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Recently we had our Chemical Executive Advisory Council meeting, which took place in Mannheim, Germany. The Council consists of the CIO’s of major Chemical companies like BASF, Dow, Bayer, DuPont, Akzo Nobel and others.

As you could expect, a lot of discussions were around TCO and how to save costs but also other topics like sustainability were discussed. The Council had the following questions to SAP:

  • TCO and the current economic environment
    How can SAP help to reduce SAP related costs
  • Review of eSOA
    Is there proof that eSOA has lowered TCO, or raised it? What is the actual roadmap and toolset that supports the business case for eSOA.
  • Sustainability and interoperability of SAP product groups
    What is the true SAP roadmap for sustainability activities, i.e. energy management, carbon tracking, alternative raw materials, etc

For more information on the first two topics see Part 1 of this blog.

We had a very long discussion about the sustainability topic. During dinner one evening, we invited Jens Riese, who is co-leading the sustainability practice at McKinsey to speak about this topic. Already during dinner we had a very lively discussion (and almost missed the main course!). Jens had some interesting facts:

  • In the chemical industry, ratio between consuming energy and delivering products to reducing energy consumption and through that saving CO2 is 1 to 3. That means the chemical industry contributes more to energy savings than it is consuming and is delivering an active contribution to CO2 emission reduction
  • Investments in reducing carbon emissions are as high as the savings we will achieve through using less energy. It’s only a question of managing the cash flow. That means reducing CO2 emissions is free over a certain time period.
  • If you are interested in more general information check out this article from Jens posted on the SAP Chemical BPX page:
    http://www.sdn.sap.com/irj/scn/go/portal/prtroot/docs/library/uuid/90508eb1-f80a-2c10-e992-baad7ca80114

Also during dinner we prepared the topics for the next day and Jim was explaining what SAP is doing in this area:

  • Walk the Talk. SAP will reduce CO2 emissions per employee per 60% until 2020. This will be achieved by less travel, a different company car policy, better facility management, investing in communication infrastructure, Green IT and other measures. This is a very ambitious goal but we can only create credibility in the market if we as SAP also behave in a very sustainable manner. Personally this means I will give back my SUV and will replace it by a much more fuel efficient car next month.
  • Secondly we will contribute to the Green IT initiative by designing our software solutions in a way that they will consume less server capacity and therefore less energy.
  • But the biggest contribution we can bring to our customer community is through software solutions that will contribute actively to sustainability demands on our customer side. We already have solutions in the area of Product and People Safety like EH&S and REACH. Of course we will further invest in this area. We will also ship solutions for Carbon Tracking and Energy Management in the mid term. A third investment area is Sustainability Performance Management to bring all information around sustainability to the user in an auditable way. The first SPM solution will ship in Q4. Here we are also looking for co-innovation partners.
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  1. Jim Spath
    Franz:

      I appreciate this insight into industry trends and thinking, and am looking forward to your next posts.

      We will have a community lounge session at the ASUG annual conference in Orlando, co-located with SAP Sapphire, on Environment and Sustainability.  The session is scheduled for Wednesday May 13, 10:30 AM.  Those attending the conference should find this meeting on the Agenda Builder (session code 4907). I have contacted Peter Graf, among others at SAP, to invite the experts to attend.

      I will seed the Sustainability & CSR with follow up questions on how SAP plans to reduce their carbon footprint.

      Lastly, and this is a minor editorial comment – can you put links between your blogs so people can find them better? What are they thinking!?! is found here.

    Jim

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    1. Franz Hero Post author
      Thanks Jim
      Will do. Perhaps we will see each other at ASUG. I will have a session at the Chemical Industry SAP User Group.
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      1. Jim Spath
        Kieran: the RSS feed should not be compulsory, but I would expect travel, energy and other cost reductions leading to lower emissions would be part of your budget planning cycle.
        Jim
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