April 26, 2011
Not that there's anything wrong with that. We have long maintained that IT organizations and the CIOs that lead them will increasingly be the owner and operator of environmental systems of record, just as they are for financial, HR, and customer data systems, among others. But, ITfS suppliers will want to develop multiple pathways into customer organizations. For most, decision-making around sustainability processes and technologies is diffuse, spread across IT, facilities, operations and CSR. Finding the buyer for sustainability is oft-times the proverbial needle in the haystack.
Let's add another potential customer pathway into the mix: finance organizations and the CFO. In their role as custodian of corporate risk management and of reporting corporate results, CFOs will increasingly be drawn into the realm of sustainability. Catalysts include the U.S. Securities and Exchange Commission requiring companies to disclose risks of climate change, and stock exchanges, such as Euronext and the Tokyo Stock Exchange, requiring reporting of environmental impact data. In addition, an emerging trend called "integrated reporting" is taking hold at companies such as Southwest Airlines, BASF, United Technologies, Nestle and Philips, where they combine financial and non-financial reporting into an integrated, interactive report to external and internal stakeholders. Given the increasing need, and eventual requirement for integrated (and interactive) reporting, we expect CFOs to be another attractive avenue for ITfS solution providers.
But it's not simply a matter of finding the way to the CFO's office for ITfS suppliers. Forrester surveys business executives and finds notable disparity between their assessment of technology's importance to the business, and the ability of business executives to understand technology solutions (see figure below). While 40 to 50 percent of business execs strongly agree that technology is fundamental to meeting business goals, and that their executive team is involved in technology decisions, only 20 percent of those same respondents strongly agree that their management understands technology.
Closing that gap between involvement and understanding represents challenge and opportunity for ITfS suppliers. For established providers, it means leveraging their existing relationships with the business clients (including finance) of their IT customers, while improving their focus on selling business outcomes rather than tech features and functions. For newcomers it means partnering with consulting and services firms that have those customer pathways into the business and finance organizations (as we have written about previously).