I am working on the Sustainability area from quite some time and attended a workshop for the application “SAP Sustainability Performance Management v1.0” few days ago, so I thought of consolidating the important studies that I made and highlight on this new application for Sustainability reporting. I am planning to explain in detail about this application and its functionalities in the form of an article. However before knowing the application, we should understand clearly “Why and What” aspects of Sustainability reporting.
In one of the SAP articles, it says that – Sustainability reports are disclosed by around 80% of the Fortune 250 companies. Sustainability reporting is becoming a local mandate in EMEA (Europe, the Middle East and Africa), South Africa, and Australia. North America is feeling its importance and showing huge interest towards Sustainability reporting.
From the above statements, It can be intuited that, Sustainability Reporting may become mandatory all over the world in the near future.
This is making Sustainability a sizzling topic, nowadays, in almost all the Symposiums and an exemplar theme of Sapphire 2010.
As this topic is market-driven, the solution providers, especially the top ERP vendors like SAP, Oracle, Microsoft Dynamics, SAS, Infor Global Solutions, started to design a new product which deals with Sustainability reporting. These solutions are considered to be enablers to most of the Organizations who are looking for an application which helps them in data collection, monitoring and disclosing their sustainability potentials environmentally, economically and socially.
Now, its time to look at the important Role played by SAP in this Sustainability scope:
SAP is playing a key role as an Exemplar and an Enabler. SAP is practicing Sustainability at its place and helping Organizations to meet their own sustainability goals. It is giving Ramp-up and going for Co-innovation partnerships with the selected customers who have expertise in Sustainability reporting. A good example would be our Organization “ITC Infotech India Ltd”. ITC Limited is a leader in Sustainability and its subsidiary ITC Infotech has signed the Co-innovation agreement with SAP AG for the co-innovation of Sustainability Performance Management application.
SAP has come up with its first version of SAP Sustainability Performance Management (SAP SuPM). This application is primarily a BW 7.01 add-on and supports many KPI reporting frameworks like
• Global Reporting Initiative (GRI)
• Dow Jones Sustainability Index (DJSI)
• UN Global Compact (UNGC)
• Greenhouse Gas Protocol (GHG Protocol)
• FTSE 4 Good, ISAE3000
• AA1000 Assurance Standard
This application is available for both SAP and Non-SAP customers. It can be integrated to an existing ERP system or can be used as a stand-alone solution.
The next major thinking is about – How to get Sustainability Performance Management application?
SAP is planning to co-sell this product along with
• SAP EHS&M
• SAP BO Risk Mgt
• SAP BO Strategy Mgt
• SAP BO Process Control and
• SAP Carbon Impact
Sustainability reporting in this application mainly focuses on two aspects:
- Process Maturity and
- Reporting Maturity
Process Maturity clearly exhibits the maturity in Driving the Performance of an Organization, whereas Reporting Maturity exhibits the maturity in Data Collection.
Now, Let us consider a Case study of an Organization who is facing problems in its Sustainability reporting and how this application eases his processes.
This Organization is having two divisions. One of the divisions has implemented SAP ERP solution and the other division is having a legacy system. This organization wants to set goals and objectives, measure and manage its performance and needs to have a transparent disclosure, in terms of Economic, Environmental and Societal aspects, to all its stakeholders. But it is finding difficulty in reporting Qualitative and Quantitative data related to its environmental and societal initiatives which are linked to its business. This Organization strongly believes that any initiative is sustainable if and only if it is linked to its business. It also wants to reduce the cost involved in collection of sustainability related data and should eliminate manual errors in data collection.
Now, SAP SuPM application is well structured to address these problems in a systematic approach.
This flowchart was drawn from my understandings and it is self explanatory. I suppose it will give a good insight into the course of action
Figure 1: Flowchart of SuPM solution
One of the highlighting features of this application is that : This application can automate the entire process of data collection from various sources by using an Automated script management feature to pull the data from an existing ERP system, hence eliminating both manual errors and cost of reporting. It can also account for a transparent disclosure of all the three triple bottom line performances – Economic, Environmental and Societal.
Last but not the least, however smart the application is, the keen concern is about the business benefits to an Organization if they adopt this application. So, having said that the application is a Master piece for sustainability reporting, the Business benefits are as given below:
• Increased Corporate transparency, Improved Regulatory Compliance and hence enhanced Reputation
• Strengthening Risk awareness & management
• Build Loyalty in Consumers, Employees & other Stakeholders
• Driving cost savings through a better understanding of the enterprise’s use of energy, raw materials and other production inputs
• Establishing competitive positioning & Market differentiation
To summarize in short, SAP SuPM application is helping Organizations to have an all-in-one reporting tool which will cater to all the business needs in the area of reporting and easily helps to prioritize its strategies to execute them in an efficient way to reach & retain the highest levels of Sustainability and hence increase the shareholder value.
I am planning to write articles on SuPM v1.0 and present to you all for a better insight into the application.