footprint by • Virtualization and
OPPORTUNITIES
optimizing routes, efficient consolidation.
equipment.
• Real-time energy load-building, etc.
• Data center optimization.
• Monitor consumption based monitoring.
• Manage reverse logistics for • Green readiness assessment.
upon budgets and alerts.
• Product/process design waste management.
• Moderate consumption based optimization.
• Reuse parts using recycling • Carbon footprint assessment.
upon external factors such as
humidity, temperature,
• Design for reduced energy programs. • Sustainability reporting for
green readiness and
consumption.
pressure, etc. regulatory compliance.
• Optimized(facility simulator).
design of green • Design for reduced material.
buildings
GOALS HOLDERS
• Facility manager. • Plant manager. • CIO &&IT leadership.
STAKE-
• CSR team. • CXOs and leadership. • Operations manager. • Risk compliance.
Reduce energy consumption Reduce energy consumption
Reduce energy consumption & Reduce energy consumption &
& improve brand & investor & improve brand & investor
manage regulatory compliance. manage customer expectations.
perception. perception.
Figure 2
cognizant 20-20 insights 2

3. Shortcomings of Today’s Energy on external insights by an energy consultant/
Management Products specialist. Clearly, these products can’t be sold
in isolation and must be accompanied with
The limited benefits of today’s energy
consulting insights as a service provided by a
management products can be attributed to
third-party provider/systems integrator.
ongoing economic pressures and regulatory-
mandated reporting of carbon emissions that • Operational carbon and energy management:
public companies must comply with. This segment comprises products that monitor
and control equipment that consume electricity
it is incumbent on According to Forrester,1 the intensively such as heating, ventilation and air-
energy management market conditioning units (HVAC) or major production
users to analyze their is divided into three product units. These products are not integrated with
energy usage and segments with minimal other systems and do not provide any intel-
interpret reasons overlap between them (see ligent analysis capabilities. Such systems
Figure 3). These products primarily monitor consumption data and only
for irregular peaks/ either address different cater to facility managers who need to continu-
troughs or understand classes of users with limited ously monitor the performance of HVAC and
the impact of data, or provide detailed intensive energy consumption units.
information of a specific area
consumption on the for a specific class of users. • Information and communication technology
environment. Many suppliers are rapidly
carbon and energy management: This
segment refers to the systems that IT adminis-
moving into this market but
trators leverage to closely monitor the energy
none at this time provides an end-to-end solution
consumed by information technology infra-
to a variety of users. The three segments are:
structure such as data centers, PCs and servers.
• Enterprise carbon and energy management: These systems do not have any analytical capa-
This segment serves a set of executive/business bilities and only focus on the consumption of
users across various lines of a business. energy by the IT infrastructure.
The platforms and systems that belong to
this segment help users monitor and report As can be deduced now, none of the platforms
aggregated energy consumption and carbon or products aligned to the three segments of
emissions across the corporation. However, due energy management has capabilities to intui-
to limited analytical capabilities of products tively analyze the impact of energy consumption
in this segment, there is a heavy dependence or provide any insights on opportunities to save.
Hence, it is incumbent on users to analyze their
energy usage and interpret reasons for irregular
Three Segments of Energy peaks/troughs or understand the impact of con-
Management Products sumption on the environment.
Energy Management:
An Advanced Approach
Understanding the changing needs of the market
Enterprise over the years, there is evidence that providers of
Carbon and energy management products and services have
Energy started taking stock of their offerings in order
Management to include additional reporting and analytical
features.
ICT
Operational (Information Clearly, the aim is to help businesses achieve a
Carbon and and Communication wider objective. In fact, some companies are
Energy Technology) seriously considering an extension of their
Management Carbon and Energy current capabilities; for instance, CA has recently
Management
added enterprise sustainability metrics to its
existing product, ecoMeter.2
While that may be one way of effecting better
energy management, some providers are heading
Figure 3
cognizant 20-20 insights 3

4. Key Metrics Across the Value Chain
Value Chain
Product Distribution,
Design and Sourcing Manufacturing Retailing,
Concept Recycle
• Quantity of material used. • Number of units per • Energy usage by equipment. • CO 2 footprint due to
• CO impact based upon
2
transport load. • Energy usage due to changing transportation of
type and quantity of material. • CO2footprint due to external factors — temperature, finished goods.
Key Metrics
• Dimensions for efficient transport of goods. humidity, etc. • Energy usage for storage
transport loading — number • Energy usage for • Time to manufacturing due to of finished goods.
of units per load. managing inventory. product design. • CO 2 footprint due to
• Time to manufacture • Energy usage due to changing reverse logistics for
and assemble. internal factors — flow rate, recycling programs.
• Recyclability percentage of pressure, etc.
the material used. • CO impact due to waste.
2
• Reduction in CO footprint
2
based upon mix of recyclable
material used.
Metrics for Operations — Facility and
Operations Resources Management
• Energy usage due to IT infrastructure.
• Energy usage due to HVAC.
• Energy usage comparison between facilities.
• Energy usage based upon number of people. floor area,
working hours etc.
• CO footprint due to employee travel.
2
• Forecast energy usage if energy efficient products are installed.
• Usage based upon renewable and nonrenewable fuel
composition.
• Energy usage as per time of use.
• Estimation and validation of bills.
• Energy usage against industry benchmarks.
Figure 4
down the path of integrating their product lines Conclusion
to offer a single solution. A case in point is IBM,
Clearly, manufacturers stand to benefit greatly
which is trying to address the issues raised in
from technologies that various energy-man-
a forum, Green Sigma™ Coalition,3 formed by
agement service providers are implementing to
like-minded companies. This forum aims to help
deliver an automated platform (with intelligent
organizations become more efficient and sustain-
alerts and modeling tools) for data collection,
able. IBM seeks to create intelligent systems that
consolidation and analysis.
optimize resources, including smart grids, water
and traffic, not only at the macro level but to also With some of these new methods, the energy
provide time-relevant data to gain insights and management market will advance to provide
inform forward-looking decisions. intelligent analysis once energy usage data is
seamlessly integrated with other systems across
Such new capabilities can reduce the dependency
work streams, such as supply chains, plant
of businesses on external agencies/consultants.
controls, financial reporting systems, material
Taking such approaches can enable companies planning and product design, waste management,
to automate, monitor and control the two-way facility management and smart grid/meters.
flow of energy from power plant to plug, create
The best way to achieve such advancement in the
transportation systems that optimize traffic flow
industry is perhaps consolidation through acqui-
and decrease CO2 emissions, provide advanced
sitions of niche energy management consulting
portfolio/task management capabilities, use companies by large ERP or IT product companies.
predictive analytics for better management of
resources and suggest corrective action. Small players offering niche services will eventu-
ally realize that the only way to avoid becoming
These can be achieved by addressing key obsolete with the change in paradigm is to be
challenges that can be measured by collecting acquired by larger companies since most business-
metrics across an organization’s value chain (see es seek enterprise-wide solutions with a broader
Figure 4). set of capabilities than mere energy monitoring.
cognizant 20-20 insights 4

5. This will help unlock a new environment for energy As an outcome, businesses will not only be able to
management that will empower businesses to lower costs and increase efficiency, but they will
leverage sustainability investment opportuni- cap wastage and pollution, leaving a cleaner envi-
ties within their value chain. They will be able ronment and more abundant resources to future
to develop custom dashboards and reports and generations.
share relevant metrics with their customers,
regulatory authorities and investors — leading to
greater accountability.
Footnotes
1
Forrester study, The Evolution Of Enterprise Carbon And Energy Management Software,
http://blogs.forrester.com/daniel_krauss/10-12-21-the_evolution_of_enterprise_carbon_and_energy_
management_software.
2
Computer Associates press release: http://www.ca.com/us/news/Press-Releases/na/2012/CA-Technolo-
gies-Extends-Leadership-of-Energy-and-Sustainability.aspx.
3
“IBM’s Green Sigma Coalition Lines up Industry Leaders,” Environmental Leader News:
http://www.environmentalleader.com/2009/06/23/ibms-green-sigma-coalition-lines-up-industry-leaders/.
About the Author
Anupam Gehani is a Senior Consultant within Cognizant Business Consulting’s Engineering and Manu-
facturing Solutions Practice. He has six years of consulting and business analysis experience, working
with U.S., UK and European customers. His areas of expertise include delivering transformation projects
that entail vital processes in the utilities and industrial automation space. Anupam holds an M.B.A. from
SP Jain, Singapore, and a bachelor’s degree in chemical engineering from Mumbai University, India. He
can be reached at Anupam.Gehani@cognizant.com.
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