In their 2019 article in the Harvard Business Review, Companies are Failing in Their Efforts to Become Data-Driven, Randy Bean and Thomas Davenport look to explain why most organizations are failing to become data-driven, despite goals to, “treat data as an important asset, evolve their cultures in a more data-oriented direction, and adjust their strategies to emphasize data and analytics.”
After surveying C-Level technology and business executives at some of the world’s largest organizations, the authors found that most respondents cited organizational alignment issues as a primary obstacle.
In our experience, this has often been the case. Too often, functional leaders independently pursue point solutions that solve an immediate business need but contribute to fragmented and siloed data architectures.
As a result, we often learn that amassing data isn’t our clients’ primary challenge when it comes to managing energy, water, waste and telecom expenses, as well as greenhouse gas emissions. After all, many are already capturing resource data from supplier contracts, utility bills, building management systems, submeters and IoT sensors.
Instead, the challenge that many organizations face is leveraging actionable data to drive results.
With uncertainties in the global economy, changing work procedures, and mounting pressures to take substantive climate action, there has been no better time for an organization to take a closer look at its data systems and operations and re-evaluate whether they have what they need to effectively manage resources and reduce costs.
Resource data shows how much energy, water and waste a business is using or generating and how much it costs. Having this data helps companies establish baselines, create budgets, set goals, measure results and identify outliers to prioritize improvements while optimizing expenses.
In the following article, we offer key questions and best practices for ten teams across your organization to help you determine whether you have the infrastructure and functional alignment needed to action your data and achieve your strategic objectives.
Tasked with managing costs and supply chain risks during one of the most volatile periods in history, it’s critical that procurement offices have the site, supplier, contract and market data they need to take advantage of favorable buying opportunities and limit their exposure to unforeseen price swings.
Key questions for procurement managers:
Utility managers need line-item details to connect their energy costs to actual usage, but they also need that data to be reportable. Data management systems need to be sophisticated enough to capture the thousands of line items that different vendors use to charge for volume, usage, time-of-use, transportation, environment and taxes. They must also be flexible enough to help utility managers understand which charges are addressable through purchasing, equipment or behavioral changes.
Key questions for utility managers:
Until an organization powers its operations from 100% renewable resources, its environmental impact is significantly influenced by the generation mix of local grids. Moreover, investors, regulators and other stakeholders are beginning to scrutinize management of water and waste streams as well as GHG emissions. To determine where they can make the biggest environmental impacts, sustainability managers must evaluate the composition of their current and future electrical grids, tie their water footprint to local risks, and assess waste diversion opportunities across their portfolio.
Key questions for sustainability managers:
Operations managers face a tall task: driving production through scheduling complications, employee health and safety precautions and an unstable supply chain. Power quality issues and unplanned downtime is not an option. With limited capital available for reliability investments, operations managers must understand the cost-implications of hourly production changes and they should look for capital-free efficiency and resilience projects.
Key questions for operations managers:
In the age of remote work and varied local social-distancing measures, traditional KPIs like energy or water consumption per square foot just aren’t applicable. With significant differences between occupancy, production and regional pricing, facility managers need more relevant benchmarks to evaluate building performance. Moreover, variability in cost and consumption may be hiding water leaks, power factor penalties or malfunctioning equipment. Advanced metering and sensor equipment has never been more important.
Key questions for facility managers:
With ever-changing production levels, regulations and market prices, developing a reliable energy budget can be a real challenge. The COVID-19 pandemic hasn’t made that any easier. As organizations begin to map plans for 2021, it’s critical that finance teams have visibility into energy costs per dollar of revenue and can predict the impact that potential price changes will have on earnings.
Key questions for finance managers:
Managing cash flows has never been more important, from auditing invoices for errors and savings opportunities to reducing late fees and security deposits. Moreover, the most competitive companies are finding ways to reallocate back-office personnel from time-consuming tasks to value-adding activities.
Key questions for AP managers:
In collaboration with facility personnel, environmental managers and compliance officers are challenged to ensure that their operations comply with a myriad of local, state and federal regulations while adapting policies to shifting COVID-19 forecasts and guidance. Without sound data and central governance, organizations are likely to remain reactive – endlessly putting out fires and unable to systematically improve procedures and reduce costs.
Key questions for EHS & compliance managers:
Increasing digitization, network diversification and fast-changing technology are all making it harder than ever to manage the hard and soft costs of a modern telecom network. Very often, organizations can add six or seven figures to their bottom line by automating bill collection, processing and payment, and by building the inventories needed to manage their telecom programs.
Key questions for IT managers:
Despite all the challenges that arose from the COVID-19 global pandemic, the need for global action on climate change has not abated. Sustainability leaders are even leveraging lessons from the coronavirus to deliver purposeful action, quickly. Investors, customers and regulators continue to set higher standards, and organizations are responding with Scope 3 goals, science-based targets, carbon negative goals and innovative ways to incorporate sustainability into their core business strategy. Integrated reporting is on the rise; issuance of sustainability-backed bonds is at an all-time high; data centers are leveraging renewable energy to attract customers; consumer packaged goods companies are embracing circular business models. The value of a simple REC purchase is changing.
Key questions for the executive team:
How The CFO Can Drive Sustainability Transformation. Read blog →
Hopefully your organization is already taking steps to answer the questions above. If so, you’ve likely succeeded in building a data-driven organization and have claimed a serious competitive advantage over your peers.
If, however, your organization does not have the resource data, processes or strategies in place to adapt to pressures related to the sustainability transformation, then we strongly recommend scheduling a discovery session with one of our experts.
To learn how leading organizations are consolidating resource data and driving bottom-line results, contact us today.
Bridging the gap on three best practices for sustainable resource management.