February 1, 2012
It's a challenge for every company with a software "solution" for sale: it's a solution, but for what? Are customers looking for an all-encompassing solution to a big problem, or a targeted solution for a small problem? Do they want an interconnected suite of software modules, with a common data model, common look-and-feel, and discounted price tag, or a small-bore program that will automate a currently manual process?
For the suppliers of enterprise carbon and energy management (ECEM) software, this age-old problem is especially challenging since the range of potential functionality is so broad, and the array of potential stakeholders, influencers, and buyers is so wide.
Consider the "word cloud" depicted in Figure 1 below, which shows a subset of the labels for such software.
And in parallel, the motivations of potential buyers of ECEM shown in Figure 2 below:
Since most companies do not face cut-and-dry regulatory requirements for emissions reporting, matching up the motivations of the buyers with the functional scope of the product sellers is a time-consuming exercise of workshops, pre-sales consulting, assessments, and, inevitably, drilling a lot of dry holes.
So with everything available for ECEM — from full-blown suites of software products from the likes of SAP, Oracle, or IBM, to free web-based carbon accounting tools — how can the vendors best position themselves to prosper in this nascent market? Following the pattern of other enterprise software markets, we think ECEM adoption will play out in one of several variations of the "land and expand" strategy.
• For the big vendors, they have already "landed." IBM's Maximo asset management software has thousands of customers, likewise its Tivoli data center management software. Expanding and interconnecting these product footprints, and their user constituents, is the central opportunity for IBM and its brethren like SAP and Oracle.
• Similarly, the EH&S software companies like Enablon have "landed" too. They have deep connections with customers, albeit generally a narrower set of them and a specialized user constituency within those customers. And therefore a bigger challenge to expand beyond the heavy-emitter industries and EH&S managers that make up the bulk of their customer base.
• For the startups, the opportunity is finding a place to land. And while much of their focus is on energy management and the concrete, cost-reduction ROI that it can deliver, I continue to get more inquiries from Forrester clients about carbon accounting. A big hospitality company looking to get off of Excel. A European food company looking to support its integrated report strategy. A giant manufacturer looking to simplify its CDP reporting. These kind of narrow-gauge requirements are the starting point for companies with well-crafted point products.
And for all the vendors, agility is paramount. They must be able to helicopter up and down, from enterprise suite to point product, as customer requirements evolve.
SAP has developed "quick start" programs that address specific use cases of prospective customers, bundling content, services, and software. And they are powering a software reporting package offered by the CDP to its members.
Meanwhile, startups like C3 showcase their comprehensive vision and product architecture, while selling products targeted at specific customer challenges and offering near-term payback on software investment.
What's your ECEM requirement set? And who are the buyers and influencers of the decision within your organization? Please weigh in below . . .