| As sustainability moves higher up the social and | | | | becomes orders of magnitude more challenging. But |
| political agenda globally, its importance within the | | | | it's that complexity that creates the software |
| corporate sphere increases correspondingly. | | | | opportunity – effective solutions will require |
| Companies looking to comply with new | | | | automation that only software can provide. |
| environmentally focused legislation (and to satisfy the | | | | SSON: In the absence of robust legislation requiring |
| growing demand among consumers for verifiably | | | | firms to quantify fully the environmental impact of |
| green products) are beginning to address the need to | | | | their supply chains what are the incentives for them |
| demonstrate sustainable practices throughout their | | | | to do so (thus justifying the investment in new |
| supply chain - including activities well beyond their | | | | appropriate software)? |
| own hands-on involvement. | | | | WW: Regulatory pressure will be very important, but |
| Industry analysis firm Ovum recently released a | | | | so will consumer demand. Already, consumers are |
| report entitled Green Supply Chains: A Large but | | | | showing a preference for "green" products and in |
| Daunting Opportunity, looking at how the increased | | | | some cases a willingness to pay a bit more for them. |
| attention paid to sustainable issues will create | | | | At some point the question changes from "Is this |
| significant potential for firms able to provide suitable | | | | product ‘green'?" to "How can I trust that it's |
| software solutions which give companies accurate | | | | ‘green'?" Answering that question will drive |
| and deep data on the environmental impact of their | | | | market creation/adoption of standards and |
| supply chains. SSON spoke with Ovum research | | | | verification processes. Investors also have an interest |
| director Warren Wilson about the issue in question, | | | | – for example, as consumers begin to favor |
| asking what exactly are the drivers behind this | | | | companies with better environmental track records, |
| "daunting opportunity" - and which firms stand to | | | | and as carbon becomes a tradable commodity. |
| profit from the situation… | | | | SSON: What will be the cost implications of new |
| SSON: Warren, why is supply-chain management | | | | software of this type? Can't - won't - major |
| becoming an increasingly key area for organizations | | | | companies that do wish to quantify this impact |
| with regards to their environmental and sustainability | | | | develop in-house solutions? |
| policies? | | | | WW: As always, costs will be high initially, so early |
| Warren Wilson: Supply-chain management is becoming | | | | adoption will be limited to organizations with pressing |
| important to sustainability because, one, organizations | | | | needs. As the need become more widespread (as |
| face increasing pressure (from consumers, regulators, | | | | regulations proliferate and consumer demand |
| even investors) for environmental accountability; and | | | | increases, for example), software vendors will have |
| two, accountability requires the collection and | | | | increasing incentives to scale up these capabilities and |
| aggregation of consistent, reliable data at all steps in | | | | bring costs down. Some companies will build in-house |
| the product life cycle, from cradle to grave – i.e. | | | | solutions, but they'll be reinventing the wheel. |
| the supply (and distribution) chain. Software can help | | | | Environmental monitoring will essentially become |
| to automate that process and make it practical. | | | | another stream of data, similar to those already |
| SSON: At present, how developed is the market for | | | | managed by enterprise applications like ERP, SCM, BI; |
| software which can help companies meet their | | | | why not leverage those investments? |
| responsibilities in the areas of sustainability and the | | | | SSON: Who do you see as being the leaders in this |
| environment? | | | | new market (and why) - or is it too early to tell? |
| WW: Today the market is highly immature and | | | | WW: It's too soon to tell, but the big vendors |
| fragmented. There are many custom solutions, but | | | | certainly have important advantages in scale, installed |
| for the most part, the vendors that could deliver | | | | base, etc. In their existing solutions, they already |
| these capabilities at scale – the major enterprise | | | | have much of the horizontal capability needed to |
| application vendors – are just beginning to factor | | | | address sustainability; they're starting to acquire and |
| sustainability into their product plans. | | | | or partner for the domain expertise required to tailor |
| SSON: And how do you see this market developing | | | | these products for specific industries and markets. |
| over the next five or so years - and why? | | | | SSON: What steps can and should organizations be |
| WW: I think the next three to five years will see | | | | taking right now to prepare for the developments |
| market and regulatory pressure continue to grow; a | | | | you're predicting for the years to come? |
| lot of new software products introduced; significant | | | | WW: If ever there was a process worth the cliché |
| progress on standardizing definitions and | | | | "it's a journey, not a destination," it is environmental |
| methodologies. But mature solutions will take longer | | | | management. You don't put sustainability processes |
| – there are too many cats to herd. | | | | and tools in place and forget them; you have to |
| SSON: How likely is it that we'll see firm and globally | | | | monitor them consistently, sometimes in a fairly |
| accepted international standards for environmental | | | | fine-grained way – and software has a key role |
| data of the type under discussion put in place within | | | | to play in accomplishing that. Companies have to |
| the next decade? And how reliable can this data ever | | | | understand the requirements they will face over the |
| be? | | | | next several years, and start factoring that reality |
| WW: I'm optimistic that well-defined standards will | | | | into their IT strategies. Then they have to assess |
| emerge in much less than a decade. There are at | | | | whether their software vendor can address their |
| least a half-dozen initiatives under way, and some | | | | needs, not just today but several years out. |
| have already made great progress, so I think we'll | | | | __________________________________ |
| see significant progress as soon as one or two years | | | | This article was first published on the Shared Services |
| from now, though it will probably take longer for the | | | | & Outsourcing Network (SSON) - Read it here: |
| field to be winnowed down to a workable number | | | | About The Shared Services & Outsourcing |
| and for the industry to coalesce around those. As for | | | | Network (SSON) |
| reliability, I think we'll also see the emergence | | | | SSON is the largest and most established community |
| third-party verification/certification organizations and | | | | of shared services and outsourcing professionals, with |
| processes, similar to LEED [Leadership in Energy and | | | | over 25,000 members. |
| Environmental Design] in the building industry. | | | | SSON provides the roof under which key industry |
| SSON: You've written that delivering software | | | | experts and organizations share their experience, |
| solutions of this type "poses complex challenges" - | | | | knowledge and tools, and practitioner peers connect |
| what are the most prominent of these challenges, | | | | with other all over the world, both face to face and |
| and why the complexity? | | | | online. |
| WW: In the case of supply chain management the | | | | SSON focuses on developing its members through |
| "what" and the "why" are almost the same – it's | | | | providing training, tools, and networking opportunities. |
| the fact that you have to consider the entire life | | | | SSON staff works from international offices in New |
| cycle, all way back to source materials (iron ore for | | | | York, London, Singapore, Sydney, Berlin and Dubai to |
| the steel that goes into the auto chassis; oil that | | | | research current trends and developments in shared |
| goes into the plastic bag – and the energy used | | | | services. |
| to mine/product/process/transport those things, etc.) | | | | More information visit the Shared Services & |
| and all the way forward to disposal/recycling | | | | Outsourcing Network (SSON) website. Stay up to |
| reprocessing. It's a challenging problem even for | | | | date with SSON's latest twitter posts at twitter. |
| seemingly simple products; for highly complex ones it | | | | |