Look forward to improve how you manage energy and carbon costs

Post date: Oct 28, 2016 9:8:23 AM

Image credit: Lessons Learned in Life

The problem with most sources of energy and carbon data is that by the time they get to you, they are out of date.

The delay between using energy and knowing how much has been used and how much it costs is typically a month and a half - a month to use the energy and collect the data, and another 15 days to create and send out a bill.

By the time this information gets to the people who need it it can be another few months as the bill travels through the organization and is processed.

Having a better system for collecting data is not the solution.

Even if you have an expensive system that collects the data in near real time, it is still looking back at what you have done instead of what you need to do.

The biggest problem with most management systems is that they are designed to command and control.

Beyond Budgeting is a management philosophy that looks to empower and adapt.

The Beyond Budgeting approach is gaining traction with innovative firms that are looking to move beyond traditional ways of managing information and creating change within their organizations.

There are 12 principles of Beyond Budgeting. Three important ones for anyone looking to change the way in which they use energy and commodities are:

Set directional, ambitious and relative goals

Fixed and cascaded goals are designed for long term goals. The UK government has pledged to reduce carbon emissions by 80% by 2050. This means that every organization in the UK will need to reduce carbon, or pay someone else to reduce carbon for them.

Fixed goals, however, are less able to deal with day to day, week to week and month to month needs. Flexible organizations set targets that are ambitious and move them in the direction they want to go.

This means you can constantly assess where you are and redirect how you should be using their time and resources.

Make planning and forecasting lean and unbiased

A critical part of Beyond Budgeting is a shift in mindset from reporting to forecasting.

You can't do much about what has already happened - other than to learn from how you did. You can, however, make a difference in the future.

Too many organizations set an energy or carbon budget at the start of the year and then monitor against it on a monthly basis. As long as the numbers look ok, everything is fine.

But what if you could do more? For example, if you looked forward and saw that the winter was going to be mild, you already know your costs will be lower because you will need less heating?

In this situation, do you adjust your target lower or perhaps use the resources you will save and invest them in energy efficiency measures that year, which will help lower costs in future years?

Trust people with the freedom to act

Good information systems and data help your people make better decisions.

If you can support them with the information and data they need to make better choices, and then get out of their way, you might be surprised by how much they will achieve.

You will benefit from having more engaged people, lower costs and a leaner and more productive organization.

For more information on the beyond budgeting process, look at the Beyond Budgeting Institute.

To take a look at some systems and resources for energy and carbon management, take a look at the Resources page.