Data Collection + Business Intelligence = Successful Sustainability InitiativesJuly 23, 2012
Corporate Social Responsibility (CSR) initiatives are slowly moving to the top of many executives’ to-do lists. In a survey conducted by MIT Sloan Management Review, two-thirds of executives said being competitive in today’s marketplace requires sustainability, and 70 percent said sustainability is now a permanent goal on their companies’ agendas.
“Aggressive goals are more powerful than modest goals. Public goals have greater impact than internal goals. Quantitative goals are more credible than non-quantitative goals. And goals for the future send a signal that goals described in retrospect do not.”
For sustainability to drive process efficiencies–and truly impact the so-called triple bottom line of people, planet and profit–these initiatives must be measurable, quantifiable and actionable. To support those goals, CSR programs require three things: automated data collection, Business Intelligence (BI) tools and the development of data-minded sustainability teams.
Greater Understanding Through Data Automation
Today, achieving sustainability involves finding areas where business consumption can be reduced and efficiencies improved with a relatively high benefit-to-cost ratio. New regulations, such as the proposed 80 percent reduction of U.K. CO2 emissions by 2050, makes achieving progress toward these lofty goals imperative to avoiding financial penalties.
To track their success, businesses must be able to quantify sustainability initiatives, says Kevin Ramm, Senior Sustainability Solution Manager for SAP. The problem, as he sees it, is that many businesses are using an incomplete picture.
“Data collection continues to be a major challenge,” says Ramm. “But sustainability benefits from good data–information that is timely, pertinent, relevant and has the right degree of robustness.”
Data collection isn’t easy. “I’ve worked in sustainability teams and I’ve seen how hard it is to know which direction to go with your activities,” Ramm says. “Data collection isn’t sexy, and it’s common to take shortcuts wherever you can.”
The solution, Ramm says, is to circumvent manual collection through automation. Danone, a multinational food corporation, worked with Ramm and the SAP team to improve the automation of its data collection for new sustainability insight. With upwards of 35,000 products, this was quite a challenge.
Danone used its Enterprise Resource Planning (ERP) system data to determine the product footprint–a quantification of a product’s environmental impact–for all its products. The result: a management team that was able to benchmark the sustainability of products within its portfolio at specific locations.
The information empowered the team to rethink its processes, from shifting the transportation methods of its goods to re-evaluating the use of ingredients and materials from specific regions.
BI Consumerization a Boon to CSR
A business that can accurately identify the greenhouse gas emissions, carbon footprints and other common Key Performance Indicators (KPIs) is armed with a powerful amount of information. But the cause–and effect of action–is often convoluted. Data holds little intrinsic value if it cannot be analyzed.
"Most people use statistics the way a drunkard uses a lamp post, more for support than illumination." — Mark Twain
Enter BI tools: applications that analyze large sets of data. For years, companies have been able to conserve energy, hold regional operations accountable for their emissions and energy usage and become more profitable through the use of BI software.
For example, with the help of the CarbonSystems BI solution, cheese manufacturer Bega Cheese was able to integrate real-time data on its water and energy usage, as well as its waste reduction efforts. Importantly, the solution was accessible to all operating divisions–holding the local divisions to their own accountability.
Traditionally, BI applications required a lot of IT involvement to get up and running. And even then, they required a sophisticated analyst to make use of them. A casual user wouldn’t be able to use them effectively. However, the “consumerization” of BI tools is leading to increased use among sustainability teams–without IT’s involvement.
I recently spoke with two individuals from business intelligence software vendor QlikTech about this trend: Maria Scurry, Vice President of Communications and Elif Tutuk, Technical Product Marketing Manager. In our discussion, they pinpointed three reasons why adoption of BI tools is increasing among sustainability teams:
- Increased In-Memory Processing. By loading data directly into Random Access Memory (RAM), analyses can be completed much more quickly, and without involving IT.
- Improved Data Visualization. Visualization, or “data-storytelling” as Tutuk calls it, is imperative to businesses analyzing output across multiple dimensions (e.g. region, product, etc.). Tutuk mentions that visualization is a powerful way to weed through “data noise” and quickly identify outliers. In addition, powerful visualization is often a successful way to present information to executives that need to understand findings as quickly as possible.
- Enhanced Collaboration. These analyses and discussions commonly involve team members from various departments across the globe. QlikTech’s software, for example, enables collaborative data analyses that can be conducted in real-time and visible to multiple users. Users can also comment directly on data points and instantly see the comments of others.
Data-Minded Sustainability Teams Will Lead the Way
Armed with the right information, sustainability will shift from an altruistic, future-focused project to one that is proactive and strategic. However, with the use of these BI tools, corporate executives will pressure sustainability leaders to prove initiatives are generating a positive return on investment for the company.
“[Sustainability] teams have to be able to quantify their actions and show value over time,” says Tutuk.
The result: more accountable CSR teams, more accountable businesses and a marketplace where conversation and efficiency can be more easily achieved.
How have you seen sustainability positively impacted by improved collection, measurement and analysis? Has your organization seen improved output from your sustainability initiatives through the use of BI tools? Please share your experiences below.
Thumbnail image created by DonkeyHotey.