Wednesday, June 30, 2010

SAP's sustainability approach

SAP is taking a very active strategy towards sustainability.
  • They publish their own sustainability report in a nice online version and try to continually improve their operations on a variety of measures.
  • They provide thought leadership on how IT can make a difference in achieving sustainability goals.
  • They continually build out their product suites, by acquisitions such as ClearStandards, and define a broad set of possible leverage points (see chart below). Interestingly, this also includes HR related items such as Talent or Diversity.

I believe in the long term a comprehensive Enterprise Application Solution needs to also support the Sustainability goals of its customers and provide robust reporting and management capabilities for elements such as CO2 emissions.

In a whitepaper, SAP defines the term “Sustainability” in the triple-bottom line dimensions Social, Environmental and Economic (or “people, planet, profit”).
Sustainability has a lot to do with efficiency and hence will be a cost reducer. Also, in many cases it represents an opportunity for innovation and new revenue. Both together clearly position it as a profit driver.

IT plays a role both as a contributor to GHGs, but more importantly as an enabler for huge GHG savings. Efficiency needs to be a key design principle in software development. Done right, our pure SaaS approach presents a very strong strategic opportunity to be the most optimal way to achieve enterprise data management and processing. Once fully realized, virtualization and the use of elastic computing resources in the cloud should put us in a benchmark of our own when measuring hardware and energy consumed for processing achieved.

Also, executing on a sustainability plan requires defining the plan with goals and KPIs, monitoring execution with dashboards and taking corrective action where needed. Our “action to insight” approach paired with our goals strategy should enable us to support this vision (note that much of the data requiring measurement are manufacturing / supply chain related, but there is certainly a good starting point in our Financials and HCM footprint).

In summary, I believe Workday has an opportunity in the short term to present its SaaS offering as a quantifiable contributor to our customers sustainability goals and in the mid-term to develop this notion as part of our product functionality (think carbon dashboard with drill-down).

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