EAM HIE PAPER ISO 50001: Are You Ready for the New Energy ... · Organization, a worldwide federation of national standards bodies, recently issued a new standard, ISO 50001: Energy

ISO 50001: Are You Ready for the New Energy

Management Standard?

EAM WHITE PAPER

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Table of contents

2Infor is in no way committing to the development or delivery of any specified enhancement, upgrade, product or functionality. See “disclaimer” paragraph contained herein.

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Executive summary .................................................................................................................................................................. 3It’s the law. ..................................................................................................................................................................................... 3A new way of viewing energy use... ..................................................................................................................................... 4ISO 50001—a standard for viewing energy use.. .......................................................................................................... 4The link between energy management and asset management. ........................................................................... 5The role of energy waste as a cost factor. .......................................................................................................................... 5The stages of energy maturity .............................................................................................................................................. 6Making it formal. .......................................................................................................................................................................... 7Standardizing the effort ........................................................................................................................................................... 7A framework for success ......................................................................................................................................................... 8How does the energy management program stack up? ...........................................................................................10What’s in it for an organization? ..........................................................................................................................................10Infor10 Enterprise Sustainability Suite.............................................................................................................................11How Infor10 Enterprise Sustainability Suite measures up against ISO 50001.................................................12


3INFOR EAM > WHITE PAPERInfor is in no way committing to the development or delivery of any specified enhancement, upgrade, product or functionality. See “disclaimer” paragraph contained herein.

Executive summary.Historically when businesses managed assets it meant that they were concerned with hard assets such as facilities and equipment. Recently, however, a growing trend in enterprise asset management (EAM) involves investigating the role energy usage plays in judging the value of assets to the organizations. Usually the perspective is top-down and financial in nature. Utility bill totals, maintenance and repair costs, replacement expenses, and other quantitative values are analyzed and adds up to a number which many will cite as the energy usage factor in managing the assets. However, a bottom-up perspective reveals valuable information concerning the qualitative nature of energy usage and this information paints a true picture concerning the sustainability of the assets. Quantitative information about energy usage is valuable but it also represents a fait accompli or an after-the-fact look at the energy usage financial outcome. Qualitative information speaks to what is happening all the way down to individual assets and how sustainable they are in meeting projected life-cycle expectations. In that respect, it can be used to calculate the environmental outcome of energy usage. No matter which way energy usage is viewed, one thing is certain: Energy usage can have a dramatic, often unappreciated, impact on the bottom line and profitability of the organization.

Because so much data is generated by looking at energy use from end-to-end, there is a critical need that it be gathered, documented, analyzed, and accounted for in a systematic way, recognized by all as an accurate, repeatable, and timely protocol for such activities. The International Standards Organization, a worldwide federation of national standards bodies, recently issued a new standard, ISO 50001: Energy Management Systems—Requirements with guidance for use, that can be used to create such a systematic approach to investigating the role of energy usage in asset management.

This paper examines how organizations, by following the ISO 50001 standard, can help to create a viable method for establishing a policy, a program, and a culture of energy and asset management that is accurate, repeatable, timely, and, most importantly, cost effective—both financially and environmentally—for any organization desiring validity in managing its energy usage. In essence, it establishes energy as an enterprise currency. The paper also describes a technology solution that meets the majority of the management goals found in the ISO standard.

It’s the law.The first law of thermodynamics tells us that energy can be neither created nor destroyed. Left unsaid, however, is the reality that it can be wasted. That’s a fact that most businesses need to be concerned about since energy use is a primary expense for them. When energy is wasted for any reason, the financial impact shows up in the bottom line of a business, often to a degree surprising to many. In point of fact, energy costs can account for up to 80% or more of a typical commercial or industrial company’s non-labor operating and maintenance budget, with the remaining 20% going to actual asset management expenses, according to the US Department of Energy. If any of that 80% cost pays for wasted energy, it weakens a company’s profitability and financial strength.



Also by implication and according to the first law of thermodynamics, wasted energy is not destroyed either. It simply changes form when not being used for its intended purpose. That change in form often has a separate and equally important cost. The environmental costs of initially generating the desired energy, whether wasted or not, and the environmental impact of the newly transformed energy (heat, vibration, etc. and the asset’s increased energy usage) both contribute to the carbon footprint of the company. Instead of valuation by dollar amounts, however, this cost is paid for in the currency of greenhouse gases and potential climate change.

A new way of viewing energy use.Often the energy financial cost has been viewed in the past as an almost fixed cost of doing business. That view is changing as more and more companies begin to see energy use as being asset-based. Companies are now reassessing the traditional factors they use to determine the efficiency of individual assets. It’s no longer enough to look at excessive inventory, downtime, and other material factors to reduce overall waste, without integrating energy performance into the mix. Organizations that fail to address their energy efficiency face substantial economic risk

A best practice approach to asset management, called global asset sustainability, provides a clear and comprehensive definition of efficiency. This definition includes information about whether or not an asset is consuming more energy than expected. The practice allows enterprises to monitor and manage the energy consumption of their assets continuously. It helps drive improved financial results throughout the organization, as it manages assets for optimal performance. With the right technology assist, it is engineered to do this faster and more effectively than ever before.

ISO 50001—a standard for viewing energy use.The International Organization for Standardization (ISO) is a worldwide federation of national standards bodies primarily interested in establishing technical standards for most, if not all, industries. As such it calls for establishing a systematic and reliable way to investigate the relationship between energy usage and managing assets. In fact, it recently issued a new standard, ISO 50001:2011 that specifies requirements for establishing, implementing, maintaining and improving an energy management system, whose purpose is to enable an organization to follow a systematic approach in achieving continual improvement of energy performance, including energy efficiency, energy use, and consumption.

It addresses energy cost issues as a way to demonstrate both the financial and environmental benefits to be realized through systematic energy management. This new standard, when adhered to, will benefit organizations, both public and private, in controlling their energy costs through a reduction of wasteful energy usage.

6 Daniel Stouffer, eZine Articles, “The New Trend Around Global Asset Sustainability”



The link between energy management and asset management.Organizations with major facilities have been practicing enterprise asset management (EAM) for years. Currently, successful EAM involves technology and smarter asset management so that organizations can stay competitive. This is true now more than ever as businesses now operate in an uncertain economy, with growing global competition, facing increasing regulatory pressures, and within an aging infrastructure. The long view of EAM has always been to maximize the availability, reliability, and performance of assets and to minimize the total cost of their ownership. Today, EAM now wisely includes sustainability in its management concerns. Specifically, it is a sustainability that focuses on energy efficiency. It comes down to the dependency between how well an asset performs with how well it uses energy. Manage the energy usage efficiently and you manage the asset effectively.

The role of energy waste as a cost factor.Operating a business often involves the use of energy-consuming assets—ranging from motor-driven equipment to heating, ventilating, and air-conditioning systems, from chillers and boilers to material handling and production equipment. When these assets are operating at optimal levels, they help to create the profit that keeps the business open. Judging how effective they operate traditionally involved examining three factors—availability, performance, and quality. Today, however, a fourth factor has a major impact on that judgment: energy efficiency. Not coincidentally, these same four factors comprise the index that measures the previously mentioned global asset sustainability. When energy is wasted, it becomes unusable from the standpoint of its original purpose. The cost, however, not only remains in place but also actually increases as more and more energy is wasted because an asset is not functioning optimally. There is a negative feedback loop in place when energy is wasted. The more the asset declines in functioning, the more energy it wastes. The energy loss is actually a transformation into heat energy, vibrational energy, and the increased energy usage needed to overcome the inevitable friction forces that occur as assets slow down and become less efficient. The asset becomes unsustainable over time. The cost of maintenance and ultimately repair and replacement is added throughout this chain of events.



The stages of energy maturity.In reducing energy consumption, costs, and environmental impacts, organizations need to achieve five goals. They are:

• Establish enterprise policy and programs

• Establish baselines

• Identify non-conformities and conservation opportunities

• Mitigate energy waste through corrective and preventive measures

• Institute management controls

This process starts with the adoption of a comprehensive energy continuous improvement program

To achieve these goals, enterprises typically must first travel through an energy and environmental maturity model involving five attitude stages. Best-of-breed asset sustainability products promote the organization’s energy and environmental maturity through these five stages:

• Stage 1. Consume—No comprehension of how energy and environmental management impacts operational, financial, or environmental performance, with energy waste levels of 40% or higher. Organizations in this stage simply pay the bills (and may just complain about the expense or assume it’s simply a cost of doing business and pass the cost on to their ultimate customers be they consumers or taxpayers.)

• Stage 2. Quantify—Recognition that energy and environmental management could be improved, but unwilling to provide funding.

• Stage 3. Assess—Understanding of fast return on investment and even more positive future returns.

• Stage 4. Optimize—Full understanding of financial, operational, and social benefits, with internal mandate to support.

• Stage 5. Innovate—Global view promoting innovation in energy efficiency and social responsibility to internal and external stakeholders, with energy waste dropping to less than 7.5%.

As they reach maturity levels three through five, organizations begin to understand that there are better ways to manage their energy usage and become ready to take positive steps to understand the situation and make changes in how best to manage it.



Making it formal.To secure the benefits of energy management, there is a need to formalize the policy and program of the organization. Formalizing accomplishes the critical combination of making accountability and responsibility for energy management one and the same. In many enterprises, these have been separate functions managed by different individuals or departments. If communication between or among those charged with managing them isn’t flawless and direct, the inherent relationship between energy responsibility (paying the costs) and accountability (knowing what drives the cost) may not be recognized. Creating a formal policy and program links the two together.

When formalizing, top enterprise management becomes completely involved with energy management and it can show its committed support in many ways. Management demonstrates its backing of the importance of energy management through employee involvement activities such as empowerment, motivation, recognition, training, rewards, and participation. Management teams conducting long-term planning can now include energy management considerations such as energy sources, energy performance, and energy performance improvements in their planning activities through the implementation of the energy policy.

The energy policy is the driver for implementing and improving an organization’s energy management system and energy performance within its scope and boundaries. The policy may be a brief statement that members of the organization can readily understand and apply to their work activities. Communicating the energy policy across all business levels can be used as a driver to gain and manage behavior that has an energy impact throughout the business.

Standardizing the effort.Energy management efforts need to be measured against some recognized standard if they are to be effective. The costs of ineffective attempts are too expensive to leave the structural aspects of the policy and program to chance. The risk of escalating the financial impact, the environmental impact, and the negative impact on previously committed employees who are now disaffected because of a failing program is very real and potentially damaging to the organization in many areas. For those reasons, the ISO 50001 standard is the ideal basis of comparison for measuring the success of implementing a comprehensive energy management program.



A framework for success.The International Standard, ISO 50001, is based on the Plan-Do-Check-Act (PDCA) continual improvement framework and incorporates energy management into everyday organizational practices. PDCA can be outlined as follows:

• Plan: Conduct the energy review and establish the baseline, energy performance indicators (ENPIs), objectives, targets, and action plans necessary to deliver results that will improve energy performance in accordance with the organization’s energy policy.

• Do: Implement the energy management action plans.

• Check: Monitor and measure processes and the key characteristics of operations that determine energy performance against the energy policy and objectives, and report the results.

• Act: Take actions to continually improve energy performance and the energy management system.

ISO 50001 calls for the establishment of a formal energy policy that will guide all efforts at managing and measuring energy use. It is a statement by the organization of its overall intentions and direction of the organization related to its energy performance, as formally expressed by top management. It provides a framework for action and for the setting of energy objectives and energy targets. The energy policy involves a number of aspects of energy management for the organization. It establishes the energy policy, defines organizational alignment, provides for formal energy review mechanisms, establishes baseline measurements, defines energy performance indicators, lays out energy objectives and targets, details action plans, lists operating controls and procedures, establishes guidelines for the measurement, verification, and documentation used to judge the program, and lists the management controls needed to keep the program operational.

Act

Check Do

Plan

Conduct the energy review and establish the baseline, energy performance indicators (EnPIs), objectives, targets and action plans necessary to deliver results that will improve energy performance in accordance with the organization's energy policy;

Implement the energy manage-ment action plans, corrective and preventive measures

Monitor and measure processes and the key characteristics of operations that determine energy performance against the energy policy and objectives, and report the results;

Take actions to continually improve energy performance and the EnMS.



Energy planning guides an organization in its on-going efforts to manage its energy effectively. In review, it analyzes energy use and consumption, identifies areas of significant energy use and consumption, and identifies opportunities for improving energy performance. The planning function looks at legal requirements and other requirements that the organization subscribes to as they relate to its energy use, consumption, and efficiency. The planning requires continual energy review at defined intervals and establishes, according to the now-adopted energy policy, an energy baseline, the energy performance indicators, energy objectives, energy targets, and energy management action plans.

The implementation and operation of the energy management program should mark a long-term commitment to the program and a commitment to continued efforts to reduce energy waste and increase energy efficiency. It uses the action plans developed during the planning activities to establish levels of competence, training, and awareness of energy management principles. It also establishes lines of communication about the energy management program, documentation requirements, and a control protocol for the program’s documents. Additionally, the operational control of the program is defined during this stage as well as a definition of the energy-related design factors for new or modified assets. Decisions concerning the procurement of energy services, products, equipment, and details concerning the type of energy involved are made during this time.

The success of an energy management program depends on the continual monitoring of energy usage. The key characteristics of an organization’s operations that determine energy performance are monitored, measured, and analyzed at planned intervals. Checking also involves evaluation of compliance with legal and other requirements, conducting internal audits of the program, identification of nonconformities, correction of those anomalies, corrective and preventive actions needed and taken, and the establishment of how records about the program are controlled and by whom.

Energy Policy

Energy Planning

Implementation and Operation

Use

Intensity

Consumption

Quality

E�ciency

Monitoring, measurement and analysis

Nonconformities, correction, corrective and

preventive actionInternal Audit

Management Review

CHEC

KING

CHECKING



How does the energy management program stack up?There is a need for on-going review of an energy management program to determine if progress is being made. The management review provides an opportunity to understand what is being spent on energy consumption and where it is being spent. It provides a way to measure the program’s conformance to standard benchmarks such as policies, legal requirements, regulatory requirements and other points of reference. It provides the capability to bring all of the many interdependent factors to bear on the energy policy and energy performance. The management review reveals how the energy management policy and program is either accomplishing the agreed-to goals or keys in on where they are not being met.

The management review can be broken down into five discrete measurements or indicators. They are:

• Energy consumption—a measurement of how much energy is being consumed.

• Energy use—a measurement of what is consuming energy.

• Energy intensity—the correlation of energy use to the products or services needed for business operations.

• Energy quality—a measurement of energy waste in the business process.

• Energy efficiency—a measurement of how much energy is being consumed in comparison to how much energy should be consumed.

These indicators tell the story of how well the program and policy are working to manage energy effectively in an organization.

What’s in it for an organization?The use of ISO 50001 as a standard against which an organization measures its energy management program has a number of clear benefits. It strengthens management’s focus on energy and injects organizational discipline across functional silos within the business. It creates opportunity for cultural shift and encourages commitment to the program across the company, beyond the “low hanging fruit” of easy but incomplete fixes. It introduces a systematic approach to achieving energy efficiency. It requires management commitment of resources to the energy reduction goals and can be linked directly to the organization’s profit margin. It is based on measurement and verification that support the proven effectiveness of an energy management program. And, significantly, it establishes energy as an enterprise “currency” against which operational expenses can be judged.



Infor10 Enterprise Sustainability Suite.At the foundation of an effective energy usage policy and program—beyond the manifestations of an organization’s commitment—lies the technology platform needed to gather, measure, analyze, present, and manage the extraordinary amount of data involved in a repeatable and accurate manner. Without a system equal to that task, the organization risks a less-than-optimal return on its investment of both time and money in the effort to manage its energy usage.

The Infor10 Enterprise Sustainability Suite. offers a combination of energy, asset, environmental, and sustainability management capabilities unlike any other software available. Delivering one of the most comprehensive, end-to-end energy, sustainability, and environmental technology platforms available today, Enterprise Sustainability Suite identifies areas of energy use and consumption and then prioritizes those areas as opportunities to mitigate.

This solution facilitates critical inputs to the planning process. These inputs include information from existing utility bills, sources of energy, the environmental mission, the design basis of facility, individual assets, benchmarking with peer groups—facility-to-facility,—and external benchmarking with like facilities in the same market sector all around the world. The platform’s output affects policies, baselines, targets, and objectives. It integrates into day-to-day operations and maintenance of the infrastructure, the property, plant, and equipment. The output also integrates energy into the procurement process, the design process, and behavioral change.

These capabilities are all brought together in just one application, available with easy-to-access dashboard visibility and easy-to-use analysis tools. The dashboard displays information that accurately and consistently describes energy inefficiencies, thus helping to identify opportunities to drive down operating expenses. With this technology, energy and financial managers are relieved of the onerous task of interpreting data from spreadsheets dedicated to everything from individual assets to individual facilities. Ultimately, this suite of software solutions delivers the financial and physical controls the enterprise needs to be in full control of its sustainability, energy consumption, and the asset infrastructure that underpins them.

The following chart illustrates that Infor10 Sustainability Suite addresses 24 of the 27 elements called out in ISO 50001.

Req. Description 50001 Score Infor10 Capabilities Infor10

Score4.1 General 3 Energy & Sustainability Management 34.2 Management 2 Energy & Sustainability Management 24.3 Energy Policy 1 Performance & Reduction planning 14.4 Energy Planning 6 Performance & Reduction planning 64.5 Implementation & Operation 7 Energy Reduction Demand Management 54.6 Checking 5 All 44.7 Management Review 3 Energy & Sustainability Management 3

Total 27 24



How Infor10 Enterprise Sustainability Suite measures up against ISO 50001.With ISO 50001 as the industry standard, it’s logical to ask how well Infor10 Enterprise Sustainability Suite meets the demanding and various criteria found there. Enterprise Sustainability Suite mirrors all the key elements of ISO 50001 according to the following table:

ISO 50001 Elements Infor10 Enterprise Sustainability Suite• Energy policy Helps to establish an enterprise energy policy• Organizational alignment Creates an energy responsibility/

accountability alignment• Energy review Facilitates an on-going energy review• Baseline(s) Establishes baselines for all

measurements taken• Energy performance indicators Quantifies performance indicators• Energy objectives and targets Helps to establish energy objectives and targets• Action plans Collects data necessary to create action plans• Operating controls and procedures Defines operating controls and procedures• Measurement, verification, and

documentationFacilitates measurements, verification, and documentation

• Management controls Defines management controls

In essence, Infor10 Enterprise Sustainability Suite supports ISO 50001 in some very significant ways. It drives stakeholder ROI across the entire enterprise. It establishes the process level execution critical to performance. It continuously manages energy processes as follows:

• Reduces exposure to energy costs

• Reduces carbon related emissions with disrupting operations

• Manages continual improvement of energy intensity

• Values both avoidance and savings for internal and external metrics

Additionally, Enterprise Suitability Suite enables organizations to establish the systems and processes necessary to improve energy performance, including energy efficiency, use, and consumption. It facilitates organizations’ development and implementation of an energy policy and establishes objectives, targets, and action plans which consider legal requirements and information related to significant energy use. Most importantly, it enables an organization to achieve its policy commitments, take action as needed to improve its energy performance, and demonstrates the conformity of the system to the requirements of this International Standard.


About Infor.Infor is a leading provider of business software and services, helping more than 70,000 customers in 164 countries improve operations and drive growth. To learn more about Infor, please visit www.infor.com.

Infor Corporate Headquarters13560 Morris Road Suite 4100Alpharetta, Georgia 30004 USAPhone: +1(800) 260 2640

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Disclaimer

This document reflects the direction Infor may take with regard to the specific product(s) described in this document, all of which is subject to change by Infor in its sole discretion, with or without notice to you. This document is not a commitment to you in any way and you should not rely on this document or any of its content in making any decision. Infor is not committing to develop or deliver any specified enhancement, upgrade, product or functionality, even if such is described in this document.

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EAM HIE PAPER ISO 50001: Are You Ready for the New Energy ... · Organization, a worldwide federation of national standards bodies, recently issued a new standard, ISO 50001: Energy