Saving Energy Step 3 ? Towards a Variable Energy Bill

Do you remember the days when energy was so cheap we paid the bill almost without thinking about it? Things have changed and we have the additional duty of reducing consumption to help save the planet. This is the third article in our mini-series on saving energy. It follows on from the first that explored implementing a management system, and the second listing practical things to implement on the shop floor. These open up the possibility of the variable energy bill we expand on as follows.

If ?variable energy bill? sounds strange to you, I used the unusual turn of phrase to encourage you to view things in a different light. We need to move on from the ?pie chart? mentality where we focus on the biggest numbers like materials, facilities and labour, and zoom in on energy where we can achieve similar gains faster with less pain. But first, we need to see beyond the jargon that governments and consultants love, and get to grips with the reality that we can vary our energy bill and bring cost down.

As executives we recognise this, although other pressures distract us from accepting it as a personal goal. And so we delegate it down the organisation to a level where it becomes ?another crazy management idea? we have to follow to stay out of trouble. I read somewhere that half the world?s organisations do not have energy as a defined objective to monitor in the C Suite. No wonder commerce is only pecking away at energy wastage at a rate of 1% per year.

Find out where you are ?spending energy? and relate this to your core business. If there are places where you are unable to make a connection, challenge the activity?s right to exist. Following the energy trail produces unexpected benefits because it permeates everything we do.

  • Improved product design reducing time spent in factory
  • Streamlined production schedules reducing machine run times
  • Less wear on equipment reducing costly maintenance
  • A more motivated workforce that is prouder of ?what we do?

As you achieve energy savings you can pass these on in terms of lower prices and greater market share. All this and more is possible when you focus on the variables behind your energy bill. Run the numbers. It deserves more attention than it often gets.

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Spreadsheet Woes – Ill-Equipped for an Agile Business Environment

These days, crucial business decisions have to be made in a split second. However, the quality of these decisions hinges quite often on timely, insightful information and relevant business reporting.

How effective is your business reporting solution in providing you with the information you need at the time you need it?

Chances are, like 75% of small and medium businesses, your company is using spreadsheets. True, spreadsheets are the most common go-to solutions for on-the-fly forecasting, but they may not be your best option for presenting information that require consolidation and in-depth analysis and involve a lot of number crunching, especially with critical data at stake.

Furthermore, spreadsheet-based reports are rarely produced in a timely manner. In today?s fast evolving business environment where flexibility, mobility, and timeliness are the order of the day, this simply won’t do.

Let’s take a look at the particular areas where spreadsheets fall short when it comes to providing dynamic and sound financial reports:

Collaboration

With rapidly changing market conditions, organisations have to conduct budgeting, forecasting, and planning more often. Hectic schedules and geographical distances aren’t a hindrance though, because technologies like the Internet, advanced telecommunications and mobile devices can put instantaneous collaboration at everyone?s fingertips.

But collaborative activities in a dynamic setting can only succeed if all participating individuals are given secure, real time and simultaneous access to the same relevant information. This way, every change made is automatically consolidated and projected unto the bigger picture for everyone to digest.

Alas, spreadsheets aren’t built for this.

Cost Efficiency

Whether we’re in a recession or not, cost efficiency has to be taken into consideration. Are spreadsheets really the cost-effective solution?

Think ?time is money?. With the length of time needed to prepare data, establish controls, consolidate reports and distribute copies, you’ll realise how expensive spreadsheets actually are.

The ability to innovate in a changing economic environment and limited resources – a valuable derivative of agile practices – can give your company a very significant advantage. But dedicating so much time on spreadsheet management can strip your organisation of room for innovation.

Quality of Reports

Business empires rise and fall on the power of relevant information. At the end of the day, top management should assess their sources of key performance reports, planning tools and budgeting applications using these parameters:

  • Does your financial reporting system give you the right information right when you need it?
  • Do the reports allow you to look beyond the numbers to spot trends or forecast changes in the market?
  • Do they furnish enough significant data for you to make informed decisions in good time?

Spreadsheets weren’t designed to analyse data on the enterprise level. As a result, spreadsheet reports often take far too long to prepare and more importantly, may lack the dimension and depth that are crucial in decision making.

Data Reliability

We’re all familiar with the risks associated with spreadsheets. This error-prone UDA can provide inaccurate information simply because of a broken link, an incomplete range, a deleted number, or an incorrect formula. In an active business scenario where data manipulation has to be done under constant time pressure, the risk probabilities escalate.

As they always say, ?If anything can go wrong, it will?. With spreadsheets, a lot of things could go wrong. Is this the kind of tool you?d like to work with when making fast, crucial decisions? If you’re still using spreadsheets, then you?d best forget about dynamic reports and rolling forecasts.

Inability to adapt to personnel turnover

A key challenge in maintaining the spreadsheet system is picking up where another left off. A user would find it difficult to debug, revise, or analyse a spreadsheet system he developed himself and the process becomes doubly complicated if or when another person takes over.

Starting from scratch is painfully counterproductive, so that a newcomer has to spend hours figuring out the original entries in the spreadsheet and the reports it yields.

While no one is indispensable in any organisation, it’s pretty much accurate to say that if a spreadsheet ?developer? leaves, it could momentarily halt the production of key finance reports. In a fast changing business landscape, such failure to monitor performance at critical times could sound the death knell for your company.

More Spreadsheet Blogs


Spreadsheet Risks in Banks


Top 10 Disadvantages of Spreadsheets


Disadvantages of Spreadsheets – obstacles to compliance in the Healthcare Industry


How Internal Auditors can win the War against Spreadsheet Fraud


Spreadsheet Reporting – No Room in your company in an age of Business Intelligence


Still looking for a Way to Consolidate Excel Spreadsheets?


Disadvantages of Spreadsheets


Spreadsheet woes – ill equipped for an Agile Business Environment


Spreadsheet Fraud


Spreadsheet Woes – Limited features for easy adoption of a control framework


Spreadsheet woes – Burden in SOX Compliance and other Regulations


Spreadsheet Risk Issues


Server Application Solutions – Don’t let Spreadsheets hold your Business back


Why Spreadsheets can send the pillars of Solvency II crashing down

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IT Security and the Threats from Within

When the economy makes a downturn, companies, then eventually, employees suffer. Now, I’m sure you’re wary of frustrated laid-off employees stealing valuable data. Who knows? That information might end up in the hands of your competitors. Then as if that threat weren’t enough, there may be jobless IT specialists who turn to rogue activities either to earn a quick buck or simply out of lack of anything productive to do.

That’s not all, as we’ve got more news for you. When we think of IT Security, what instantly comes to mind are hackers and acts laced with mal-intent. However, a recent worldwide survey on IT security showed organisations were more inclined to expect data leakage as a result of accidental exposure by employees (45%) than of anything maliciously performed by an external entity (15%).

If you’re not aware of this, you’ll be focusing your spending on protection against incoming attacks while exposing your innards through accidental leakages. Our solution? While we’ll naturally provide your data with protection from outside threats, we’ll also put special attention in protecting it from the inside.

The defences we’ll put up include:

  • Data Loss Prevention
  • Network Security
  • Firewalls
  • Malware
  • Authentication and Access Control
  • Mobile Security
  • Forensics
Systems Integration as a means to cost reduction

System integration in an organisation refers to a process whereby two or more separate systems are brought together for the purpose of pooling the value in the separate systems into one main system. A key component of process consolidation within any organisation is the utilisation of IT as a means to achieve this end. As such, system integration as a means to cost reduction offers organisations the opportunity to adopt and implement lean principles with the attendant benefits. The implementation of lean techniques requires an adherence to stated methods to facilitate the elimination of wastage in the production of goods and services. In summary, the lean philosophy seeks to optimise the speed of good and service production, through the elimination of waste.

While analysing some of the traditional sources of waste in organisational activities, things like overproduction, inventory, underutilised ideas, transmission of information and ideas, transportation of people and material, time wastage and over-processing stand out. The fact is that companies can eliminate a significant portion of waste through the utilisation of IT to consolidate processes within their organisation.

Adopting lean principles calls for the identification of all of the steps in the company value stream for each product family for the purpose of the eliminating the steps that do not create any value. In other words, this step calls for the elimination of redundant steps in the process flow. This is exactly what the utilisation of IT to consolidate processes offers a company. For instance, the adoption of a central cloud system across a large organisation with several facilities could increase efficiencies in that company. Such a company would drastically reduce the redundancies that used to exist in the different facilities, eliminate the instances of hardware and software purchase, maintenance and upgrade, modernise quality assurances processes and identify further opportunities for improvement.

Perhaps, from the company’s point of view, and from the perspective of lean process implementation, the most important factor is?the effect it has?on the bottom line.’reducing the number of hardware, eliminating the need for maintaining and upgrading hardware, removing the necessity for software purchase and upgrade across facilities also contributes to a significant reduction in operational costs.?This reduction in the cost of operations leads to a corresponding increase in the profit margin of the company.

Applying system integration as a means to cost reduction can also lead to the reduction in the number of people needed to operate the previous systems that have been integrated into one primary unit. Usually, companies must hire people with specialised knowledge to operate and maintain the various systems. Such employees must also receive special training and frequent ongoing education to constantly stay informed of the latest trends in process management. With the integration of the system, the number of people needed to maintain the central system will be significantly reduced, also improving the security of information and other company trade secrets.

Based on an analysis of the specific needs that exist in a particular company environment, a system integration method that is peculiar to the needs of that organisation will be worked out. Some companies may find it more cost-effective to use the services of independent cloud service providers. Others with more resources and facilities may decide to set up their own cloud service systems. Often, private cloud service system capabilities far exceed the requirements of the initiating company, meaning that they could decide to “sell” the extra “space” on their cloud network to other interested parties.

A company that fully applies the lean principles towards the integration of its systems will be able to take on additional tasks as a result of the system consolidation. This leads to an increase in performance, and more efficiency due to the seamless syncing of information in a timely and uniform manner.

Companies have to combine a top-down and a bottom-up approach towards their system integration methods. A top-down approach simply utilises the overall system structure that is already in place as a starting point, or as a foundation. The bottom-up approach seeks to design new systems for integration into the system. Other methods of system integration include the vertical, star and horizontal integration methods. In the horizontal method, a specified subsystem is used as an interface for communication between other subsystems. For the star system integration method, the subsystems are connected to the system in a manner that resembles the depiction of a star; hence, the name. Vertical integration refers to the method of the integration of subsystems based on an analysis of their functionality.

The key to successful system integration for the purpose of cost reduction is to take a manual approach towards identifying the various applicable lean principles, with respect to the system integration process. For instance, when value has been specified, it becomes easier to identify value streams. The other process of removing unnecessary or redundant steps will be easier to follow when the whole project is viewed from the whole, rather than’the part. Creating an integrated system needs some?patience?in order to work out kinks and achieve the desired perfect value that creates no waste.

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