Scheduling Chronicles

Controling Energy Costs in a Tough Economy

I am a firm believer that a tough economy creates challenges for some but opportunity for others.  Unfortunately many companies today are finding it hard to reduce costs without having layoffs.  But what amazes me is that desite these cases of mass layoffs, many organizations aren't changing their operations.  Conisder this fact I uncovered in a recent Industry Week article titled Take Action or Energy Cost Will Soar as You Reduce Production:

"Many factories are scaling back production and experiencing remarkable increases in the energy component of conversion cost. The cause is clear and preventable. You can avoid this pitfall by taking immediate action to reduce the fixed component of your energy consumption. This is a common opportunity (and problem).

"Failing to take action caused a dramatic increase in energy per unit of production at a large Chicago-based operation last fall. Within that production facility, a 65% reduction in output resulted in only a 10% reduction in energy usage; just 10%! That small reduction in energy, paired with the large reduction in production, resulted in a 257% increase in energy per unit of production."

There is no doubt production loss will affect the botton line but this is also an example of a situation where, if production and workforce is reduced, there is an opportunity for further reductions in energy costs.  For example, if the HVAC system were tied to an automated scheduling application, the heating and cooling of a location could be adjusted quickly and easily based on when the workforce is actually at work. 

Let's take this one step further.  By tracking the utilization of the available workspace, companies are able to consolidate workspace into a specific heating zone and could then "hibernate" the other available space.  This eliminates the need to heat or cool unoccupied space, making it only available when the size of the workforce on-site dictates it, heling to significantly reduce unneccessary energy costs. 

This is just one of the many examples of how companies can turn a bad situation into - well, one that isn't as bad as it could be.  The above mentioned article points to a number of potential energy saving examples and while many of the examples in the article refer to plan production, they actually translate quite well to any work environment.  But regardless of the industry, the message is the same.  A change in work environments should cause companies to look into altnernative workspace or HVAC integration with scheduling software as innovative ways to save money.  Sure, times are tough but there are opportunities to reduce costs though efficiency using wokrplace business intelligence - as long as you're willing to leave no stone unturned to find the right solution for your work environment.

The Long Term Financial Viability of SaaS

There are conflicting reports over the short vs. long term financial viability of SaaS applications.  One train of thought is that the SaaS model provides short and long term ROI because of the predictability cost, the elimination of large upfront cost to deploy the application, and the ability to manage licenses more freely.  The other side of the argument is that after year two, the ROI of SaaS declines because you're still paying for the software while standard on-premise applications are paid for.  The argument is similar to leasing vs. owning a car.  But that's where the similarities end.

What many SaaS detractors neglect to mention is the cost of maintenance. Unless you purchase an application as-is and plan to only use that version then maybe the on-premise model works for you.  But if you need technical support or plan to upgrade the software over time, you need to have an active maintenance contract.  So there's an ongoing cost that needs to be considered.

On the other hand, the SaaS model is essentially a built-in maintenance plan - but so much more.  You're not installing the software on your own servers either for the initial release or subsequent upgrades - it all happens automatically by the SaaS vendor.  Further, support costs are typically built in to the annual SaaS fees, and let's not forget the added benefit of leveraging new functionality in new releases that happen seamlessly.  But the bottom line is, as Darren Wesemann points out in his blog, SaaS is considered an operational cost, a preferred option for most organizations.   

Identifying the Keys to a Green Corporate Strategy

I found an interested article the other day in Environmental Leader written by Rich Lechner, VP of Environment and Energy at IBM titled "The Seven Pillars of a Green Corporate Strategy."  The article rang true to me because his messages are very similar to the ones I espouse.  In essence, the bottom line (pun intended I suppose) is the green strategy your organization implements must include a strong cost saving component as well.  We all want to be environmentally sound but any corporation must ask "at what cost?"  As Lechner points out "$1 in energy savings can often drive an additional $6 to $8 in operational savings."  And the reasons are (relatively) simple: If you are able to reduce your energy consumption, aren't you, by default, reducing your energy costs?

Lechner identifies his seven "pillars" of the corporate green strategy as:

• Strategy: Creating an environmental strategy as part of a larger corporate social responsibility initiative can produce beneficial financial and environmental results.
• People: Implementing alternative workspace, providing more online collaboration tools and creating other environmentally-friendly work environments can help attract and retain top talent.
• Information:As we like to say here at PeopleCube, you can't manage what you can't measure.  Knowing how to maximize utilization of shared resources, workspace, and other mission-critical areas of your business can help you better manage costs today - and tomorrow.
• Products: By understanding the environmental impact of their products enable companies to adjust their manufacturing processes.  Further, companies can leverage new technology that provides greater energy consumption intelligence.
• Information Technology:Reviewing the energy consumption of IT related resources can surprise many people.  In fact, some companies are turning to software-as-a-service (SaaS) as a way to reduce costs and carbon emissions of their IT infrastructure.
• Property: By leveraging technology to understand carbon emissions and real estate utilization, you're able to make adjustments to reduce real estate and energy costs. 
• Business Operations: Similar to above.  Organizations need to change their operations processes to reduce costs and carbon footprint.  But in order to do so, you first need to track, measure and analyze existing use and compare it against targeted environmental benchmarks.

As Lechner indicated, going green isn't as difficult or as costly as you might think.  With the right approach, the right planning, and the right technology, you can quickly and easily be on your way to greener bottom line - in more ways than one.

Forrester Sees Plenty of Sunshine in the Forecast for Cloud Computing

Forrester Research issued a new report recently that highlights the expansion of SaaS offerings into new areas.  While the early success came from CRM and human capital management markets, SaaS vendors of collaboration software, web conferencing and IT service management are seeing significant growth as well.

According to Liz Herbert, senior analyst at Forrester Research and coordinar of the study, "SAAS applications have advanced beyond early market applications in human resources and CRM to become a game changer in the enterprise software market.  SaaS adoption continues to increase, and it is now relevant for a wide array of applications. This new research provides strategic direction to end users evaluating SAAS technologies and planning their next decade of investments."

Growth of Digital Signage Market Set for 2009

The US digital signage market is expected to grow more than 33% in 2009 over 2008 revenues of $700 million.  That's the latest in a report from Zippy Aima of research firm ABI Research.  As Michelle Masterson of ChannelWeb reports, the growth will likely be seen in tlaw enforcement and government in addition to the more traditional markets such as retail, education and hospitality.

This growth is due in large part to the shift from standard advertising that many feel has become too "static" and broad in appeal."  Another factor that is making digital signage more attractive is the reduction in the price of screens as well as the movement towards a software-as-a-service model for many vendors which provides customers with greater flexibility from a functionality and cost standpoint.

PeopleCube, York Telecom and Featured Leading Analyst Firm Outline Cost Reduction Benefits of Alternative Workspace

PeopleCube today announced the availability of “A Better Alternative: An Improved Approach to Facilities Management,” a webcast that focuses on the economic and environmental benefits of implementing alternative workspace programs, maximizing real-estate utilization, and leveraging business intelligence reporting and trending data. The webcast features presentations by Jack Heine, Research Vice President in IT Asset Management group of leading analyst firm Gartner; John T. Anderson, President and CEO of PeopleCube; and Judd Cain, Vice President of Managed Services for York Telecom.

In the webcast, featured Gartner analyst Heine explains how implementing alternative workspace programs can significantly reduce costs and have a positive impact on sustainability efforts. He cites increased transportation costs, greater workforce mobility, and efforts to reduce carbon emissions as driving factors for implementing new technologies to support flexible work environments.

“The value of efficient workspace management cannot be understated, both from a cost and environmental standpoint, because it presents organizations with a vital opportunity to simultaneously reduce real-estate costs and their carbon footprint,” said Jack Heine of Gartner. “Further, economic pressures dictate that organizations measure their space utilization to improve their cost management going forward. By reporting and analyzing trending data on actual space utilization, organizations are able to manage costs significantly better in the short and long term.”

Reducing Costs Through Alternative Workspace Is a Collaborative Effort
Flexible work environments are becoming more prevalent because they help organizations reduce real-estate costs, lower energy consumption and carbon emissions, and increase talent acquisition and retention. In order for flexible work programs to be effective, however, there must be a thorough understanding of how space is actually being used in order to maximize utilization and collaboration among mobile employees.

“Successful implementation of cost-efficient flexible work environments requires that organizations understand the dynamics of their workforce and their workplace,” said PeopleCube’s John T. Anderson. “The keys are to identify the types of employees you have, track space-utilization patterns using reporting analytics and trending data, establish company policies to support this type of environment, and, ultimately, manage the roll out by starting with pilot programs in smaller departments with an eye toward maximizing future corporate-wide implementations.”

One Approach: Videoconferencing
York Telecom, a PeopleCube partner, is a provider of visual communication services and solutions that government, education, medical, and corporate enterprises use to facilitate collaboration while reducing travel costs and associated carbon emissions. York’s Judd Cain believes that the ROI a business can gain from videoconferencing is inexorably tied to how well the related equipment is used and managed.

“Videoconferencing is one of the most effective ways to reduce costs and carbon emissions without sacrificing collaborative productivity,” said Cain. “But, as with any resource used to support flexible work programs, the payoff in terms of ROI is dependent on an organization’s ability to maximize equipment utilization through efficient scheduling and management.”

Webcast Now Available
The “A Better Alternative: An Improved Approach to Facilities Management” webcast is available immediately. To listen, go to http://www.accelacomm.com/jaw/peoplecube/0/50310882/.

Extending SaaS Contracts a Bonus for Customers and Vendors Alike

As more and more companies turn to SaaS as their software deployment option of choice, one must remember that one of the primary reasons for this movement is the low upfront costs and future predictability.  However, blogger Vinnie Mirchandani notes that the average SaaS contract is only for 1.5 years and that makes it difficult for Wall Street to determine the value of SaaS vendors.

So keep an eye out for a movement towards longer-term SaaS commitments, as Mirchandani claims, in the three, five, or even seven year range.  And if you think about it, it only makes sense.  Vendors can offer substantial discounts for longer term deals knowing that they have that guaranteed revenue stream for much longer than the SaaS contracts of today.  And as long as they offer some expansion/contraction options, it becomes even more attractive to potential customers.  And speaking of customers, they're able to lock in rates for an extended period while having the ability to adjust their commitment with little or no penalties.  In essence, it's a commitment with no surprises. And given today's economic climate, who needs surprises?

SalesForce.com's Growth Highlights SaaS Success

It's not too often these days we hear stories of economic success so when one comes along, we should all listen - and listen closely.

According to InformationWeek, Salesforce (NYSE: CRM).com announced net income of $13.8 million for its fourth quarter ended Jan. 31, up from $7.4 million last year. Total revenue was $289.6 million for the quarter, an increase of 34% over last year's fourth quarter. And despite a plunging economy that hit many IT budgets the hardest in late 2008, Salesforce increased its revenue by 5% over the preceding third quarter."

Among the many backstories behind this report is the clear benefit of Saas.  SalesForce.com has been running on the SaaS plaform for some time and this recent news reaffirmes the short and long-term benefits of SaaS, especially in an economic downturn.  From the lower up-front costs to the predictable monthly expenses to the reduction in IT expenses due to lower maintenance needs, SaaS is clearly helping companies large and small to survive - and sometimes strive - in these tough economic times. 

Economy Drives Development and Growth of SaaS

CRM Directory recently posted some interesting facts related to the economy and the impact is has on the SaaS market.  According to Microsoft SaaS Specialist Genesis Communications, recent research indicated that SaaS solutions are growing at a rate of 33% per year, with expectations that this will continue for some time.  Further, research firm Gartner predicts that 25% of new business software will be delivered through the SaaS model by 2001.

The article also refers to a recent report by IT Pro magazine about the growth in SaaS development.  According to a Evans Data Global Development Survey, 1300 of the developers who participated in the survey expected to begin working on SaaS projects within 12 months.

As John Andrews, Chief Executive of Evans Data said, “The survey results reaffirmed the success of the SaaS concept in replacing the traditional model of business applications being run in house with traditional software licences.  SaaS is delivering on the promise of rapid deployment, limited upfront investment in capital and staffing, plus a reduction in the software management responsibility all making SaaS a very desirable alternative to software on a user’s premises.