How An ERP System Can Help Manage Your Company's Energy Use

By Elana Varon , CIO |  Software

A few years ago, we had the local electric company do a home energy audit. Our 19th-century house was hard to heat, and as we suspected, the inspector found we didn't have enough insulation. But our most cost-effective change turned out to be the purchase of a new refrigerator. You can't manage what you don't measure. Once you start looking at the right data, the results can lead you to solutions you hadn't imagined.

I thought about this as I was reading the CIO 100 application from one of this year's winners, the City of Palo Alto. In 2007, the city council set a goal to reduce its carbon emissions 5 percent by 2009 and then to 15 percent of 2005 levels by 2020-one of the first cities to establish such targets. Every department got a carbon emissions budget, and managers were expected to come up with their own ideas for staying within it. As the recession deepened and fiscal budgets began to get squeezed, "it became clear this couldn't be an add-on green thing," says Karl Van Orsdol, the city's energy risk and greenhouse gas manager. "It had to be cost-effective and we had to report on what our savings were."

Officials already collected plenty of data about energy usage and spending, but didn't look at it. Someone would key a code into the city's SAP system to pay the utility bills, but "there was no accountability and no incentive to conserve," Van Orsdol recalls. That changed in early 2009 when the city deployed environmental and energy-management software from Hara, based in Redwood City, Calif. This software-as-a-service solution lets managers extract detailed data about their energy and water consumption from the SAP system and analyze it. Out of 150 green projects the city has launched, more than half also show potential for cost savings. The city estimates it will save $520,000 on energy this year compared to 2005.

Like Palo Alto, you probably have data that could be used to develop options for running your company more sustainably. You just have to begin using it.

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