Company Brief

In 2011 a leading IT services provider Nuo Provisio IT Solutions set up a subsidiary, Nuo Provisio
Energy Solutions. Professional Energy Solutions (NPES) provides solutions to enterprises towards
operational efficiency and energy management. NPES bases its offerings on connected energy
infrastructure and data driven management of said systems. The company builds on analytical models,
and algorithm driven frameworks to determine correlation among various interconnected sub-systems
to deliver energy efficient solutions. NPES provides reduced the carbon footprint, through efficient
energy usage. Efficiencies are achieved by reducing energy wastage and recovery of energy losses
along the value chain of client enterprises.
The company has built its business across North America, Europe and APAC. NPES has implemented
their Energy Management Framework for various enterprises across industries (It serves mostly
Retail, Telecom, BFSI, and any other enterprise having a significant built up real-estate) in the said
geographies.
The revenue model of the company is not based on the normal billing as per hours worked. NPESs
models itself as an energy management consultancy; thus they charge their clients a percentage of the
savings that are achieved.

Rationale and initial days of the Company

In 2011 enterprises were reeling under the effects of a recession post the sub-prime crisis. With three
years of flagging growth, corporations were coming under increasing pressure to improve their
operations and reduce costs. A major focus of this cost re-structuring was reducing energy spends.
This was when NPES came into existence. The initial clients for NPES were enterprises that already
employed some kind of automation in their energy consuming subsystems. The automation equipment
had features to report on equipment parameters. The introductory customer was a major telecom
service provider in India. Through its first client the company refined its energy management
offerings.
Using the data gathered from its clients the company implement rule based deviation management
systems. NPES achieved its goals of offering efficient energy management systems. Initial gains that
were achieved had to be followed by more effective solutions for continued savings and thus
continued revenue growth.

Growth and forks along the road

NPES had diversified into offering services to retailers and government institutions. The introductory
retail customer was a big box retail chain in the United States and the introductory government client
was a school district in Southern United States.
NPES also worked towards increasing its portfolio of service and products. The company offered its
new offerings to existing clients for increased energy savings and also looked to add new clients.
Through its experience with clients it found another business opportunity in the Operation and
Maintenance (O&M) of equipment. Efficiency through enhanced O&M would lead to higher cost
savings. Existing processes were adequate; but it would be pro-active maintenance that would lead to
greater efficiencies. With detailed data from its existing customers NPES further enhanced its
algorithm based equipment management systems. New algorithms were developed for predictive
analysis. A new team worked towards building the enhanced analytics capability.
NPES also made headway in the automation and retrofit business. A number of enterprises were
looking to connect all of their sub-systems to a centralized platform. This would enable organizations
to gain insights into equipment performance to gain efficiencies though operational improvements.
Projects to set up automation systems would also add to NPESs data collection capability.
With lowering costs of sensors, controllers and other internet of things (IoT) components, integrated
product offerings were becoming more affordable for customers and more profitable for vendors.

Competitive Backdrop
The other Energy Service Companies (ESCOs) were investing a lot into IoT to bolster their offerings
in the energy management space. Even technology giants like Google and Apple invested to provide
automation interfaces for energy management. The Legacy automation providers like Honeywell,
Johnson Controls, Noresco, and Schneider Electric offering integration possibilities and software with
their hardware product offerings.
Increasingly companies in the ESCO space were to increase Customer Lifetime value. They were
looking to provide services and term contracts for O&M activities.
The competition was also coming up with almost similar multi-platform integration systems to offer
energy management systems. The market was getting crowded with multiple service providers
offering separate value propositions all looking to provide energy efficiency solutions.

Decision Dilemma
The competition was making its presence felt across almost all of its offerings. Professional Energy
Solutions is faced with many decisions. These decisions would either make for the companys
continued survival, or an unremarkable decline. The Decision choices facing the company were:
1) To partner with a Hardware provider and co-brand automation and data logging products
2) To develop its own line of automation devices, based on proprietary algorithms and protocols
3) Focus of the organization was distributed between the Analytics and the Hardware based
automation divisions of the business, need to increase focus on one, probable spin off of the
other division.
4) Increase investments in the Proactive analytics division or not.
A challenge also facing a possible analysis was that since no other competitor was offering all the
product and services mix of NPES, it was not possible to come to a proper valuation for the company.
Provide a roadmap of the company to lead to growth and increased profits, taking a stand on the
decisions facing the company
Provide a roadmap of leveraging IoT to further enrich NPESs product portfolio.
Comparative analysis of choice for hardware source selection may be included in your analysis

Exhibits
NPES (a snapshot)
2012-2013
2013-2014 2014-2015
Revenues (in $ '000s)
21000
27000
31500
Employees
250
285
337
PBT (in $ '000s)
2825
3839
4895
Exhibit 1 A glimpse into Nuo Provisio Energy Services
Competitiors
PS Ratio TTM
Honeywell
2.031
Noresco
1.241
Johnson Controls
0.6261
Schneider Electric
0.9101
Exhibit 2 Relative Positions of the competitors of NPES

Instructions:

You are free use data from external sources (please mention all references).
e d your prese tatio s i the for at Tea Na e_CollegeNa e to s c@ii rohtak.ac.i
The presentation has to be submitted by 10th Jan 2016 EOD.
Top teams from this round will be called to present in the final round to be held at IIM
Rohtak campus on 16th January.