My utility needs an EMS: Should I build it myself or outsource?

So, you’re responsible for new product offerings at a utility – or maybe you’re responsible for operational efficiency at a big corporation. And, as a team, you’ve decided to highlight energy management as a key new area of growth and/or to reduce your own internal energy consumption.

But, where do you start?

What do you need to put before senior management to make sure this gets over the line?

How can you be sure the approach you choose isn’t going to backfire later?

You will find the answers to all these questions below:

As you might have already seen, there are lots of options out there that might seem overwhelming. But, we’ve put together this article of advice using our own experience of working with many companies like yours. We hope this is helpful and always feel free to get in touch, we’re happy to share our knowledge even further, even if it’s just a friendly conversation.

Why would a utility want to offer energy management solutions? Read more about B2B customer switching and how retail utilities can stay ahead of the competition.

What are my energy management solution options?

If you’ve set yourself some goals and read about what’s involved in an energy management project, you’ll know that you’re going to need 3 main components:

Energy consultancy services to help you set objectives, monitor/analyse consumption and propose the best changes to make.
Additional hardware for in-depth monitoring, not only for energy consumption but also for understanding comfort, air quality, temperature, occupancy, etc.
EMS software to provide monitoring and analytics capabilities.

How do you choose the best approach for each?

For energy management consultancy, this will be a choice usually between an in-house team or outsourcing to a specialist agency. Outside agencies do this work really well (it’s their bread and butter), but in-house teams might know your organisation better. In general, unless you already have in-house expertise, it is likely more cost-effective to outsource this work, especially if the consultants can provide some sort of savings guarantee.

For EMS hardware and metering, the most important takeaway is that you need to keep your options open. Don’t tie yourself into an exclusivity contract with 1 supplier.

For EMS software, it gets a little more tricky. You have a few options here, each with its pros and cons, and we’ll go into these in more detail below. Here are the 3 main approaches:

Develop a software monitoring/analytics EMS from scratch in-house using your internal development resources
Outsource to use a large global technology solutions provider (think of big international players or national technology incumbents) to develop a solution from scratch for you
Outsource and work collaboratively with a leading EMS provider with subject-matter expertise

What do I need from an EMS software?

As we’ve seen, the approach to choosing an EMS software is a bit more complicated than the other components, so let’s examine each option in detail, and investigate what you should be thinking about to make the right decision.

But first, let’s look at what you want out of an EMS software – of course, this list might change depending on your organisation, but most of these should apply to you:

Great user experience: You want this EMS to provide value to you (and/or your customers) through a great user experience based on visualization, reporting and alerting engines, up to date with the regulations (energy tariffs, energy efficiency standards, etc), and showing great usability.
Future-proof: You want your solution to be useful not only now, but also well into the future. A tool that improves over time, adding new features and making improvements to user experience is essential.
A differentiator: You want this top-of-the-line solution to look like a product your company offers – the right corporate colours, logos, etc.
Reliability: You need your staff and clients to know your tool is available 24/7 with support to go along with it.
Control: You want to be able to influence what your users and clients see and use, and you could even build in different product offerings and upgrades into your solution.
Secure and safe: You need your software to protect your and/or your clients’ data and have rigorous checks in place to ensure authenticity and protection.

Which questions do I ask when considering my approach to EMS software development?

Inhouse, from-scratch EMS development solution

Developing your own in-house solution should give you all of this, right? Well, maybe, and even if it did, it would come at not only a significant cost but also a significant lead time. How long?

In our experience of speaking to our customers, we’ve heard time and again that the time estimate might have been something like 6 months, but actually, the project development has blown out to 2 years, and the EMS doesn’t even have all the features it was supposed to have.

So, the energy management project hasn’t even started, and you’ve lost 18 months of savings (not to mention paying several developers for this time period), and it looks like you’re not going to get the product you want. We calculate that as several €1,000,000s before you even start. How easy is it to get that sort of funding approved in your organisation?

Outsourced, from-scratch EMS solution with a large multinational corporate partner

So, what about trusting this whole project to one of the big guys? You know for sure your management is not going to have a problem working with a bankable partner like this, and surely they’ve done this (develop an EMS for a company like yours) before, right? Well, that’s a good question to ask them, and then follow it up by asking how long the lead time was, how long their customer used the custom-designed software, and what targets/payback the customer was able to reach.

If you’re going this route, you will also want to discuss with your partner what their system architecture will look like for this new EMS they’re building for you.

Will it be built from scratch?
Or can they use part of an existing platform that will still meet your needs?
Will it be on-premise or in the cloud (on AWS, Google Cloud, etc.)? You might already know that an on-premise solution is fraught with more nightmares down the track. There’s a reason why 95% of IT teams have moved critical infrastructure to the cloud.
What about new ongoing product development? How much will that cost, and will the initial solution be built in a way to allow expansion? Will the EMS be updated with new data sources and new functionalities in accordance with market trends? (new IoT data sources, solar power integration, energy storage technology, etc.)?
How flexible will they be if priorities change? Do their organisations support an agile approach to software development? Or once you sign a contract, is there no room for change?
Even if you have a cloud solution, what will your annual hosting and maintenance costs be? Make sure that includes server costs plus sysadmin engineers who will need to ensure the system is running 24/7 and meeting the service level agreement (SLA) requirements.

Outsourced, ready-to-go EMS solution with an EMS provider

Let’s explore another way – leveraging the years of experience and development of an existing cloud EMS provider to use their platform but customise it to make it your own. At this point, you might be rejecting this off the bat, because of some or all of the following:

They’re a tiny company with <100 people and they’ve only been in business 10 years – my managers won’t sign off to use them with such a large project
I don’t want to re-use a platform already available – I want to be unique!
They’ve probably never worked with an organisation like mine – they won’t understand the competing interests between departments, the layers of bureaucracy and how to help achieve our corporate shareholder-driven goals, and their platform probably can’t handle our 1000s of buildings.
There will be a recurring cost that we could avoid or reduce if we develop our own in-house solution.

All we can say is think again – let’s explore in more detail. If you ask any leading EMS provider, they’ll probably have worked with someone like you already. In DEXMA’s case:

We already work with several of Europe’s leading multinational utilities, ESCOs and energy consultancies to provide their teams and customers with our software for all our users. In most cases, we went through rigorous RFP processes with a lot of due diligence and market comparisons to be chosen as a provider.
We have 100,000+ buildings actively sending real-time readings to our platform, with 1,000s of users logging in regularly. Our platform is scalable well beyond this – we’re ready for you.
But, it doesn’t look like our software to our users. It’s branded with our partner’s corporate colours, images and logos.
We’ve integrated our platform with many other major cloud tools, and with our open API, you can easily integrate DEXMA with your existing ERP, CRM, invoicing software, etc.
We can enable single sign-on (SSO) so your team members use their corporate logins for our portal.
We work with you to produce new features which can be used just like any other part of our platform, thanks to our Energy Apps Market.

But on top of that, you’ll benefit from:

1. You can get started right away with a fully functioning platform the day that you decide to use a specialist EMS provider.

2. There are no worries about maintenance and hosting costs etc., it will all be included in the cost of your license.

3. As long as you’ve chosen a trustworthy provider, security and data protection will already be built into the DNA of the solution.

4. You will benefit from your partner’s innovation and any ongoing product improvements, often included in the price you pay. Remember, you want to stay ahead of the pack throughout your digital transformation. In DEXMA’s case, we’re pushing out updates with improvements or new features almost every week! Upgrades are pushed out automatically to all users, which means upgrades occur and with little fanfare and no effort on the part of the user organisation. In addition, our SaaS offering requires no “maintenance” or tuning by your IT team.

5. You’ll get more than you even asked for to begin with – even thought about using artificial intelligence (AI) to help you find anomalies in your 1,000s of buildings (because surely your team can’t do that manually)? An EMS providers standard platform might already have it.

6. Want something specific for your customers? You can completely outsource the development of this new feature to your EMS provider. They’ve done this countless times before and know what they’re doing. Or, if you choose an open EMS with an API, you can undertake some co-development – use your own developers to do this work in tandem with support from the EMS provider.

7. Priorities have changed and now your corporate strategy means you need to focus on tonnes of carbon saves, rather than kWh, but your chosen platform doesn’t quite show that in the right way? If you’re working with an EMS provider, chances are they’ll have something to help straight away, and will likely be more flexible to redefining any future developments away from previous agreements towards making you more successful.

8. You won’t be spending €1,000,000s – your bill will be somewhere around orders of magnitude less than an in-house development or building a completely new platform with a major IT provider, and you’ll be flexible to switch solutions whenever your contract allows it. From a cash flow perspective, that’s a huge difference.

Conclusion

Wow, that was a lot of information right there, so let’s recap. Energy management projects are increasingly becoming a priority for large corporations, whether they do this in-house or outsource the services to an energy savings specialist company. There’s also hardware and software to consider, and your approach to the software component is fundamental.

Developing a from-scratch solution either in-house or with a large IT or consulting company might sound like a good way to go, but the cost, lead-time and inflexibility of these solutions make them something to question in-depth before moving ahead.

On the other hand, specialist EMS vendors like Spacewell Energy (Dexma) are becoming the EMS for energy managers, just like Salesforce is for salespeople. Your organisation probably outsources its sales tool to Salesforce or a similar provider already – why not your EMS too? Save yourself the stress and start on your energy intelligence management journey today!