April 2009


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Creating Value Through Open Systems In An Energy Management Context

Andy McMillanAndy McMillan
President and CEO
Teletrol Systems Inc.

BACnet International

Contributing Editor

Discussions of Open Systems tend to be long on technical concepts but short on concrete value propositions. I think that is partly because the term “Open” usually gets applied to systems in a technical context rather than a business context and partly because it is just easier to talk about “Open” in abstract terms. But, energy managers and facility directors can not take “abstract” to the CFO for funding nor can they take “technical” to the CEO for approval. To get Open Systems project approval from C-level executives requires that we translate Open Systems concepts into concrete value propositions. Defining OpenEMS and clarifying how it applies to particular organizations is a powerful tool for accomplishing that translation.

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What is OpenEMS?

OpenEMS (Open Energy Management Systems) is a philosophy of doing business where energy-related product and service providers collaborate and interact through standards-based solutions to deliver maximum value to building owners and operators. In an OpenEMS environment, while equipment, software and services may come from different providers they interoperate quietly and efficiently in the background -- allowing building owner/operators to focus on their core business.

There is typically a broad range of suppliers making up the “energy ecosystem” for an owner/operator. The owner/operator may work with utilities, mechanical service providers, alarm monitoring services, bill-pay-audit services, electrical contractors, sustainability consultants, demand-response aggregators and other energy-related product and service providers. Whether these providers are external suppliers or internal service groups, they are all part of the process of acquiring, using, controlling and managing the use of energy in a building.

One way to view an energy ecosystem is to think of it as a building owner/operators supply chain for energy. It includes all of the organizations that impact the sourcing, utilization and management of energy. Just like in manufacturing and retail supply chains, there are substantial value creation opportunities in improving the efficiency of interaction among the stakeholders in an energy ecosystem. OpenEMS is about accelerating the flow of information among those stakeholders while reducing the cost of transactions … and these can dramatically increase efficiency.

Improving the efficiency of interactions through links among business processes and information systems serving stakeholders in an energy ecosystem yields maximum owner/operator value. OpenEMS is the most cost-effective way to link these systems and share required business and technical information among the broad range players. This will result in substantial gains that flow to all of the stakeholders and benefit everyone through lower overall costs of doing business.

Who Benefits from OpenEMS?

OpenEMS offers substantial benefits to building owner/operators in a variety of operating scenarios. (Check out www.OpenEMS.com for animated examples of typical scenarios in the retail sector.) OpenEMS can lower costs, reduce environmental footprints and increase productivity of facility management staff. Owner/operators achieve lower costs through direct reductions in energy use, better utilization of service resources and lower exception processing costs. But owner/operators are not the only ones who benefit.

Commercial and industrial buildings account for a large fraction of the total energy used in the US. There is tremendous potential for reducing building energy use through improved energy efficiency. There is also tremendous potential for improving the effectiveness of energy utilization in buildings through automated interaction among building systems, utilities and facility management systems. OpenEMS enables these interactions and as a result, benefits not only building owner/operators but also product and service suppliers as well as society as a whole.

[an error occurred while processing this directive] Where Can You Get OpenEMS?

OpenEMS doesn't come in a box, on a truck, or through the mail. It is a web of business and technical connections among a building owner/operator and their suppliers. Of course, those connections require a technical foundation, or information platform, that bridges the gap between building automation (where BACnet is the key technology) and IT (where Web Services is the key technology). For a building owner/operator, that foundation will necessarily encompass their energy management system and that is why energy management system selection is a critical issue.

Energy management systems, and the companies that support and maintain them, must be full participants in the energy ecosystems of building owner/operators. This requires a different kind of system and a different kind of company. It requires energy management systems that support transparent industry-wide interconnection. Vendor-specific “standards” will not be sufficient. Collaboration among supplier companies will be equally important. No one company can optimally fulfill all roles in an energy ecosystem. As such, selecting an energy management system with the goal of implementing OpenEMS means selecting a partner as well as a product.


In a world of volatile rate structures, dynamic regulation and uncertain economics, energy management systems must do much more than just manage and optimize energy use. They must be integral components in energy ecosystems where they create a foundation for OpenEMS. Energy management suppliers must do more, too. By definition, no single supplier can deliver on the full value of OpenEMS, so best-in-class suppliers must work together to serve a building owner's diverse and often complex energy management and information needs. In future columns I will walk through some specific scenarios where collaborative suppliers and OpenEMS can deliver concrete value to building owner/operators.

As always, the views expressed in this column are mine and do not necessarily reflect the position of BACnet International, Teletrol Systems, ASHRAE, or any other organization. If you want to send comments to me directly, feel free to email me at andysview@arborcoast.com.



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