Getting the Elephant Out of the Mud

• By Paul Hepperla
• Jul 27, 2010

Sustainability rhetoric has intensified in recent years. What sustainability means to an organization still remains a large, rather gray, and noisy beast, not unlike an elephant trumpeting his displeasure about being stuck in the mud – due to the fact that sustainability must be customized to each specific organization.

Over the past 20 years, if your company strived for sustainability, it did so mostly to be considered a good corporate citizen. The concept was a branding issue caught up in the echoed chant of carbon footprints, carbon baselines, carbon credits, and carbon reporting. Of course, sustainability initiatives had benefits and a chapter or two in a corporate sustainability report but these were limited in scope and not tied to real business value ─ and certainly not a corporate philosophy linked to multi-year strategies.

A growing number of companies across disparate industries (retail, financial, hospitality) are now collaborating with the supply chain for a host of energy-related initiatives. Improved communications with suppliers eliminates unnecessary maintenance visits, reduces packaging weights and enhances awareness of energy equipment needs — all of which saves money. Even though sustainability is a long-term commitment, one must not miss capitalizing on the quick wins found in operational data and lifecycle equipment management. At the same time, some companies are struggling to understand the mountain of data about sustainability metrics.

Sustainability is really about using the least amount of resources at the lowest possible cost. It is about having the information systems in place to know what is working or not working across previously uncorrelated processes. Additionally, sustainability, which is a derivative of efficiency, concerns itself with managing the bits and pieces of an organization thrown across disparate operations ─ those assets or equipment that are costly to buy, maintain, and decommission. Sustainability is the ravenous drive to know the root cause of the issues affecting an organization through the lenses of operations, service management, energy management, and environmental reporting. In order to be truly effective, sustainability must move to the core of the enterprise, closing the feedback loop of often buried processes, exposing the efficiencies gained by collaboration, and leveraging the actionable data derived from the correlation of related information.

Some organizations are on the march toward systemic changes, but a few nagging questions remain:

How can your organization begin its sustainability journey?

Why do operational efficiencies have greater leverage than environmental reporting?

How does your organization remain sustainable and keep on-track?

From the beginning, your sustainability initiative must have a clear return on investment (ROI) and justification for moving forward. Why exactly do you want to begin a sustainability project? What conditions must be met for your investment to be worthwhile?

Once those parameters are defined, you have to uncover the best ways to become operationally efficient.

A distributed enterprise cannot obtain the knowledge necessary to take action nor leverage the wisdom to avoid future mistakes without starting with an enormous level of operational data. Operational data originates from accounting systems, logistic tools, and maintenance management applications. You must bring disparate information from the bottom up across numerous data sources into a centralized data warehouse to provide the foundation for advanced business intelligence and analytics.

Data is just raw numbers. Reportable information is data processed to be useful; answering who, what, where, and when questions. Knowledge is the correlation of data and information in order to arrive at "how." This is accomplished by bringing forward the answers once hidden in data siloed across organizations. Being able to correlate anomalies across different business processes, allows better visibility, root cause analysis, and understanding of how an organization truly operates. True understanding of sustainability is the inclusion of the “why” perspective.

Sustainability is derived from a cradle-to-grave or a full lifecycle approach to equipment management, attention to a spectacular amount of operational detail, and a drive for sustainable wisdom. Wisdom is the measured, quantified, and evaluated understanding of data to the greatest detail possible across the entire organization. The wisdom necessary to drive a multi-year sustainability strategy begets the need to slog your way through the minutia of organizational data locked away in glass silos.

To maintain sustainability success, companies must keep track of the effects of a challenging economy and their ROI as well as recognize impacts to their supply chain. They also must avoid greenwashing. As sustainability has taken an increasingly larger role in the marketplace, greenwashing became more of a problem. More companies wanted to jump on the bandwagon of sustainability and began claiming their products were green, when in reality it was a stretch of the truth or an outright lie. For example, greenwashing could be publicizing one small green piece of a company when the rest is decidedly not. Most companies are taking a very conservative or “cautious communications” approach to their sustainability initiatives.

The sustainability path for many organizations is just now emerging. Much of the guesswork, slow starts and mistakes have cleared the successful path, which results from deep understanding of the true workings of an organization, actionable information to drive change, and defined ROIs to foster continuous improvement.

Sustainability cannot be considered an afterthought or a quick fix to a problem. It is a systemic change, driven by corporate strategy. The key lies in the education of what matters and in the answering of the “so, what?” before stepping into the sticky mud. The road to a sustainable enterprise requires continuous improvement over many business cycles.

As organizations move from paper-bound manual processes toward digitization, automated workflow, third-party collaboration, and real-time management, cost savings scale upward:

• from 1 to 2 percent savings by reducing paper and manual steps,
• between 5 and 8 percent savings for organizations with a $100 million energy or operations budget, and
• to 15 to 20 percent or more for active control derived from real-time data collection and management.

Achieving sustainability has immense business benefits, letting organizations ramp up efforts that not only improve operational efficiencies but also deliver cost savings and risk mitigation.