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Sustainability — Arrival of a new corporate focus June 14, 2007

Posted by Amit Chatterjee in Business User, Enterprise Software, General Enterprise Musings, Governance, GRC, Uncategorized.
4 comments

Awakening of a new trend

Last week, I was invited to a McKinsey presentation on the impact of Green or Corporate Sustainability Management (CSM). When McKinsey offers to give a presentation, people stop and listen.  In a packed room, Matt Rogers, a director of the Firm led the audience through the impact that carbon and other green house gas initiatives were being addressed by the clients that the Firm serves (Low Carbon Future).

During the presentation, it was clear that there was a significant need for changing behavoir.  I was trying to determine how long it would take to make this trend a reality vs. short-term FAD status.  Then I was hit with the most interesting stat of the whole presentation.  Another director of the Firm announced that McKinsey was currently serving 20 of the Fortune 100 around establishing or building out their corporate sustainability program. 

Ladies and gentlemen, CSM has arrived.  Basically, when a large corporation is willing to hire McKinsey brainpower (which does not come cheap) to establish a strategy, it is no longer a fad, but a true initiative for change within an organization.  Thus marks the arrival of CSM into our lexicon as a legitimate method for competitive advantage or lever for shareholder value.  This is truly exciting news.

Basics of CSM

CSM is defined as meeting the needs of the present without compromising the ability of future generations to meet their own needs.

Corporations are increasingly under attack if they disregard environmental and social concerns. For example, the Financial Times considers climate change to be the next legal battlefield. Just few months ago the State of California filed a lawsuit against six automakers for global warming damages.

Corporate Social Responsibility (CSR) is a strategic weapon that companies in all industries around the world use as a reaction, to protect their key value drivers – their good name and brand reputation. Companies like BT, General Electric and Wal-Mart (Carbon-Neutral companies) are helping change the game by building sustainability factors into their competitive strategy. This explains the burst of non-financial /CSR reports over the past few years. According to Al Gore, “the full spectrum of value that represents a corporation’s activities can only be understood if you look outside the narrow confines of financial reports.”

However, hardly any company has a systematic approach to manage their non-financials (like energy consumption, emissions, degree of diversity among workforce etc.). They rely on manual operations, on number crunching, and time-consuming processes, which lack transparency and are difficult to audit.

What SAP can do to help

Therefore, SAP has recently committed to systematically cover the domain of non-financial indicators. We’re planning a solution which automates key elements of the process of CSR reporting (List of reporting). This solution will automatically extract non-financial indicators from the backend, allow analytics, drill down and benchmarks. This can be the first step to integrating financial and non-financial indicators. Management of the triple-bottom-line (financial, social and environmental issues) will become as powerful, transparent and accountable as one can expect from SAP. This can become a paradigm shift, expanding SAP’s traditional core competence to the area of non-financials.

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Seeking wisdom of crowds… April 30, 2007

Posted by Amit Chatterjee in General Enterprise Musings, GRC, Uncategorized.
9 comments

As with most first time bloggers, I was assuming that Web 2.0 would simplify my life.  The reality is that the process i went through to make this blog actually appear was easily classified as a nightmare.  

 Everything from logging into a hosting account, to managing to identify the right “blog” service, determining how best to work with the blogosphere, simply was too taxing —  clearly too much consumer choice has baffled me and cost me 8 weeks from inception of idea to actual execution.

I was completely prepared to abandon this effort, but my company, SAP had a conference last week (SAPPHIRE in Atlanta), and I met some other bloggers, and realized that blogging was the equivalent of talk radio for software.  I was impressed by the number of bloggers, and also the varient in quality and approach to make their noise (voice) heard.  Much like the days of listening to political pundits or even that recent shock DJ that got fired, each blog will undoubtedly share their point of view.   Being a man with several points of view, this medium seems a natural home for me.

But what is different than talk radio, is that listener, or in this case the reader, has significant power.  the “wisdom” does not end with my blog, but is rather the beginning of the refinement or rejection of a germinating idea that the source blog put forth.  Hence I am even more excited about getting my ideas out there so they can be torn apart and then rebuilt, I want to engage the blogosphere for their wisdom on what is going on, and yes, amazingly even advice on what to do better.

At the same time, I look forward to sharing (read “expounding upon”) my insights from time spent in enterprise software.  I have been in the space in 1997 in some form or another, and have been around the transformation of this industry.  Even at an industry leader like SAP, I held numerous roles.  I was part of the team that launched NetWeaver into the market, then head of strategy for product and technology at SAP.   Also, I founded the SAP GRC business unit within SAP.  I have been directly involved in the SAP GRC business since we announced the business unit last year.  At some point, I am sure I will get into a biography or some story about myself, but for now, figure I spent most of my life either in or around the enterprise aspect of software.

Net net, I believe that enterprise software continues to work.   

So practically, that means I dont subscribe to the point that new ideas mean value, nor do I believe that old ideas need to be there forever (I break enough glass).  I believe despite excitement, new ideas usually don’t equate equivalent impact to old ideas that generate shareholder value (thus lack of uptake).  While Web 2.0 will have an effect and is good for consumers (overall a very positive outcome)– right now the impact to an enterprise is not business ready. 

Essentially, it is the equivalent of a REIT company explaining to its shareholders that its future growth is tied to its success in 2nd Life (play the game).  No one is saying that cannot happen, but clearly you would be “investing at the early stages.” 

So what I hope to establish with those that choose to read this, is an opportunity to provide a business implication focused view of the technology and provide readers with an understanding of how and where to invest in this curve.

I’ll post my first set of thoughts on Enterprise software and GRC in a few days.  Look forward to the exchange.