Here’s an annotated version of today’s print story on software vendors adding tools to track energy and environmental data to their business software:
With businesses scrambling to reduce their energy use — both to save costs and limit their carbon footprint — Microsoft and other software vendors are building tools that make tracking environmental data easier.
“ERP systems are really good at giving you the financial numbers, but where they fall short is with the environment or social issues,” said Jennifer Pollard, a senior Microsoft product manager.
The Environmental Sustainability Dashboard is designed for use by a facilities manager, environmental- compliance officer or anyone in the company with the responsibility of tracking energy use and greenhouse gas emissions.
It displays graphs of direct energy usage, such as coal, oil or natural gas burned on site, and indirect usage — energy purchased from a utility. The information can be used to track efficiency programs or evaluate improvements, such as shifting from oil heat to electric.
Sole Technology, a Lake Forest, Calif., sports apparel and footwear company, has a goal of becoming carbon neutral by 2020.
George Bock, vice president of IT, said the company already uses Microsoft’s Dynamics ERP software, and the addition of the environmental dashboard is “a perfect blend for us.”
The dashboard allows the company to compile data it’s already collecting and keep track of specific efforts to reduce carbon emissions.
While the company’s carbon-neutral mandate is driven by its environmentally conscious chief executive and founder, Pierre Andre Senizergues, it is also seeing cost savings through the effort.
“Just purely on the IT side, there’s a huge opportunity for companies to be very environmentally conscious and reduce cost and overhead,” Bock said. “… The payback on it is incredibly fast.”
Dwight Klappich, a Gartner analyst who follows supply-chain applications, said there’s a major trend toward adding environmental measurement capabilities to business applications.
Some applications are very sophisticated while others are “putting a green spin on stuff they might have already been doing,” he said.
For companies to begin adopting these technologies, however, there generally has to be a clear economic benefit.
“I don’t see a lot of demand driven exclusively by being green,” Klappich said.
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Network design software, for example, helps companies plan where to build factories and distribution centers to minimize transportation costs. “Now I could add a carbon footprint” to that analysis, Klappich said.
Other software that schedules efficient routes for delivery drivers can be tuned to find routes that minimize carbon emissions, too, he said.
Microsoft’s application, Klappich said, may not provide direct solutions for reducing emissions, but it will provide information to managers tackling the problem.
Microsoft’s environmental dashboard allows data to be entered into the system along with normal business processes. For example, a clerk paying a utility bill in the ERP software can click on an “environment” tab to gather additional data, such as the type, amount and location of energy consumption. The bill’s dollar amount used to be the only number related to energy consumption in the system, Microsoft’s Pollard said.
The dashboard also accepts data through a purchase-order process, meter readings and manual entry. It also automatically calculates greenhouse-gas emissions based on energy consumption and information from utilities. (That information has to be entered manually, however.)
Warren Wilson, research director with London-based market researcher Ovum, said other major ERP vendors, including SAP and Oracle, as well as smaller players are building a range of tools to measure carbon emissions.
“There’s growing awareness, but we think there’s a lot bigger market to be tapped,” Wilson said.
One of the many challenges ahead is knowing how much of a company’s supply chain to measure.
Sole Tech, for one, is emphasizing factors within the company — “things that we can control,” Bock said. It’s also working with its factories in China, “understanding where they’re getting their power from,” Bock said. “But it’s a little harder once you get into the supply chain.”
Klappich, the Gartner analyst, said the industry is still five to 10 years away from being able to do “true carbon accounting,” which measures at “a very low-level of detail … every source of carbon” and assigns it to the appropriate place within a supply chain. But there’s still much that can be done short of that full accounting.
Planet Metrics of San Bruno, Calif., makes a software tool that aims at a much broader range of environmental factors, and takes into account a company’s supply chain. The tool uses data from internal and external sources to measure raw materials, energy used in production and transportation and more.
Craig Ramini, sales director for Planet Metrics, says this broader view of a company’s carbon footprint helps executives make better decisions about trade-offs — whether to use new, environmentally friendly packaging or shift to a different supplier.
He applauded Microsoft’s dashboard as a good first step.
“Companies need to develop a competence around collecting data about their energy and environmental impact,” he said.