‘Energy submetering project’ is doomed to fail
unless it is
a ‘data-based operations management enablement project’.
With energy submeters getting cheaper, setting up a submetering project is a no-brainer and not a big deal, right? – Sure, if your sole goal is to spend money on new meters. It’s a different story if your goal is to create value to your business.
Though managing production without data is obsolete, getting more data does not automatically mean one gets a better hold on operations. The difference is the same as between being busy and being effective. To create value for business it’s not enough to collect lots of data and to feed it into dashboards and reports.
To be effective, data-based operations management must start by asking ‘WHY?’, not by getting more data.
Here are the key questions to be answered:
- What do we want to know about operations?
- What is the value of knowing the answer?
- What is the cost of not knowing the answer?
If the value of answering the question is significant for business, then it’s time to assess ‘HOW?’:
- What data do we need to answer the desired question?
- What data do we have already?
- What data must be collected additionally?
- How will we derive answer from the data? Who will do this work? How often?
Finally, the sacramental question – ‘HOW MUCH?’
- What is the cost of installing meters, maintaining meters, collecting and storing data, processing data into required answers?
- Does value of knowing answer exceed the cost of obtaining it?
If the above analysis shows value to exceed cost then we can proceed to installation of meters, collecting data and processing it into answers.
Done any other way, a submetering project is doomed to produce costs only. Meters can be installed, data will flow, dashboard will show pretty graphs, people will be busy churning data and holding meetings, and reports will collect digital dust.