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WITH SAVINGS ASSURANCE
director of business development,
Siemens Retail & Commercial Systems
Why should retailers automate their
While retailers understand the importance of energy management to meet cost-
reduction targets, limited access to corporate capital and uncertainty around
achieving the promised reductions can deter many from deploying an energy
management system (EMS). Dan Kubala, director of business development for
Siemens Retail & Commercial Systems, spoke with Chain Store Age about how
retailers can now save energy through a new service agreement structure backed
by savings performance guarantees.
An EMS should be the cornerstone of any
corporate energy management program. We see
immediate savings averaging 15% to 20%, and
through advanced extensions, process inte-
gration and continuous improvement, we can
increase those savings to 30% to 35%. Further,
the EMS serves as a platform for measuring and
managing the impact of other initiatives, such as
lighting upgrades, maintenance management,
on-site solar, refrigeration equipment or demand
response. We’ve proven this model time and
time again with dozens of leading retailers such
as Big Lots, Michaels, DSW Shoes, Big 5 Sport-
ing Goods and 24 Hour Fitness.
livers the promised savings with the Siemens
Site Controls EMS. Our client services group
works closely in partnership with retailers to
help them with process integration and iden-
tifying opportunities for additional savings.
We offer continual improvements to system
capabilities, notably with our recent launch
of the Site Controls Enterprise Portal.
To address stafﬁng issues, we have a man-
aged services offering, which outsources the
day-to-day system administration to Siemens
experts. And to address the problem of limited
access to capital, we have introduced a new
way of paying for the entire program without
requiring capital investment called an Energy
Management Service Agreement (EMSA).
What challenges do retailers face in
justifying an EMS investment?
How does the EMSA differ from a
traditional EMS capital investment?
One obstacle is skepticism concerning whether
the EMS will actually deliver the promised
energy savings. Many retailers have been
burned by poor performance of past projects
and don’t want to make the same mistake
again. Another concern is that energy and
facility teams often don’t have the bandwidth
to manage the day-to-day operations of an
enterprise EMS. Finally, there is the substan-
tial challenge of gaining access to corporate
capital. Often, an EMS project must compete
with other potential investments, such as POS
upgrades or even new store construction.
In a traditional capital purchase, a retailer
pays cash up front for the EMS equipment
and installation, and then recoups that in-
vestment over time through energy savings.
There may be small fees for data access or
call support that are paid for out of expenses
on a monthly basis. In this scenario, the
equipment becomes part of the balance
sheet as a capital asset, and such metrics as
return on investment, net present value and
internal rate of return are used to evaluate
the attractiveness of the investment versus
In contrast, with a service agreement there
is no upfront investment, but rather a single
monthly service fee payment for a comprehen-
sive set of services. The service fees are typi-
What is Siemens doing to help retailers
address these challenges?
First, we offer an integrated system that de-
28 cally viewed as an expense item and are offset
by energy and maintenance savings. Therefore
the program is immediately self-funding, ac-
cretive to current earnings and frees up limited
corporate capital for other projects.
What elements are included in
The program is based upon the use of
the Site Controls EMS platform, which is
installed at each location. The services
include installation program management,
EMS equipment upkeep due to normal wear
and tear, access to the Site Controls En-
terprise Portal, regular software upgrades,
EMS call support, client services, and
managed services to proactively identify and
resolve issues to increase savings over time.
The offering bundles all of the key items
required to drive signiﬁcant and sustained
savings for the long term.
What is the savings guarantee?
As part of the comprehensive agreement,
the EMSA includes savings guarantees
that are backed by Siemens to ensure that
the program is cash ﬂow positive from the
beginning. Our objective is to stand behind
our equipment and our services, and es-
sentially make this a no-risk proposition for
the retailer. Siemens currently guarantees
billions of dollars in energy savings in other
industries, such as education and large
commercial — the EMSA leverages this
expertise to help retailers solve their energy