What's in a name? Environment, Health & Safety, Carbon, Emissions, Energy, or Sustainability Management? Take your pick. The past couple months, I've been struggling through a multi-report research project that tries to achieve multiple goals, including mapping software applications that serve the spectrum of needs manufacturers have between environmental health and safety (EH&S) and sustainability. I've also defined this as the range between regulatory compliance and voluntary ste
To say this project has not been a simple task is an understatement. There's no clear division between EHS and sustainability, and thinking that one category serves regulatory compliance and the other voluntary stewardship just doesn't work when what's regulated is changing rapidly. (Check out my Energy Insights colleague Sam Jaffe' s blog about how the focus on a climate bill is transitioning to an energy bill.)
Just identifying the right vendors has been an exercise that has tested my patience. Why?
Many successful (i.e. profitable) EH&S vendors have less than 100 employees, yet they can boast brand name, satisfied clients. And yes, I am speaking to references to confirm vendor claims.
The vendor marketplace is changing rapidly, or maybe that's better stated as: it's a marketing battle more than a functionality competition.
Because there are few leaders and no market boundaries, vendors are marketing applications in such a way that we can't tell how well they address sustainability or EH&S. We can only conclusively tell how big their marketing budgets are. That's a bit of an exaggeration, but hopefully you get my point.
Combine an immature market with a large number of vendors and we have a level of chaos that creates just the kind of environment where each vendor wants to define the market in a way that is to its own advantage, based on its customer success stories, existing functionality, its upcoming product enhancements, and so on.
Here are some of the vendor taglines - environmental ERP, environmental and energy management, enterprise carbon accounting, EHS and sustainability, environmental (or EHS) compliance and information management, environmental regulatory compliance, carbon management and sustainability, environmental management optimization, energy performance management, and more variations of the same.
I'm almost relieved when a vendor's website unabashedly implies they just do EH&S or EH&S regulatory compliance, but my experience has been that the first conversation is about how the website is in the process of being revamped to reflect an increasing amount of work in the field of sustainability (or GHG or carbon or 'fill in the blank with another hot term'). Sigh.
Besides giving me the opportunity to fret about my research project, I should explain why this actually matters. Quite frankly, we can't size a market that's not well defined, and we'd like to help manufacturers that are struggling to know which vendor to compare to the next. Plus a poorly defined market creates uncertainty and extends the buying cycle, as manufacturers question whether they are comparing apples to apples (or if they should expand the selection process to compare apples to oranges).
When it comes to defining the markets (and by extension naming them), we also have to find a line because all of this functionality is serving two sets of constituents often with different priorities:
- Those that are setting the overall strategy for their company
- Those that are managing operations and executing against that strategy.
I think it's possible for one vendor to serve both groups, though not necessarily with one product, but that's one of my theories I'll be testing as I work through the vendor reference calls. One thing is for certain - I want to provide some essential guidance on how to structure a selection, whether the buyer is looking for EHS, sustainability, or both.