Sustainability was a well discussed (and promoted) topic at Sapphire, sprinkled throughout the keynotes from guest speakers - Sir Richard Branson, the Honorable Al Gore, and General Colin Powell, in the co-CEO Jim Hagemann Snabe and Bill McDermott press conferences, in Chief Sustainability Officer Peter Graf's sustainability roundtable, myriad presentations by SAP and its ecosystem of partners across the exhibit floor, and even the announcement of the SAP Pinnacle award to CSC in sustainability.
SAP has many good reasons to invest in sustainability - it's a conversation starter with customers and prospects, and it's an opportunity for SAP to play an important role in the not-so-easy work that needs to be done to support a sustainability strategy and sustainability initiatives.
Sustainability is fundamentally a data and process challenge that is changing how businesses make decisions. How and when companies acknowledge the importance of sustainability varies from company to company and industry to industry.
In my research with manufacturers, sustainability investments can be about cost savings, efficiency improvements, protecting the brand, responding to or getting ahead of regulations, satisfying stakeholders, developing a corporate culture and attracting new employees, revenue opportunities, first mover advantage, and even "do the right thing".
Peter Graf commented that the turning point for SAP was a customer's statement that they would no longer be able to purchase from SAP unless SAP had a sustainability strategy. I'm sure the statement oversimplifies SAP's decision to elevate sustainability across the company, in its products and how it markets those products, but I am positive that the customer asking for SAP's sustainability strategy brought a much-needed financial connection - No sustainability strategy, no deal.
At this point, SAP is doing the best job of the large software vendors in raising the issue of sustainability and making it an integral component of its business. On one of the Sapphire panels, a manufacturer commented that sustainability (and compliance) needs to be delegated and distributed, and that's where we're headed with SAP's strategy as well - sustainability will be distributed across the company and its products, whether those are on-demand, on-premise, or on-device. Some of SAP's sustainability facts and comments I'd like to note:
- "It takes a lifetime to build a brand and one unfortunate incident to tear it down" was a comment made during the co-CEO press conference. This kind of thinking is not unusual among brand-oriented manufacturers and opens the door for conversations related to environmental health and safety (EH&S), product compliance, data management and analytics from a general sense, and carbon (and other resource) tracking.
- SAP has more than 1,000 employees working on sustainability, after the TechniData acquisition.
- "Sustainability is an opportunity for business process innovation". This is a Peter Graf quote that is right on target and also speaks to why we think sustainability needs to be supported by a wide range of IT applications, not just carbon or energy management. Innovation may be in the form of a new supply network or new manufacturing processes. Graf also commented that he had more than 200 appointments with companies that wanted to talk with him about sustainability at the show (and I assume those numbers don't include analysts or members of the press).
- The Sybase acquisition could potentially help SAP bring sustainability more sophistication in the analytics (via in-memory database) and out to the employees via mobile devices.
- SAP Carbon Impact 5.0 will be available on demand in July with several functional enhancements related to building energy management, employee engagement, regulatory GHG reporting, and product lifecycle assessments. More details will be coming soon.
- SAP updated its sustainability map to be more stakeholder focused, SAP's new interactive sustainability report (was released the week before Sapphire, and SAP used data from Carbon Impact as an input. Not surprisingly, SAP is in the process of developing the capability to help its customers create similar sustainability reports. Similarly, SAP uses its Sustainability Performance Management product to run its internal management meetings tracking sustainability metrics and KPIs, and in turn uses its first hand knowledge for customer-facing activities.
To finish up my thoughts about SAP's focus on sustainability, I'm going to refer back to a blog I wrote in November 2009 after attending an SAP event in October where my favorite comment from Larry Bossidy was "Be prepared to change your mind in the face of data." I think that's good advice when it comes to sustainability. All manufacturers can benefit from seeing their sustainability data clearly, to make the kinds of decisions that will benefit their business and environmental sustainability performance, with IT as the enabler and the enforcer for the data and the processes those sustainability decisions require.