3 Strategies for Building a Solid Business Case for an Energy Management System

May 27, 2019

Securing funding is typically the biggest challenge for any energy management program, so energy managers must become smarter about making a business case for the investments they need to help drive their programs forward. And that business case must include the ROI that will be delivered long after the initial investment has been made. A recent webinar Lucid co-hosted with Smart Energy Decisions discussed strategies for effectively securing funding for an energy management information system (EMIS).

One of the webinar participants - Kyle Hendricks, Senior Manager, Energy and Sustainability, CBRE | Global Workplace Solutions at McKesson, noted that with more than 350 sites under utility management and a $35 million annual energy spend, every investment he makes has to show ROI.

“Everything we do has to make business sense. We have to get approval from the business units before moving forward with any initiatives, whether it’s an energy management system or building a new campus,” he said.

Hendricks developed three strategies for building a business case for an EMIS that helped deliver savings in downstream dollars for McKesson.

1. Position the EMIS as a baseline requirement

Hendricks’ top recommendation is to position the EMIS as an essential tool for effective energy management.

“An EMIS by itself is not going to save you energy,” Hendricks points out. “There’s not going to be an ROI on this tool alone. But it helps you identify opportunities that you’re able to act on. It helps you verify and track success from initiatives that you put in place.”

To further illustrate Hendricks’ point, think of an EMIS the same way a carpenter thinks of their toolbox: Without the right tools, can the carpenter effectively complete his work? The same can be said for an energy manager. With an EMIS, they have the tool they need to do their job - reduce energy use and drive costs down. With insights delivered through the EMIS platform, they can pinpoint specific actions that will have the biggest impact on their energy reduction initiatives.

2. Include all stakeholders in the discussion

An EMIS isn’t just for energy managers: it’s also a powerful tool for getting management, employees and building occupants onboard with energy efficiency programs. That’s why it’s important to ensure individuals across many departments and functions understand the value an EMIS will bring to their part of the business.

Hendricks uses Lucid’s BuildingOS energy management platform in part because of its client-facing features. The dashboard is built to help inform and engage people who aren’t driving energy projects from day to day. The insights communicated on the dashboards serve as launchpads for energy managers to take action, but also provide engaging success metrics for building occupants who want to understand how energy improvements are impacting their campus.

As Hendricks puts it, “Once employees are engaged, it’s more difficult to take the system away.” As occupants and end users become more engaged with the energy data, they come to depend on it as a daily resource.

3. Let the data tell the story

Your EMIS is all about data, so the numbers are a great place to start in making a business case for your investment. Sarah Diegnan, VP of Customer Success for Lucid, shared how one large university client secured the funding for their EMIS.

The energy manager knew the campus needed a system that would help her make better data-driven decisions to improve their 300 building campus. So she began with data that demonstrated that their $14 million annual utility spend had increased over time, even when normalized against the growing student population.

She then compared the overall operations budget to the utilities-specific budget and compared the spending on annual software licenses for operations to the spending on utility-specific software.

What she found was a clear mismatch in investment - of the overall $166M budget, only 8.6% was spent on software to manage the largest cost center - utilities. With that data, she successfully made an effective business case and received funding for a solution to better manage utility spending.

With data, the right tools, and solid business case that proves investment ROI, energy managers can more easily secure the funding they need to drive their energy reduction programs forward.

Try Lucid’s EMIS ROI Calculator to start gathering the right information to make your business case.