Information Systems for Environmental Sustainability

IT, Resource Productivity, Environmental Preservation, and the Fourth Industrial Revolution

Strategic Sustainability Information Management (SIM)

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AMR Research surveyed 189 U.S.-based manufacturing firms about their 2010 sustainability and GHG information management practices. My reading of the report supports a set of trends and patterns that are consistent with what I observe in my own research: 1) SIM is strategic; 2) the sustainability information silo is crumbling rapidly; 3) SIM capabilities  do not meet SIM requirements. Detail follows.

1. Sustainability information management (SIM) is strategic

Listing the top drivers for enterprise sustainability initiatives, competitive advantage dropped in the 2008-2010 time period from 33-12% and business value dropped from 29-28% but compliance increased from 11-27% (leaving aside the issue of unreported standard error, which would indicate whether these differences are statistically significant).

AMR interprets these trends as “a great leap backwards”. I interpret as one-shot rapid response to 2010 EPA Mandatory Reporting Rule (as in now), i.e., perturbation on a long-term trend rather than a structural shirt. Supporting this is their own conclusion that

Companies are going to require smart information-enabled application support. This is a focus of real change in the manufacturing and wider economy— and its where sustainability directly connects to cash.

We are seeing the emergence of many lenses through which to define the sustainable software landscape. An important area of differentiation is the development of solutions designed to support either strategic, aggregated top-down approaches or granulated and typically operational bottom-up approaches. Currently the market is seeking and being supported by one or other approach. We anticipate that in the future we will see the increased merging of these patterns to develop fully integrated and smart solutions.

2. Information requirements are shifting from standalone to business ecosystem sharing

Organizational requirements for greater transparency of sustainability data combined with external regulatory reporting demands is shifting the scope of SIM. As an offshoot, more probing eyes will examine the data, meaning that its accuracy and reliability will be under greater scrutiny. As the report discusses:

Companies required to report on Scope 3 emissions will not only need to build consistency into processes and develop standards for the collecting and reporting on embodied carbon and other environmental factors inside products, but they will also need to be able to share this information throughout the supply chain.

3. Information capabilities lag rapidly changing information requirements

Excel and other in-house systems with “multiple versions of the truth” still dominate:

Delaying this realization [of standardization/complete integration], not to mention the emergence of more complete architectures, are the mass of in-house constructed, legacy systems approaches and continued reliance on Excel spreadsheets. Over half of the respondents indicate reliance on these systems approaches to support their GHG management efforts, and 31% said these are the most valuable to solutions.

And employee resistance is also present:

The data shows that operational employees are still in need of education on the merits of newer deployment models. Part of any resistance they show could be attributed to the comfort level with in-house and legacy systems.

This is an understatement and may suggest/promote “managerial IT unconsciousness” (Avison et al. 2006). Prior IS research indicates that agency, usability, and other issues will play a significant role in the effectiveness of new systems that require employees to do things differently on a daily basis. Unanticipated outcomes? Low adoption rates under the radar due to “workarounds,” high turnover, questions of job skills and job definition, etc., all adding up to implementation delays, increased project cost, delayed benefit realization, and risk of failure (Some evidence of IT project challenges).

Here’s the data, splitting it by internal solutions versus outsourced solutions (though it’s not fully clear how the question was asked) [full report]:

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Author: nigelpm

Associate Professor of Information Systems, Stephen M. Ross School of Business, University of Michigan - Helping organizations to navigate digital transformation.

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