Digital Enterprises … Funded by Energy

I tend to be an optimist. I find it essential when working on first-of-a-kind innovations to believe that anything is possible.  And I’ve been very fortunate to work with amazing colleagues, partners and clients who are willing to take on new challenges and lead industries in new ways.

Despite this, I’m still always concerned when technology requires massive changes in human behavior to create value.  Retail CIOs probably encounter this more than others. How many vendors tell you that they can increase your “share of wallet” or “customer conversion rate” by some significant percent if you just deploy their technology? 

In my last post, I discussed how intelligent LED lights can provide sensors that turn buildings and spaces into intelligent environments. These environments enable internal tech teams, external consultants and outside entrepreneurs to leverage new types of data to create solutions and drive outcomes.

Now, I fully believe that these digital enterprises should provide better shopping experiences, better work environments, and better logistics management. It seems pretty clear to me from the demonstrations I’ve seen by experts (like Serraview in office space optimization, Mowingo in retail services and others) that people a lot smarter than me know how to use this data very effectively.

And while I am actively investing in partnerships with great solution providers like these, I am also working on creative ways to remove barriers to entry. Formulas and financial models where customers can invest in intelligent LED infrastructure, the framework for digital outcomes, in a way that has the infrastructure paying for itself. The secret lies in tackling something that flows through their footprint, and their bottom line, every hour of every day: energy costs.

Think about how you use energy today.  For most businesses, it is simply a necessary cost to operate a building or a campus.  We can try to reduce our consumption by adjusting temperature or humidity levels, but those adjustments tend to be fairly course grained.

Now think about how you could change this if you used the sensors in efficient intelligent LED lights, for example, to understand what was going on in the space below them. With a detailed understanding of the environment (think: temperature, humidity, light level) as well as how people are moving in the space (think: occupancy sensors, beacons and indoor positioning technology), businesses can start to adjust their energy usage to ensure great performance where people are while limiting energy expenses where people are not.

There have been a lot of great examples of this type of solution creating value. A partner was recently recounting a story of using occupancy sensors in their office building to determine that nearly 50 percent of their energy use was going to desktop computers that were left plugged in over night (15-16 extra hours per day) without anyone using them!  You can imagine heating empty buildings or keeping lights on too bright in aisles that have no people.

With intelligent LED sensors, businesses have the power to address all of these inefficiencies. And (getting back to optimism!) what I really like about these values is that they can be demonstrated and don’t require any behavioral change!  The energy cost savings from deploying an efficient, multi-purpose, intelligent, LED-based digital infrastructure can pay for that infrastructure through an as-a-service model.

So why does this matter?

Well if we go back to our retail CIOs, I don’t want to be the one to walk in and tell them that they can gain a 20% increase in sales by deploying sensors in lights. There are a lot of steps between here and there to make that possible. 

But I would like to show them how they can pay for a digital platform with energy savings. And once they do, they will have an open platform for experimentation, innovation, and testing that they can leverage for a lot smaller marginal cost. At the same time, those initial energy savings will continue to improve bottom line performance in perpetuity.

Once the infrastructure is in place, CIOs can experiment with different software options for retail growth or office productivity or manufacturing efficiency—even funding these initiatives with energy savings. They turn a complex hardware and software system problem into a pure software experiment. And those are much easier to test, learn from, and scale.

Having already seen how so many great entrepreneurs are building solutions that leverage intelligent LED data, I am confident that they will help business leaders of all types create new ways to generate value from their digital enterprises.  But I will leave those value propositions to the experts in each field. My goal is to help pay for creating a digital enterprise with hard, bottom-line savings that don’t require any changes to human behavior. Energy savings allows us to do that—even without a finance degree.

PREVIOUSLY on Route Fifty: 

• "Building the Digital Enterprise: Intelligent Lighting Isn’t Just for Cities"