Author Archives: Mackenzie Hediger

Insight Energy expands its supply management capabilities through recent transaction with Trane

Insight Sourcing Group’s business unit Insight Energy, LLC, expands energy procurement consulting and brokerage business through a transaction with Trane

ATLANTA, Georgia  — January 19, 2022 — Insight Energy, LLC, a subsidiary of Insight Sourcing Group Holdings, Inc. today announced expansion of its energy procurement consulting and brokerage business through a transaction with Trane that builds Insight Energy’s presence in Louisville, Kentucky and Pittsburgh, Pennsylvania, adding to its robust team in Atlanta, Georgia. In addition to these expanded energy procurement and risk management services (formerly Fellon McCord), Insight Energy brings market leading energy efficiency, renewable advisory, and sustainability services to meet customers’ decarbonization objectives.

According to Tom Beaty, CEO of Insight Sourcing Group Holdings, Inc., “We are excited to grow our business for energy procurement customers in new markets. Our objective is to be the market leader in integrated energy supply, demand, and sustainability and this expansion advances us towards that goal.”

According to Tommy Greer, SVP of Insight Energy, “We are excited to add new energy procurement consulting and brokerage employees to our team through a transaction with Trane. Their unique capabilities to develop wholesale purchasing and risk management strategies for energy intensive clients complement our existing capabilities and will drive great value for our current and future clients. Our exclusive focus on integrated energy solutions and consistent recognition as one of the top companies to work for in the southeast will create an exciting future for all of us.”

For Frequently Asked Questions (FAQs) about the recent acquisition, please click here.

About Insight Sourcing Group Holding, Inc. 

Insight Sourcing Group is the largest and fastest-growing consulting firm in North America focused exclusively on strategic sourcing and procurement-related services. Founded in 2002, the firm works with senior executives and procurement leaders to accelerate savings through strategic sourcing and procurement transformation consulting services, energy cost management, and on-going category analytics. Insight Sourcing Group has worked with hundreds of corporate clients of all sizes and over 65 Private Equity firms. To learn more, visit insightsourcing.com.

About Insight Energy, LLC

Insight Energy delivers customized energy and sustainability solutions that reduce costs, manage risk and improve competitive position. They partner with private equity and C&I clients to establish and achieve decarbonization targets, while maintaining a unique focus on driving spend visibility and cost savings to build program momentum that meet their financial targets. For more information, please visit insightsourcing.com/energy.

ISG Adds New Executive to Lead Insight Energy’s Sustainability Practice

Brandon Owens joins Insight Sourcing Group to help clients develop and implement enterprise sustainability programs in pursuit of decarbonization.

ATLANTA, Georgia  — November 4, 2021 — Insight Sourcing Group announces the appointment of Brandon Owens, global energy industry executive and thought leader, as its new Vice President of Sustainability. In this role, Brandon will be responsible for expanding the firm’s focused efforts around environmental sustainability, which is one of the leading priorities for organizations across all industries today.

Brandon has nearly 30 years of energy industry expertise with a strong focus on clean energy technologies. In his most recent roles, he directed General Electric’s flagship sustainability program and helped formulate and direct strategy within the GE Digital power generation and oil & gas business.  Before his 14 years at GE, Brandon was a seasoned global energy consultant with deep renewable energy expertise. He started his career in emerging energy technology research at the National Renewable Energy Laboratory.

“We’re excited to have Brandon join our firm, as his unparalleled experience and leadership will help deepen and accelerate our current capabilities in sustainability and renewable energy advisory,” said Tommy Greer, Senior Vice President of Insight Energy. “We believe addressing the carbon impact of our clients’ operations and supply chains should be fully integrated into all facets of procurement. This business practice is going to complement everything we do and bring a significant amount of value to both our clients and the planet.”

Insight Sourcing Group’s Sustainability business helps clients build best-in-class energy and sustainability programs that reduce costs, manage risk, and improve competitive positions. Addressing climate change and developing an executable roadmap towards the decarbonization of operations and supply chains sits top of nearly every organization’s list of strategic priorities.  In his new role as Vice President of Sustainability, Brandon will lead the business’s environmental sustainability strategy focusing on advancing energy technologies and advocacy of carbon neutrality across our client base.

“I am thrilled to join the ISG team at such an exciting time for the firm,” says Brandon Owens. “Insight is clearly committed to creating long-term value for their clients, with sustainability at the forefront. I look forward to working with the team to deepen that mission and become the premiere firm for enterprise energy transformation.

To learn more about Insight Sourcing Group’s Sustainability practice, click here.

About Insight Energy

Insight Energy delivers customized energy and sustainability solutions that reduce costs, manage risk and improve competitive position. We partner with private equity and C&I clients to establish and achieve decarbonization targets, while maintaining a unique focus on driving spend visibility and cost savings to build program momentum. Understanding our clients’ cost drivers, consumption profiles, and environmental goals, we help to identify, analyze, and execute on sustainability solutions that meet their financial targets.

Insight Energy is the energy and sustainability division of Insight Sourcing Group, the premiere management consulting firm focused exclusively on strategic sourcing and procurement. In combination with our energy expertise, Insight Sourcing Group’s Supplier Diversity practice empowers clients to pursue more sustainable and inclusive operations, helping to enhance ESG performance while improving their bottom line. Learn more at insightsourcing.com/energy

Insight Energy and LevelTen Energy Join Forces to Help Organizations Meet Renewable Energy Goals

New partnership enables ISG Energy to efficiently source power purchase agreements (PPAs) for its clients through the LevelTen Platform

ATLANTA, Georgia  — March 22, 2021 — Insight Energy, a global leader in sustainability and energy procurement, and LevelTen Energy, the leading provider of renewable transaction infrastructure, are partnering to scale up and accelerate renewable energy adoption for the firm’s clients. The partnership provides Insight Energy with direct access to the LevelTen Platform, which enables the firm to more efficiently source renewable power purchase agreements on behalf of its clients.

Through this new partnership, Insight will gain access to the LevelTen Marketplace, the world’s largest collection of PPA offers, enabling clients to search and compare more than 4,000 offers spanning 21 countries in North America and Europe to find the best projects available to meet their goals. The firm and its clients will also gain access to more than 400 developers in LevelTen’s network to receive competitive PPA proposals using LevelTen’s RFP Automation Tool. In addition, the partnership provides direct access to LevelTen’s automated PPA analytics, which will assist Insight Energy and its clients in evaluating and selecting PPAs that are projected to provide the highest value and least risk. With these powerful efficiency tools, ISG Energy can further scale its consulting practice.

“With access to LevelTen’s innovative renewable energy platform and streamlined PPA sourcing and analytics, our team can more efficiently help clients achieve sustainability goals while reducing costs and managing risk.”   – Tommy Greer, Senior Vice President

“We help organizations execute on cost-optimal pathways to decarbonization – therefore it’s crucial that we maintain and grow a network of best-in-class partners to meet our clients’ evolving needs,” said Tommy Greer, Senior Vice President at Insight Energy. “With access to LevelTen’s innovative renewable energy platform and streamlined PPA sourcing and analytics, our team can more efficiently help clients achieve sustainability goals while reducing costs and managing risk.”

“LevelTen’s mission is to accelerate the clean energy transition. With our renewable transaction infrastructure platform, we’re able to connect premiere consulting firms like Insight Energy with the supply, analytics, and tools needed to source the best PPAs for their clients,” said Ryan Warren, Vice President of Marketing, LevelTen Energy. “We’re excited to support Insight in accomplishing our shared goal: a more sustainable world powered by renewable energy.”

About LevelTen Energy

LevelTen Energy is the leading provider of transaction infrastructure for the renewable energy economy. The platform delivers buyers, sellers, advisors, and financiers the automation software, data management, and standardized contracts needed to facilitate faster, safer renewable energy transactions. LevelTen’s marketplace of renewable energy power purchase agreements is the world’s largest, with more than 4,000 pricing offers spanning 21 countries in North America and Europe. LevelTen’s CFO-Ready Analytics™ automatically calculate more than a billion data points every day, providing buyers and advisors with leading-edge, real-time risk and value insights at modern market scale. Together, LevelTen and its partners share #OneGoal to accelerate the clean energy transition. Visit us at LevelTenEnergy.com to learn more.

About Insight Energy  

Insight Energy delivers customized energy and sustainability solutions that reduce costs, manage risk and improve competitive position. We partner with private equity and C&I clients to establish and achieve decarbonization targets, while maintaining a unique focus on driving spend visibility and cost savings to build program momentum. Understanding our clients’ cost drivers, consumption profiles, and environmental goals, we help to identify, analyze, and execute on sustainability solutions that meet their financial targets.

Insight Energy is the energy and sustainability division of Insight Sourcing Group, the premiere management consulting firm focused exclusively on strategic sourcing and procurement. In combination with our energy expertise, Insight Sourcing Group’s Supplier Diversity practice empowers clients to pursue more sustainable and inclusive operations, helping to enhance ESG performance while improving their bottom line. Learn more at insightsourcing.com/energy

[BLOG] Community Solar: Connecting Cost Savings to Sustainability

Corporate interest and participation in Community Solar has exploded in recent years, as a growing number of states enact legislation creating new market opportunities. Fueled by ambitious state policies tackling power sector emissions, such as New York’s 100% carbon-free by 2040 mandate, Community Solar has become an important policy tool for promoting local solar development across the country.

Community Solar offers guaranteed savings and low-risk access to renewable energy through customer-friendly contract terms. Participation requires no on-site installations or out-of-pocket expenses – and subscriptions generally have no impact on existing power supply agreements.

Figure 1. Community Solar Growth, Installed Capacity (MW)

Once a customer enrolls in the program, they begin receiving credits on their electric utility bill. Customers are required to pay a portion (e.g., 80%-90%) of the realized savings to the solar vendor for providing this service, however there are no other payments or fees for participation. Often, the contract product or deliverable is the savings itself.

For all these reasons, participation is simple, and the value proposition is compelling. While the program structure, requirements and commercial terms vary by market, the general model is consistent across the country. To better understand the program mechanics, it is helpful to consider the upstream activities and incentives that govern solar project development.

For project developers and owners, which may or may not be the same entity, their core business is to build, operate and monetize renewable energy assets (i.e., solar farms). While this happens across the country, it occurs most predominantly in markets with more favorable policies and mechanisms for selling the power that is produced. Community Solar programs are designed to improve the attractiveness of projects by enhancing the value and stability of the revenues generated from the solar farms – thus incentivizing increased solar development.

To secure financing and monetize their projects through these programs, project developers need a specific composition of subscribers (i.e., solar tenants) to their projects. Therefore, Community Solar subscriptions from eligible customers, including most corporations, are required to maximize the economics of these projects – making subscribers highly valuable and sought-after. For developers, these subscriptions improve project revenues and reduce merchant risk. Customers are rewarded with guaranteed cash-flow improvements in exchange for their commitment as a subscriber.

Once a customer enters into a Community Solar agreement, the solar provider registers their participation with the local utility company. The subscription is generally sized based on the annual power usage and spend invoiced by the local utility. As the solar project begins to produce and sell electricity into the grid, the utility distributes a portion of the revenues to individual subscribers in the form of utility bill credits. Solar providers charge the subscribers for a portion of the realized savings, typically leaving the customer with 10% savings on their electric utility costs.

Figure 2. Community Solar Process Diagram

Although most customers are eligible to subscribe, contract terms and risk exposure varies by market, customer and meter type. The primary risk of participation lies in the potential for termination penalties upon cancellation of the contract, which has more relevance for customers that lack certainty and visibility into the future operations of their portfolio. However, even for corporations with short-term leases across most facilities, there are techniques for structuring agreements to mitigate this risk, greatly reducing the potential for cancellation fees.

When structured effectively, Community Solar is a no-brainer and can be profitably incorporated into a business’s renewable energy strategy. However Community Solar markets can also be highly fragmented and complex – involving many different project developers and operators, each with unique contract terms and documents. The administrative resources required to navigate these markets can be burdensome.

We believe that finding the right partner can help alleviate these burdens. By seeking out an advisor with industry expertise, companies can dramatically reduce the time and resources required to capture the benefits of the programs. An independent advisor can help customers efficiently confirm eligibility, quantify the opportunity, evaluate vendors and negotiate contracts to secure favorable terms.

ISG is one such advisor that benefits from the scale and experience across a diverse client base, giving us a unique perspective and insight into the industry. ISG maintains an extensive network of project developers and operators, giving us broad visibility into available capacity and development pipelines across the country – allowing clients to quickly capitalize on market opportunities as new legislation is passed.

If you believe Community Solar might be a good fit for your business, we encourage you to review the questions below and reach out to our team if we can be of assistance.

    • Are we monitoring the industry and taking advantage of new state programs as they are created?
    • Have we found a provider that can deliver and will support us through the term of the agreement?
    • Are we receiving competitive terms or are we leaving anything on the table?
    • Have we updated our energy contracts to ensure maximum savings through Community Solar?
    • Have we properly negotiated and structured our agreement to manage termination risk?
    • Do we have a scalable contract infrastructure to support expansion into new markets as they open up?
    • Does our subscription include Renewable Energy Certificates (RECs), and if not, can we include them?
    • Are we accurately and truthfully communicating the environmental impacts of our agreement?

Interested to see if Community Solar is a good fit?

Connect with our sustainability experts to verify the opportunity parameters and determine the carbon and financial impact to your portfolio.

Learn More

ISG Enterprise Energy Solutions Joins REBA

ISG Energy Joins the Renewable Energy Buyers Alliance

Atlanta, GA – June 25th, 2020 – ISG Enterprise Energy Solutions has joined the Renewable Energy Buyers Alliance (REBA) to support its sustainability advisory services and promote clean energy innovation. As a membership organization of clean energy buyers and suppliers, REBA provides a forum for collaboration and cultivation of new strategies for purchasing renewable energy. REBA members are responsible for roughly 90% of corporate renewables transactions to date, and as purchases continue to scale rapidly, REBA and ISG remain committed to guiding and equipping businesses with the tools needed to meet their sustainability goals.

“REBA is an alliance of large clean energy buyers, energy providers, and service providers that, together with NGO partners, are unlocking the marketplace for all nonresidential energy buyers to lead a rapid transition to a cleaner, prosperous, zero-carbon energy future.”

 

Renewable Energy Buyers Alliance

rebuyers.org

Credit: Renewable Energy Buyers Alliance (REBA)

Businesses are increasingly driving renewable energy adoption and innovation in the U.S. and will continue to play a crucial role in the transition to a clean energy economy. This trend has been largely influenced by growing pressures from customers and investors, which have propelled a wave of corporate sustainability commitments in a variety of industries.

“We’ve seen a considerable shift towards renewable energy and sustainability across our clients in recent years. Companies are more commonly considering the environmental and socioeconomic impacts of their operations and are responding to customer demand by setting ambitious sustainability goals. ISG Energy has developed unique buying strategies and management programs to guide clients through these initiatives. REBA provides great opportunities to collaborate with like-minded businesses and a platform to share best practices.”

 

Tommy Greer, Vice President 

ISG Enterprise Energy Solutions

Once targets are set, however, businesses generally require external support to properly evaluate the investment options and financial risks of renewable energy projects. ISG’s team of energy and sustainability experts work with clients to develop renewable energy purchasing strategies that minimize cost premiums and financial risks, while maximizing the environmental and socioeconomic impacts of their commitments.

ISG Energy is currently coordinating with REBA to introduce a novel approach to purchasing renewable energy, utilizing specialized Opportunity Zone tax incentives. These tax benefits, which incentivize investments in economically distressed communities, can be used to enhance the economics of localized solar VPPA’s while driving economic development in rural communities. As companies seek to maximize the total impact of their sustainability commitments, localized solar projects, aided by Opportunity Zone funding, represent a new and exciting opportunity to amplify the socioeconomic impacts of renewable energy purchases without sacrificing financial performance.


About REBA

Renewable Energy Buyers Alliance (REBA), a membership organization working to establish a resilient, zero-carbon energy system where every organization has a viable, expedient and cost-effective pathway to renewable energy. REBA’s mission is to support its membership to catalyze 60 GW of renewable energy by 2025.

Learn more at rebuyers.org

 

About ISG Enterprise Energy Solutions  

Our team of energy experts partner with clients to provide comprehensive supply and demand management solutions in order to reduce energy costs and manage risk. By understanding our clients’ cost drivers, consumption profile, and sustainability goals, we help to identify new that meet their financial criteria.

Our energy management process is proactive, market driven, and supported by proprietary market intelligence gathered from years in the industry. Our Insight engine provides our team with benchmarks and industry profiles which expedite the path from identifying opportunities to implementing savings.

Learn more at insightsourcing.com/energy

 

Energy Contact:

Mike Muoio, Account Manager – Sustainability & Renewables

p: 770-769-5613

e: mmuoio@insightsourcing.com

ISG Enterprise Energy Solutions

 

Media Contact:

Mackenzie Hediger, Marketing Manager

p: 770-769-5611

e: mhediger@insightsourcing.com

ISG Enterprise Energy Solutions


[BLOG] Conversation with Richard Heath, Director of Enterprise Energy

Spend Insights Podcast with ISG Enterprise Energy Solutions

Spend Insights welcomes Richard Heath, Director of Enterprise Energy & Sustainability with ISG Enterprise Energy Solutions 

As an energy and demand management expert, Richard shares his personal insights and experiences for how finance and procurement can better forecast and budget energy spend and addresses the best practices ISG Energy uses to manage energy spend based on the organizational, regulatory and environmental factors that can impact it.

Richard Heath leads ISG Enterprise Energy Solutions‘ Demand Management & Energy Efficiency business where he partners with global commercial and industrial clients to reduce waste and overall consumption across their portfolios. With over 20 years of experience in strategic leadership, consulting, and operations management in the supermarket and retail sector, Richard bring new insights to ISG Energy and can provide a new client perspective around enterprise-wide energy management.

“Most of the time what we find is utility spend, even though can be quite substantial in an organization, seems to be looked at as unaddressable. By that I mean they look at energy as an annual spend that is going to be at a ‘run-rate’ year over year and then budget for that rate for following year. The problem or opportunity with that approach is that it starts off with an assumption without any tie to a business metric. This is where we find opportunity to look at the energy spend and the data analytics to make it more addressable for our clients”.
– Richard Heath, ISG Enterprise Energy Solutions 

Effective client engagement at both ISG Enterprise Energy Solutions and SpendHQ  all starts with data. Data drives every decision and allows our team to equip clients with strategic recommendations and sustainability solutions that meet their financial targets.

If you are interested in a comprehensive energy assessment to evaluate your portfolio to uncover opportunities hiding in your energy spend, send us a note! 

About Spend Insights

Spend Insights is a podcast series dedicated to the experiences that shape the world of sourcing and procurement. If you’d like to be featured as a guest on Spend Insights, our if you have a topic you’d like to hear covered, feel free to submit your request here.

About ISG Enterprise Energy Solutions

Our team of energy experts partner with clients to provide comprehensive supply and demand management solutions in order to reduce energy costs and manage risk. By understanding our clients’ cost drivers, consumption profile, and operational requirements, we are able to assist them to identify, analyze, and execute sustainability solutions that meet their financial targets.

We stand out from our competition because we are truly unbiased advisors to our clients. The energy industry’s consolidation of suppliers, consultants, and equipment providers has only increased the value of having an independent third party that can make decisions to maximize value for the end consumer.

Our energy management process is proactive, market driven, and supported by proprietary market intelligence gathered from years in the industry. Our Insight Engine provides our team with benchmarks and industry profiles which expedite the path from identifying opportunities to implementing savings.

Learn more at insightsourcing.com/energy

Looking for data-driven client results?

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[BLOG] Managing Energy Spend in a Volatile Market

Spend Insights Podcast with ISG Enterprise Energy Solutions

Spend Insights welcomes Ben Saunders, Energy Markets Risk Manager with ISG Enterprise Energy Solutions 

Managing the energy spend and consumption in areas like electricity and natural gas is top of mind for many organizations today. Organizations are actively looking for ways to reduce cost, monitor savings and improve contract negotiations. ISG Energy’s, Ben Saunders, sat down with SpendHQ’s Director of Product Marketing, Constantine Limberakis, to discuss different strategies and best practices around energy procurement and risk management.

Ben Saunders is a key member of ISG Enterprise Energy Solutions where he partners with global commercial and industrial clients to mitigate risk and optimize their energy procurement strategies across their portfolios. He is one of ISG Energy’s leading energy market experts with additional expertise in Procurement, Strategic Sourcing, and Finance.

“Based on the current state of the energy market, more than likely you have found savings over the last 3+ years in your budget. What is important to remember is that energy prices are still extremely volatile and now more than ever it is important to have a proactive risk management strategy.” 
– Ben Saunders, ISG Enterprise Energy Solutions 

Like many of its team members, ISG Enterprise Energy Solutions has a strong procurement and consulting background which allows ISG Energy’s team to stay focused on a data driven approach, enterprise-wide cost reduction, and most importantly, client results.

About Spend Insights

Spend Insights is a podcast series dedicated to the experiences that shape the world of sourcing and procurement. If you’d like to be featured as a guest on Spend Insights, our if you have a topic you’d like to hear covered, feel free to submit your request here.

About ISG Enterprise Energy Solutions

Our team of energy experts partner with clients to provide comprehensive supply and demand management solutions in order to reduce energy costs and manage risk. By understanding our clients’ cost drivers, consumption profile, and operational requirements, we are able to assist them to identify, analyze, and execute sustainability solutions that meet their financial targets.

We stand out from our competition because we are truly unbiased advisors to our clients. The energy industry’s consolidation of suppliers, consultants, and equipment providers has only increased the value of having an independent third party that can make decisions to maximize value for the end consumer.

Our energy management process is proactive, market driven, and supported by proprietary market intelligence gathered from years in the industry. Our Insight Engine provides our team with benchmarks and industry profiles which expedite the path from identifying opportunities to implementing savings.

Learn more at insightsourcing.com/energy

Ready to accelerate energy savings and procurement performance?

Contact Us

[BLOG] Managing the Risk of a Volatile Natural Gas Market

What does an effective natural gas purchasing strategy look like?

by Ben Saunders, ISG Enterprise Energy Solutions

The natural gas market has experienced two major shifts over the last decade. The first shift has been the development of major production centers across the country, creating a more robust supply network outside of the traditional Gulf producing region. The second shift revolves around changing policy, infrastructure, and energy consumption trends which have created new demand drivers for the fuel. Natural gas production is currently at an all-time high as demand for the commodity continues to aggressively trend upwards. In fact, in 2017 the U.S. became a net exporter of natural gas for the first time since 1957 due in large part to an increase in pipeline exports to Canada and Mexico and the rapidly growing LNG export market. Moreover, a growing demand for natural gas by power generators will continue to result in a closer correlation between gas and power prices.

So what does this mean for your utility budget? Six out of the last 10 years, national gas prices have fluctuated by more than 20 percent. With commodity costs accounting for about 70 percent of a utility budget, these types of year-over-year changes can be devastating. And even though we are still in a low price environment, prices on a month-to-month and day-to-day basis are still experiencing significant volatility. Spot prices during peak demand season and during utility restrictions, can break an annual budget due to one volatile month.

The main risks to be addressed by an energy manager are price, service requirements, and counter-party risk, all of which can be addressed through a strategic and proactive procurement approach, best-in-class contracting practices, and disciplined sourcing execution.

  1. Price – Customers are ultimately market takers, and of course, commodity prices rise and fall over time. The goal for a company should not be to beat the market or to expect price decreases every year, but to determine realistic goals based on their businesses needs and market expectations. Does your company value price certainty and budget stability? Is it important that your utility prices are not out of market for any given fiscal period? A company should consider its appetite for budget movement and time horizons for planning when making these decisions.
  2. Service Requirements – Tied closely to price, poor service requirements can alter a budget for scenarios that are not addressed in contracting. A common mistake we see during contracting is that companies do not address pricing and obligations for all volumes and delivery periods throughout the contract. Do your contracts explicitly state pricing points for all volumes? How will your supplier perform during utility curtailments? What communication do you have established with your supplier during adverse market conditions? All of these factors can and need to be addressed during the contracting and award process, and suppliers should be held accountable for maintaining their obligations.
  3. Counter-Party Risk – Low price levels and volatile markets in recent years have caused financial strain for many providers, resulting in significant vertical and horizontal consolidation across the energy retail supply chain. There are two problems that stem from this environment. The first is that market consolidation results in more restricted markets for retail customers. Fewer competitive, reliable supplier options require more unique contracting structures and greater transparency to maintain price competitiveness. The second problem is that financial strain on suppliers can result in unforeseen changes to contract obligations. Changes in ownership and calls for credit from suppliers can reduce the total value of the contract to the customer.

Procurement Strategy: Addressing Risk

Proactive Purchasing: Although customers must deal with both rising and falling markets over time, customers can work to mitigate budget fluctuations from year to year and work to hit internal targets. Many customers have the practice of extending contracts 30 to 60 days from termination. In order for a purchasing strategy to be effective, the market must be monitored constantly for opportunities to achieve internal goals: executing price reductions, hitting budgeted targets, avoiding additional cost increases. Moreover, the strategy should consider how far in advance the business is willing to act and what portion of volume needs should be executed with each purchase. By consistently monitoring and executing prices throughout the year, customers can minimize swings in their budget and reduce the risk associated with each purchase.

Best-in-Class Contracting: Another common mistake is allowing price value to deteriorate through poor contracting practices. Several contracting mistakes include not addressing or understanding a supplier’s delivery obligations, not addressing pricing for all delivered volumes and cost components throughout the term, and allowing for unfavorable extension terms.

Disciplined Sourcing Execution: ISG Energy promotes competition in almost every sourcing event. Creating cost transparency and challenging suppliers to contribute value through creative product offerings, empowers companies to drive the decision process and ultimately retain long-term value. The value created through price competition and transparency shouldn’t be lost because of a lack of understanding of the total value of the contract. Customers should develop the habit of reviewing suppliers’ credit requirements, financial health, operational footprint, and roles with other parties in the supply chain. This will help avoid unforeseen events throughout the term of an engagement that reduce value for the customer.

The natural gas market is at the center of changing policy, regulation, and infrastructure in America. The volatility and risk that this creates for commercial and industrial customers is an unavoidable issue. Customers must be proactive in developing and executing a purchasing strategy that best positions them to effectively manage this cost line item.

Interested in evaluating your current natural gas strategy?

Contact our ISG Energy experts to find savings within your natural gas spend.

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[BLOG] An Environmental Response to BlackRock’s Letter

How your corporate energy strategy can demonstrate a commitment to sustainability while driving savings.

by Mike Muoio, ISG Enterprise Energy Solutions

BlackRock CEO Larry Fink, co-founder of the firm that has since become the largest asset manager in the world, made waves in January with his latest annual letter to CEOs. In the letter, Fink urged executives to acknowledge the societal impacts of their businesses and to use this understanding to inform their shorter-term decisions.

Fink argues that companies without a sense of purpose – those that are unwilling to respond to broader social challenges – will succumb to short-term pressures to distribute earnings, and forgo investments needed for long-term growth. This message from BlackRock coincides with a trend of increasing awareness in the larger investment community of the value in incorporating environmental, social and governance (ESG) factors into investment decisions.

As an investment strategy, ESG analysis is largely a risk management tool that weighs exposure to important societal issues, including employee relations, data privacy, carbon emissions and much more. From a business perspective, exercising leadership on these issues is an opportunity to manage risk, drive investor confidence, improve brand image and build strong relationships with employees and the community – all of which are conducive to long-term value creation. The rise of ESG investing, together with growing demands from shareholders and customers for businesses to embrace social responsibility, will have lasting impacts on how companies make operational decisions.

“Companies must ask themselves: What role do we play in the community? How are we managing our impact on the environment? Are we adapting to technological change?”
– Larry Fink, Black Rock CEO

While the challenges that Fink alludes to in his letter are exceedingly broad in scope and are in no way limited to environmental sustainability, our clients are already receiving pressure from key customers to address environmental concerns in particular. In the past two months alone, companies such as McDonald’s, Walmart and P&G have each made formal announcements of plans to significantly reduce emissions throughout their supply chains by 2030. As these aggressive targets are rolled out across their operations, the suppliers that exist within these value chains will be heavily impacted by these policies and must begin to plan accordingly.

The good news: incorporating sustainability no longer requires forfeiting returns. For most businesses, the ways in which energy is purchased and consumed is the primary source of carbon emissions. In recent years, the cost of energy projects that address these concerns have plummeted due to falling technology prices. Since 2009, wind farm costs have decreased by 67 percent, while utility-scale solar has seen an 86 percent decline – and corporate renewables procurement has surged in response. The steep drop in prices for renewable energy and energy efficiency technologies has created nationwide opportunities for high-return projects, which can often be structured as cash-flow positive agreements that shield customers from operational risks.

Today, over 130 companies around the globe have committed to going 100 percent renewable, and almost half of the Fortune 500 have set renewable energy or carbon emissions reduction targets. As this market shift continues to unfold, rapid technological advancements and financial innovations are challenging the outdated perception of sustainability and cost-reduction as strictly competing priorities.

*Wood Mackenzie, Limited/SEIA U.S. Solar Market Insight
*Wood Mackenzie, Limited/SEIA U.S. Solar Market Insight

Fink suggests that executives should include social responsibility in their corporate strategy, and energy-driven emissions reduction initiatives are a logical place to start. Executing on high-return projects with positive environmental attributes should be viewed as a crucial first step towards ESG excellence for any business. Many companies understand this reality but lack the resources and expertise needed to translate a conceptual appreciation of sustainability into real projects – especially those with a compelling ROI.

New opportunities for reducing costs and improving sustainability are emerging across the country; however, the profitability of these projects can be quickly eroded if managed ineffectively. Identifying the right projects for your firm with the right team of energy experts in place to guide implementation will ensure that returns will not be compromised.

Interested in learning more about cost-effective energy projects?

Contact our ISG Energy Experts for a comprehensive energy assessment!

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[BLOG] SpendHQ Value Leader in Spend Matters SolutionMap

Spend Visibility Software, SpendHQ, leads the pack in Customer Value and End-User Experience

by Mackenzie Hediger, Associate at Insight Sourcing Group 

The Spend Matters SolutionMap for Spend Analytics was recently released and Insight Sourcing Group’s spend visibility software, SpendHQ, received a highly favorable ranking.

SolutionMap helps sourcing professionals stay informed on today’s top procurement technologies and helps procurement organizations identify the best solution to meet their unique needs. One of their many categories that they featured is Spend and Procurement Analytics. Within that category, Spend Matters allows a procurement professional to assume a “buying persona” that reflects their organization’s value proposition and specific spend needs and then ranks the tools on weighted requirements accordingly.

“We set out to develop a highly configurable ranking of Spend Analysis solution provider capabilities to reflect persona-based customer requirements, quarterly market developments, peer reviews, and innovation,” says Jason Busch, Founder, Spend Matters. “SolutionMap is the culmination of our efforts. No two procurement organizations are the same, and often selecting the right Spend Analysis provider doesn’t come down to technological capability alone.” 

Several spend and procurement analytics tools, including SpendHQ, are illustrated with a purple bubble across multiple quadrants based on specified criteria. The color represents the number of submitted references with darker being the best, and the size indicates the number of current customers.

As SpendHQ is just one of the numerous providers listed in SolutionMap, the Spend Matters Technology Review gives an in-depth analysis of all of the capabilities of the top procurement analytics tools currently on the market. It is important for a procurement leader to read this report through the lens of their own company’s buying needs and technological goals to ensure that their tool is the best fit for them. Technology is always changing within the procurement and spend analytics world and Spend Matters always works to keep us informed.

Is your firm using the best procurement analytics tool based on your buying needs?

Access the 2017 Spend Matters SolutionMap provider rankings.

View the Full Report