That sounds unbelievable to anyone who has already been doing a good job of managing energy and maintenance.  So, how would you do it with Verisae?

• * Energy - Through improved energy management you can save up to about 12 to 15% of your current energy cost.
• * Maintenance – Through improved maintenance management you can save about 12 to 15% of your current maintenance cost.
• * Energy & Maintenance - By better managing the interrelationships between both energy and maintenance, you can shave another 5% off both your energy and maintenance costs.

The amount you can save will depend on just how sophisticated you are today. If you’re already doing most of the things we recommend, your savings may be lower than 35%.

If you believe you’re already highly sophisticated, how much improvement can you reasonably expect?

Of the hundreds of organizations we’ve met with, we have yet to see a single one that does everything we recommend to the degree we suggest.

For example, most big organizations do a very poor job of coordinating or orchestrating the management of energy and maintenance. This means virtually all can reduce both energy and maintenance cost by at least 5%.

You can achieve another 5% by improving on how you do the other things we recommend.

This is why we believe every single large, complex organization can cut energy and maintenance cost by at least 10%.

What might savings of this magnitude mean to your organization?

Let’s look at the example of SaveMost Supermarkets, a fictitious retail grocery chain that we’ll use as an example. The company generates $6 billion in annual revenue. The illustration here focuses on a grocer. A similar analysis is valid for other industries where complex organizations consume a lot of energy and maintain many pieces of equipment.

Like SaveMost, the typical North American retail grocer spends about 1% of revenue on utilities and 2% of revenue on maintenance. For SaveMost, this comes to about $60 million a year on utilities and $120 million on maintenance.

Energy typically accounts for 90% — or more — of utility cost. And electricity cost is about 94% of energy cost. So SaveMost spends about $50.76 million on electricity alone.

A 10% reduction of electricity cost would save the company about $5.08 million a year. A 10% reduction of maintenance cost would save another $12 million a year, for total annual savings of about $17.1 million.

If SaveMost earns a net profit margin of 2% after taxes — as the average retail grocer does – then the company nets about $120 million a year.

Savings of $17.1 in energy and maintenance cost would increase net profit by about 14.2%.

Let’s put that in perspective. For SaveMost to generate enough additional revenue to contribute $17.1 million in additional profit, they would have to increase sales by about $854 million.

And what would they have to do to generate that much additional revenue?

The top 60 North American grocers generate between about $5.8 million and $73 million in annual revenue per store. The average is about $28 million.

If we assume SaveMost generates close to the average revenue per store, they would have to build about 30 new stores to generate $854 million in additional annual revenue.

And how much would that cost?

To build a new grocery store in North America costs an average of about $85 per square foot. This does not include the cost of land nor of refrigeration equipment and product inventory that go into a new store.

For a new supermarket of 60,000 square feet, the new-construction cost alone would be about $5.1 million. To build 30 new stores would require an investment of $153 million. (You would also have to add the cost of buying or leasing land and stocking the store.)

Which is likely to make better financial sense for SaveMost’s managers and their shareholders?

1. Should they build 30 new stores at a total cost of more than $153 million?

2. Or should they invest a tiny fraction of that amount in technologies that can reduce energy and maintenance costs by 10% to 30% within a few months?

To discover specific ideas on how you can achieve these energy costs reductions, sign up to get a free 10 part e-mail series packed full of energy management insights.