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The Sustainable Future of ERP

By Jonathan Wright | 11/17/2009 | 5:31 PM

A colleague and I recently found ourselves discussing Enterprise Resource Planning.  Whether it’s SAP, Oracle or the niche players, these IT platforms are now a major part of life for most businesses.  When they were first implemented, ERP systems typically replaced multiple server platforms with an integrated solution capable of managing a company’s data and processes from a single system.   As regulatory and environmental pressures grow, companies are now turning to these systems for additional functionality – help in executing and tracking the success of sustainability initiatives. 

It’s an interesting evolution.  When ERP systems first started out, resource planning was about people, bills of material, finances, manufacturing, warehousing, etc.  Now carbon is surfacing as a critical resource that companies must manage for their customers, shareholders and regulatory agencies. 

This shift finds ERP vendors fending off standalone solutions by adapting and building modules capable of providing data collection, project management and reporting functionality related to sustainability initiatives.  These solutions must be robust and accurate enough to meet the increasingly stringent regulatory requirements of global organizations. 

So, are we really there yet?  Not quite. While the need for businesses to provide increasingly accurate reports on carbon footprints, carbon trades and information to support product level carbon labeling is clear, a number of hurdles have to be overcome before their ERP systems can provide the industrialized, automated and accurate solutions they most desire.

Make no mistake, ERP providers are making great strides in building their sustainability offerings.  SAP has received countless awards and recognitions for its sustainability efforts.  Its annual Sustainability Report highlights these achievements, and the company’s recent acquisition of Clear Standards continues to support this trend.  

SAP is not alone in these environmentally-friendly endeavors.  Oracle has teamed with ESS and Zogix , which both specialize in carbon management and sustainability software, to enhance its offerings in the areas of sustainability reporting, planning and management.

While SAP and Oracle are the market leaders in ERP solutions, other options are available to meet the sustainability needs of businesses.  Web-based tools such as Netsuite, Acumatica and Nolapro and add-on solutions like Microsoft’s Environmental Sustainability Dashboard are also available, being marketed primarily to medium-sized companies or divisions of larger corporations.

Large or small, these solutions face similar challenges including the rather tedious task of gathering data.  Sustainability initiatives typically run the full length of a company’s supply chain.  So to really track and report success of corporate sustainability initiatives, these systems require complex streams of data.  We’re talking collecting product and SKU level waste data from manufacturing sites, securing consignment-level emissions figures from transport providers, obtaining “real time” energy consumption information from relevant utilities, etc.

 

One of the challenges in collecting this data is agreeing on scope and data standards.  Interestingly enough, while the importance of common standards is universally recognized, there is no single standards-setting body or process in place today.  Although the International Organization for Standardization is involved, it will be a long time before ISO standards proliferate; in the meantime, there is a need to drive consensus across non-governmental groups to gain critical mass.  Accenture is currently working with the World Economic Forum to address this need with organizations such as the World Business Council for Sustainable Development, the Carbon Trust and Business for Social Responsibility.

Collecting and processing large amounts of data from across the supply chain in real time is what will bring these ERP platforms from the enterprise resource planning solutions they are now to the emissions reduction platforms they strive to become.  Agreeing to common standards is a huge step towards making this a reality.

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About Jonathan Wright

Jonathan Wright

Jonathan Wright is a Singapore-based senior executive in Accenture's Supply Chain Management practice with global responsibility for the company's supply chain fulfillment client work. With 17 years' experience, he is a recognized thought leader in supply chain transformation and sustainability. He joined Accenture in 1997 after five years with Exxon Mobil Corp. Since joining Accenture, Wright has worked in the retail, communications, high-tech, and aerospace and defense sectors. He is a Fellow of the Chartered Institute of Logistics and Transportation.



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