Transforming energy value chains for sustainability

Pat House

Pat House is the co-founder, vice chairman, and senior vice president of strategy at C3. She co-founded and served as vice chairman and executive vice president of Siebel Systems. Before joining Siebel Systems, she held managerial and executive positions at Verbatim, Oracle, and Frame Technology. House is chairman of the Mary Mae Foundation, a nonprofit organization providing affordable housing for teachers, and she is a member of the board of directors of First Virtual Group, the Hewlett Foundation, and The Carnegie Endowment for International Peace.

In this interview, House discusses how optimizing resources across the energy value chain can help organizations achieve their financial, operational, and environmental goals.

Pat House of C3 shares how information can transform energy value chains to be more sustainable.

Interview conducted by Vinod Baya and Bo Parker

PwC: From a sustainability perspective, what is the challenge that you are addressing for businesses?

PH: Two market forces—volatile energy costs and stakeholder pressures to cut greenhouse gas [GHG] emissions—are creating a new business and public mandate to make energy and emissions a management priority. As organizations increasingly focus on controlling their energy costs, they also face intensifying pressure from stakeholders—including investors, customers, employers, and regulators—not only to disclose their GHG emissions, but also to substantially reduce them.

To redefine the way in which they manage energy and emissions, many organizations are increasingly taking a systematic, data-driven approach. A primary challenge is that energy and emissions data typically are fragmented across multiple sources, locations, formats, and owners. There is no consolidated data repository, nor is there a system in place to centrally manage energy and emissions across the enterprise.

PwC: What is the solution to these challenges?

PH: The solution is the systematic application of information technology to monitor, mitigate, and monetize resources within an enterprise and across its value chain. C3 is delivering enterprise software applications and content libraries that enable organizations to optimize their energy and emissions strategies and meet their sustainability goals.

“Two market forces—volatile energy costs and stakeholder pressures to cut greenhouse gas [GHG] emissions—are creating a new business and public mandate to make energy and emissions a management priority.”

There is a growing awareness among organizations that the efficient use of energy and other resources, and the resulting reduction in emissions, is a requirement for continued market leadership. Organizations are therefore seeking a road map and a robust set of solutions to strategically source, manage, and ultimately reduce their energy consumption and emissions, providing an opportunity to simultaneously reduce costs and improve business performance.

The solution is to enable an energy and emissions optimization cycle—essentially providing an information-driven transformation so that resources can be managed as strategic assets across the entire energy continuum from generation through transmission and distribution to end-user consumption. What organizations need is the ability to do so in a structured, systematic, and automated manner, providing capabilities to collect, analyze, benchmark, and report energy and emissions data, as well as evaluate, optimize, and report on energy and emissions mitigation projects. We have designed our product family to do so.

PwC: Why should enterprises manage these resources? Isn’t meeting regulations adequate?

PH: Organizations face increasing financial and operational pressures from energy costs and price volatility, as well as from investor, customer, and regulatory concerns about emissions and environmental impacts. As a result, organizations are intensifying their focus and taking a more strategic approach to energy and emissions management.

C3 software solutions are designed to help organizations address their requirements in managing and optimizing their use of energy and the associated GHG emissions.

Commercial and industrial enterprises as well as municipalities and government entities benefit financially, operationally, and environmentally by becoming energy and resource efficient. As a consequence, they also reduce waste and emissions, contributing to the social mandate for a cleaner and more sustainable environment.

PwC: You mentioned an information-driven transformation of the energy value chain. What is the transformation here?

PH: At the core of this information-driven transformation is the smart grid, which enables the systemic, dynamic, and real-time information flow across the entire energy infrastructure from generation through transmission, distribution, and end-user consumption. The transformation extends into the way organizations manage, measure, procure, and ultimately optimize energy throughout their extended value chains. It also implies profound changes in the way energy suppliers and consumers interact, leading to more collaborative supplier-customer relationships across the energy sector. The energy information transformation has immediate impact in creating significant financial and competitive value for both energy suppliers and consumers.

“The solution [to sustainability challenges] is the systematic application of information technology to monitor, mitigate, and monetize resources within an enterprise and across its value chain.”

Real value is created for the full energy value chain by having two-way visibility and collaboration between the supplier and user, which has not been the case so far in the energy industry. With the additional information and collaboration, energy providers become value-added, strategic partners rather than commodity suppliers. Energy consumers are able to optimize their energy procurement, consumption, and the resulting emissions.

PwC: Pat, you co-founded and helped build Siebel Systems into a successful enterprise software company, and now you’ve helped co-found and build C3. Are you finding any key differences between the two experiences in how the solutions evolved and are being adopted?

PH: The similarities lie in the fact that the fundamental role of enterprise software is to embody and enable the replication of best practices, improving operating efficiency and effectiveness.

What C3 is enabling for energy, resource, and emissions management is forward-looking, strategic decision making, both in real time and over extended time horizons. Some unique requirements in this market are the ability to handle exceptionally large data sets, potentially approaching petabytes in scale, as well as multivariate optimization capabilities, enabling organizations to meet their financial, operational, and sustainability goals.
PwC: Does this trend relate to any of the disruptions or innovations of the past?

PH: Statistical process control enabled by information technology caused a significant disruption in the manufacturing sector. Robust information technology and sophisticated statistical measurement techniques were applied to monitor and improve manufacturing output, globally reshaping competitive and economic dynamics across the manufacturing sector.

Energy management, too, will likely become the basis for organizational and national competitiveness, with financial and market advantages accruing to those that systematically and strategically optimize their use of energy and resources.

PwC: How does your solution allow enterprises to advance their sustainability objectives?

PH: C3 helps organizations develop and implement their sustainability strategies. Using C3, organizations are establishing systems and processes to monitor and measure their energy and resource consumption, not only in the aggregate, but also across their operating units, allowing them to identify opportunities for improvement. They are able to compare themselves against industry norms to determine and report how they rank competitively in their overall sustainability performance.

PwC: What is the role of the CIO here?

“At the core of this information-driven transformation is the smart grid, which enables the systemic, dynamic, and real-time information flow across the entire energy infrastructure from generation through transmission, distribution, and end-user consumption.”

PH: In addition to the responsibility to implement and operate information technology solutions, the CIO has the responsibility to create an integrated viewpoint from a business angle, which will help position the organization competitively from a standpoint of energy, resource, and emissions management. C3 not only enables an organization to meet its sustainability goals, but it also gives the CIO new opportunities to use information to create market differentiation and competitive advantage.