July 6, 2011
I meet with about three or four sustainability solution providers each week, getting an update on their customer and product progress and sharing our latest research plans and client inquiries in the IT-for-sustainability (ITfS) space. In the past few weeks, I heard again from vendors about their excitement for new regulatory mandates appearing on the horizon.
Whether it’s the UK government’s reaffirmation of its carbon-cutting targets or the U.S. Environmental Protection Agency’s renewed vigor on policing emissions, vendors seize on these activities as prospective catalysts for customer adoption of their ITfS solutions. Regulation, they say, will increase the urgency for companies to measure, manage, and report on sustainability metrics like resource consumption and resulting GHG emissions. And, as a result, put a knee in the curve of their revenue projections.
To which I invariably say, "Get real."
It’s not regulatory requirements that will bring ITfS into the mainstream of corporate information systems. It’s business value.
Vendor business plans that are centered around the advent of cap-and-trade limits on CO2 emissions, for example, should give pause to prospective customers, analysts, and investors in these companies. Instead, ITfS vendors should be focused on helping their customers achieve their business goals.
I spent a recent afternoon with IBM’s Institute for Business Value discussing the latest Global CIO Study. In interviews with ~ 3,000 CIOs around the world, IBM found that the No. 1 focus of efforts to help their companies grow was providing better “insight and intelligence” about operations. This includes investments in data collection and management and visualization through dashboards (i.e., core capabilities of the ECEM products).
Understanding how ITfS products fit with the real-world imperatives and aspirations of customer roles like the CIO (and CFO and others) will help vendors bring their products (and themselves) into the mainstream of business operations and business metrics reporting. Vendors that are able to link the measurement and reporting capabilities of enterprise carbon & energy management (ECEM) software to the overall imperative that CIOs feel regarding improving information and transparency about corporate operations will outperform vendors that isolate their products as responses to regulatory requirements that may or (more likely) may not be driving investment and behavior of customers.
As always, I welcome your comments and reactions.