Monday, January 3rd 2011

What fantasy football can teach us about energy management

We live in a time when the thirst for information is unquenchable. And as appetites for news, facts, and stats become more voracious, the ways we find, share, slice, and dice information have grown increasingly robust. If you’ve ever been in a fantasy football league, you know what I mean.

The background you need to become an expert on every NFL player in the game is at your fingertips. Whether you’re watching TV, reading blogs, or following teams with mobile apps, there’s no shortage of stats about players, their highs and lows, their injuries, and their chances in future match ups. The amount of information out there on just the single topic of fantasy football is mind boggling.

But the focus on manipulating data doesn’t stop with sports. Every industry is embracing the power of numbers, energy management included.

Early on, managing energy for multifamily properties was all about getting utility bills paid. Properties received their electricity and gas bills, logged them into the accounting ledger, paid them, and went on their way worrying about occupancy and capital improvements.

But as property owners voiced the need to provide better margins to investors, energy management pros began to understand how they could use the bill payment process to capture and analyze important data about facilities that pinpointed opportunities to take actions to improve operational efficiencies and avoid measures that can suck energy savings away. They began to understand the power that energy consumption data has when you look at it from every possible angle.

Today, the most advanced multifamily companies are looking for ways to analyze each data point for total energy management, up to and including total expense, and reductions in usage and cost. These companies want ways to manage their energy services across a broader spectrum to include water, gas, electric, and trash. And on top of that, they need to manage energy services as stewards of the environment, examining the data to figure out where and how they can be using less. A noble and worthwhile cause, if only we knew what we were looking at (and for).

Have you ever really looked at your energy bill? I mean REALLY looked at it? Your library of energy bills might be one of the most rich and complex databases a multifamily owner will ever encounter when operating their business. Let’s do the math. Just one bill contains approximately 75 firm and derived data points, such as usage, expense, and daily effective rates, that should be used by some portion of your company to manage multifamily energy spend, be it financially or operationally.

If each property received 40 bills a month, that’s 3,000 separate pieces of data. Over 50 properties there are 150,000 data points for the month. Annually that is 1.8 MILLION DATA POINTS for a multifamily owner of 50 properties. What does that data represent? For that matter, what is data? And why is it important to energy management?

The Dictionary of Computing (yes, there is a dictionary of computing) defines data as numbers, characters, images, or other methods of recording, in a form that can be assessed by a human or (especially) input into a computer, stored and processed there, or transmitted on some digital channel. Data on its own has no meaning, only when interpreted by some kind of data processing system does it take on meaning and become information.

In fantasy football, the data in question are a player’s rushing yards, receiving yards, injury report, and match ups. When those stats and facts are processed by the manager, they can decide who’s in and who’s out for next week. Similarly, the hundreds of thousands of data points that multifamily owners are faced with must be translated into information that a number of stakeholders can use to take action.

The accounting department wants to see expense, past due, and late fee information to know that finances are in order. Operations needs information about usage and variances in rates to audit for operational inefficiencies as subtle as an unauthorized change in boiler settings. And they’re all getting the answers from utility bills.

Our job at AUM is to slice and dice the mountain of data to provide clients with this level of insight. And giving them that lets us make joint decisions about how to better manage their energy spend and accomplish the sophisticated goals that this age now demands. We make sure the information gleaned from the data we gather is relevant to the cost cutting and sustainability questions that the multifamily industry is asking.

Over the next couple of months we’ll be explaining exactly what those questions are, and how to come to the answers that will help multifamily businesses keep pace with the industry. You’ll be shocked by the problems and solutions that were uncovered by taking a close look at the numbers that have been under the nose of the industry for decades.

First we’ll tackle fundamentals of the energy management process: How to quantify your energy usage and establish spending patterns. Have a specific data question you’d like us to answer? Leave it in a comment here. Was your fantasy team a mess again this year? Get in line.

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Posted by Bob Malpasuto

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