Creating Value

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Does Your Company Extract Or Generate Value?

 

We recently ran across an article by Gerry Valentine about business value. Specifically, Valentine discussed the idea of whether your company was extracting value from somewhere else or generating value for others. Borrowing a few questions that were posed, we decided to sit down with Jimmy and get his thoughts on the value that Distributed Energy Management brings to it’s clientele.

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Who Is Your Customer?

The CFO that needs to manage volatility in their profit and loss statement. Energy only becomes visible as an expense line-item when paying bills. But the activities that generate those bills – operations, production, CapEx investments, rebates, etc. – are hidden from view. Budget transparency is the key to management and elimination of waste.

What Problem or Need do Your Customers Have That You’re Interested in Solving?

With the consistent need to “do more with less”, C-levels need as many options and levers to continue to drive profitability and revenue. One hidden cost is the 30% of wasted energy and utilities in most businesses. Eliminating that could improve profit margins by 30-60 basis points. This becomes a significant leverage point to improve the financial position of the business that is wholly internal to the business and fully within a company’s control.

How Do You Solve the Customer’s Problem? 

Working with accounting and finance, we extract a virtual ‘utility line item’ and show the client how these costs are helping them achieve their productivity. The clarity we bring immediately reveals waste, inefficiencies, and redundancies. We create an ongoing program that helps clients root out overspending. Most importantly, we capture savings in a revolving fund and help the company reinvest it in their future with better equipment, procedures or staff.

Why Is Your Customer Better Off After You’ve Solved Their Problem?

The savings we capture in a revolving fund mean that every time we implement a cost-saving measure, the result shows up in a savings account. This shifts savings into future investments rather than disappearing into a general fund. A common thread among our client story is the improved resiliency of their organization and reduction in price volatility and risk of equipment failure. At the end of the day, the clients can focus on what they do best – growing their revenues.

What “Externalities” Have You Created While Solving the Customer’s Problem?

We are proud of coupling a financial service to incentivize the reduction of consumption. The less a client consumes while maintaining their production levels, the more profit they make. The cost savings then are reinvested to improve production levels. Our clients are able to become better, spend less money, consume less energy, and realize a better carbon footprint.

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Sound intriguing? We would love to talk further. Email inquiries@de-mgmt.com or take our brief Assessment Survey to dig deeper.