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Energy, carbon management apps offer new twist on enterprise software

Enterprise carbon and energy management (ECEM) know-how comes in handy for VARs.

Sales of software to help businesses manage energy consumption and measure their carbon footprint or greenhouse gas emissions are accelerating at midsized and enterprise companies.

But forward-thinking VARs and systems integrators that have built a practice around these solutions caution that success here requires more than learning how to deploy or integrate certain applications from the technical standpoint.

“You need to dedicate people to understanding the broader corporate sustainability movement,” said John Breakey, co-founder, president and CEO of Unis Lumin Inc., an IT services and business consultancy based in Toronto. “It is all about habit-changing activities. The tools are a facility to change the habits. You will need to invest in knowing the terms that matter.”

Over the past year, Unis Lumin has developed services to help its customers get a better handle on various metrics that traditionally have been measured on spreadsheets or using more ad hoc methods – if they have been measured at all. In particular, companies want to more closely measure and reduce their energy consumption, not just across their data centers but across their entire organizations as well.

ECEM software goes online
Forrester Research Inc., which has been following this segment for at least two years, said enterprise carbon and energy management (ECEM) applications have roots in business intelligence, enterprise resource planning software; environmental, health and safety applications; and IT management software. Many of these developers still sell their software direct, but some, including Enviance and SAP are starting to build channels.

Another recent development may shed an even brighter light on the category: Just a few weeks ago, Oracle released two environmental reporting modules for its ERP software.

In late 2010, Forrester predicted that the category could break $1 billion in annual sales by 2013. In its report on the evolution of enterprise carbon and energy management software, Forrester's analysts note:

“Whether for companies or cities, carbon and energy management will become the fundamental platform for enabling corporate sustainability strategy, as transparency into carbon emissions and other resource use is the prerequisite to setting appropriate reduction targets and identifying and prioritizing sustainability projects to reach those targets.”

From the solution provider’s point of view, opportunities lie in helping companies integrate all the different points of view that inform these energy and resource management decisions, according to service providers. The traditional “buyer” isn’t necessarily the IT department: Financial, operations and environmental teams also influence purchase decisions.

At CH2M HILL Inc., Wade Carter, the Environmental Compliance & Sustainability
business development lead for Canada, said his company is seeing an interest in these solutions from traditionally heavy emitters, such as the power, oil and gas industries. CH2M HILL is a management consulting, sustainable engineering and design firm with government, civil, industrial and energy clients.

“Integration is a large component of the work,” Carter said. “Each stakeholder area may have a very different data interest.”

Aaron Brooks, manager of the Unis Lumin innovation office, underscored the need for IT services providers building a practice around ECEM to consider these solutions holistically and on an ongoing basis. One of Unis Lumin’s most successful offerings is an assessment that helps a company understand its exposure to certain factors, such as climbing electricity or water costs and how it might take steps to better manage these factors.

“We look at all the different elements: people, process and systems,” Brooks said. “How aware are the employees? What policies are in place? What technology is used to track everything?”

Steve Bogart, a partner at Computer Sciences Corp. (CSC) and director of enterprise compliance and sustainability in the Falls Church, Va.-based systems integrator’s climate and environment science group, said manufacturing companies with extensive investments in product facilities are embracing these energy management applications because they can cut their energy consumption. His team demos these sorts of applications every day.

“At the end of the day, in a tight economy, particularly for process manufacturers, energy encompasses a huge part of their operations budget,” Bogart said. “If you have an opportunity to reduce that cost, you will take it.”

For some companies, energy could be 20% of total production costs. A reduction of 5% to 10% represents a material impact that can quickly offset the costs of the software.

Over time, Bogart believes companies will use energy management software tools to benchmark production facilities against one another in order to schedule work more efficiently. “Getting this information up to the enterprise level is what is important,” he said. “Most companies scrutinize office supplies more than their energy costs.”

CH2M HILL’s Carter also pointed to a more sophisticated, enterprise-wide interest in these solutions. “One of the things that has changed in recent months [is that] you see our customers improving their understanding of what they need and their requirements,” he said. “They are being more critical about what they need and want. That puts pressure on us as an implementer and the vendors as well. These buyers are getting more savvy.”

About the expert
Heather Clancy is an award-winning business journalist in the New York area with more than 20 years experience. Her articles have appeared in Entrepreneur, Fortune Small Business, the International Herald Tribune and The New York Times. Clancy was previously editor at Computer Reseller News, a B2B trade publication covering news and trends about the high-tech channel.

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