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Data Management Concepts for Sustainability – Part 3

The SSC Team August 18, 2015 Tags: , Strategic Sustainability Consulting No comments

This article was written as an expansion of our white paper “Choosing Sustainability Management Software for your Business” published in July 2011.  If you’re looking for information on how to make your software selection, check out the full article.  If you just want to make sense of this particular topic, keep reading.  Whether you like this article or not, we want to hear from YOU so that we can continue to provide the best insight for YOU, our readers…  

Our series on Sustainability Software continues with “Data Management Concepts for Sustainability”.  In this article (Part 3 of 4), we’ll continue introducing and defining key Data Management terms (read Part 2 here).  Our end goal with this series is to enable YOU, as the Business Leader, to feel more comfortable in a technical discussion related to the various areas of Data Management, especially as related to the care and feeding of Sustainability Software packages. Being able to “talk the talk” is the best defense in the technology wilderness.  Just remember, at the basis of any technical term is a common sense business notion, and staying grounded to this notion will help keep your conversations from drifting astray.

Data Movement

Data Movement is one of the silent cost areas of Data Management.  This entails the replication of data into a system and then out of it on to another system.  For example, suppose you have selected the ideal Sustainability Software offered in a SaaS-based contract by a reputable vendor.  A qualified consultant is hired to mastermind the installation and the ideal algorithms are determined, tested and approved.  All we need now is to move the company transaction data into it and let it do its work to produce the outputs we desire.  What can be so hard about that?

Strong vendors of Sustainability Software will provide robust utilities to import data into their system and to export data from it.  These must receive special attention from your Consultant and from your IT staff who will need to know how they work, at least for diagnostic scenarios.

We list some additional considerations below.

Data In

Suppose your consultant determines your current operational control systems can supply the data your new Sustainability Software needs and a prototype has proven this to everyone’s satisfaction.  It seems like all we need to do is to rerun the prototype code every day and everything will work.

Axiom of Design:  Everything needs to be designed at least three times: Once to see if we even really want what we had in mind, once more to learn how to build the ongoing system, and once more to really build what we imagined.  Then Continuous Improvement kicks in.

You are in the process of building what is called a Data Movement Application.  Any process that is repeated will fail often in new ways not anticipated.  Yes, computers can break and humans make mistakes frequently, but tornadoes and blizzards happen too. We want repeating processes to repeat as planned, and this is why the first design of any software will be replaced.  Moreover, you are probably required to prove to an auditor that all your data is being transmitted and received with very few errors that are themselves being analyzed and accounted for.  This is motivation for an Automated Balance and Control system that manages your Data Movement and assures its accuracy and timeliness.  If you intend all the work to be “outsourced”, be sure to consider these factors in your negotiations.  At minimum, be prepared to self-ensure for these events—they will happen.

Data Out

There are two main reasons to move data out of your Sustainability Software.

  1. To provide a report for approved readers
  2. To supply calculated data to another system

Reporting is technically “easy” now with all the Business Intelligence platforms that are available.  Vendors include Microsoft, Oracle, IBM and many others.  These tools are expensive but would be cost effective for SaaS providers because they can scale to serve many end users.  They are being enhanced daily to also support information display on tablets and smart phones, so you can digest this information over the Internet from nearly any place in the world.

Data transfer to another system, however can be a different story.  This will be a Data Movement Application and all the considerations we’ve raised above apply here as well, except your system is now the supplier of data and another system is the recipient.  The complexities arise not only from engineering for repeatability, but from the likely need to translate source data so the target system can receive and interpret it appropriately.  

(TO BE CONTINUED…) 

Now that you’ve read this article, tell us what you think!  And be sure to check out the full white paper.

Data Management Concepts for Sustainability, Pt. 3

The SSC Team August 18, 2015 Tags: , , , , , , , , , , , Strategic Sustainability Consulting No comments
This article was written as an expansion of our white paper “Choosing Sustainability Management Software for your Business” published in July 2011.  If you’re looking for information on how to make your software selection, check out the full article.  If you just want to make sense of this particular topic, keep reading.  Whether you like this article or not, we want to hear from YOU so that we can continue to provide the best insight for YOU, our readers…   Our series on Sustainability Software continues with “Data Management Concepts for Sustainability”.  In this article (Part 3 of 4), we’ll continue introducing and defining key Data Management terms (read Part 2 here).  Our end goal with this series is to enable YOU, as the Business Leader, to feel more comfortable in a technical discussion related to the various areas of Data Management, especially as related to the care and feeding of Sustainability Software packages. Being able to “talk the talk” is the best defense in the technology wilderness.  Just remember, at the basis of any technical term is a common sense business notion, and staying grounded to this notion will help keep your conversations from drifting astray.

Data Movement

Data Movement is one of the silent cost areas of Data Management.  This entails the replication of data into a system and then out of it on to another system.  For example, suppose you have selected the ideal Sustainability Software offered in a SaaS-based contract by a reputable vendor.  A qualified consultant is hired to mastermind the installation and the ideal algorithms are determined, tested and approved.  All we need now is to move the company transaction data into it and let it do its work to produce the outputs we desire.  What can be so hard about that? Strong vendors of Sustainability Software will provide robust utilities to import data into their system and to export data from it.  These must receive special attention from your Consultant and from your IT staff who will need to know how they work, at least for diagnostic scenarios. We list some additional considerations below.

Data In

Suppose your consultant determines your current operational control systems can supply the data your new Sustainability Software needs and a prototype has proven this to everyone’s satisfaction.  It seems like all we need to do is to rerun the prototype code every day and everything will work. Axiom of Design:  Everything needs to be designed at least three times: Once to see if we even really want what we had in mind, once more to learn how to build the ongoing system, and once more to really build what we imagined.  Then Continuous Improvement kicks in. You are in the process of building what is called a Data Movement Application.  Any process that is repeated will fail often in new ways not anticipated.  Yes, computers can break and humans make mistakes frequently, but tornadoes and blizzards happen too. We want repeating processes to repeat as planned, and this is why the first design of any software will be replaced.  Moreover, you are probably required to prove to an auditor that all your data is being transmitted and received with very few errors that are themselves being analyzed and accounted for.  This is motivation for an Automated Balance and Control system that manages your Data Movement and assures its accuracy and timeliness.  If you intend all the work to be “outsourced”, be sure to consider these factors in your negotiations.  At minimum, be prepared to self-ensure for these events—they will happen.

Data Out

There are two main reasons to move data out of your Sustainability Software.
  1. To provide a report for approved readers
  2. To supply calculated data to another system
Reporting is technically “easy” now with all the Business Intelligence platforms that are available.  Vendors include Microsoft, Oracle, IBM and many others.  These tools are expensive but would be cost effective for SaaS providers because they can scale to serve many end users.  They are being enhanced daily to also support information display on tablets and smart phones, so you can digest this information over the Internet from nearly any place in the world. Data transfer to another system, however can be a different story.  This will be a Data Movement Application and all the considerations we’ve raised above apply here as well, except your system is now the supplier of data and another system is the recipient.  The complexities arise not only from engineering for repeatability, but from the likely need to translate source data so the target system can receive and interpret it appropriately. (TO BE CONTINUED…)  Now that you’ve read this article, tell us what you think!  And be sure to check out the full white paper.

Data Management Concepts for Sustainability – Part 2

The SSC Team August 13, 2015 Tags: , Strategic Sustainability Consulting No comments

This article was written as an expansion of our white paper “Choosing Sustainability Management Software for your Business” published in July 2011.  If you’re looking for information on how to make your software selection, check out the full article.  If you just want to make sense of this particular topic, keep reading.  Whether you like this article or not, we want to hear from YOU so that we can continue to provide the best insight for YOU, our readers…  

Our series on Sustainability Software continues with “Data Management Concepts for Sustainability”.  In this article (Part 2 of 4), we’ll continue introducing and defining key Data Management terms (read Part 1 here).  Our end goal with this series is to enable YOU, as the Business Leader, to feel more comfortable in a technical discussion related to the various areas of Data Management, especially as related to the care and feeding of Sustainability Software packages. Being able to “talk the talk” is the best defense in the technology wilderness.  Just remember, at the basis of any technical term is a common sense business notion, and staying grounded to this notion will help keep your conversations from drifting astray.

Data Modeling

This term is most commonly associated with Data Warehouse design, but is relevant to the construction of any database.  If you elect to design and build your own Sustainability Software you will find the design of its underlying database (Data Modeling) to be one of the most labor intensive steps in the process, and because Sustainability is a rapidly evolving concept, it will seem that the database changes are boundless.

Data Modelers are not only IT-savvy, but are required to be subject matter experts in the business functions of the company.  Data Modeling usually starts with vocabulary lists which are organized by a discipline called Taxonomy.  These lists are then translated into abstractions called Logical Data Models which ideally constitute the rigorous definitions of, and relationships among all the data elements required for the enterprise to function.  Then magic happens and database administrators interpret the Logical Data Models into real databases in software products such as Oracle, DB2 or SQL Server.  There are software tools like ERWin and ERStudio that assist both the modelers and DBA’s in doing this.

These are lofty goals indeed and can be expensive to implement especially if you purchase expensive tools.  Additionally, in a rapidly changing environment it can be difficult for the Modelers to keep pace with the Entrepreneurs, but if your Business requires databases to function, their models (designs) must either be purchased from vendors or created by the home team.

Since Analysis Paralysis can be costly, we encourage you to “buy” vs. “build” the database for your Sustainability Software, especially given the wide variety of SaaS solutions available in the market today.  For small to midsized companies, this is by far the most cost effective option.  If you elect a SaaS approach, all these issues will be completely hidden from view and their expenses will be shared among all the system’s users as part of the overall licensing cost.

Data Storage & Archiving

This is where the ongoing cost kicks in.  Hardware for data storage is at an all time low and trending downward, but the software licenses required are costly to buy and to maintain going forward.  Both must be periodically patched and upgraded which requires a sophisticated IT Infrastructure team.  These costs and hassles furnish more strong arguments for SaaS. 

There are also potential standards clashes with bringing in special purpose software.  For example, SQL Server is an excellent database platform for a small to midsized company, but the Sustainability package you love most might be based on DB2 and Cognos.  The benefits of the new system could easily be outrun by the cost of this big company software alone.  Remember the notion of Total Cost of Ownership, wherein it often turns out that ongoing costs exceed the installation costs dramatically.

This is the area of Data Management concerned with backups, disaster recovery, test environments, complex operational change control, etc.  Bear in mind that Sustainability is an emerging venture and that commercial and governmental influences are afoot to undermine your investment, no matter which way you start out.  It’s best to adopt the conservative approach unless your industry has specific special needs that package software has not yet addressed.

If you feel you must support your own Sustainability Software on your own premises with your own team, then make platform compatibility one of your highly loaded criteria.  If you have a SQL Server shop, try to adapt to a SQL Server-based package if possible.

One final significant consideration: regardless of who maintains the data storage servers, you will be at least partly responsible to assure all data privacy and audit best practices are followed.  If these are not contemplated in the initial setup, it is possible you will enjoy fines and audits that will eventually motivate the re-design of the storage systems (or migration to a SaaS solution!)

(TO BE CONTINUED…) 

Now that you’ve read this article, tell us what you think!  And be sure to check out the full white paper.

Data Management Concepts for Sustainability, Pt. 2

The SSC Team August 13, 2015 Tags: , , , , , , , , , , , , , Strategic Sustainability Consulting No comments
This article was written as an expansion of our white paper “Choosing Sustainability Management Software for your Business” published in July 2011.  If you’re looking for information on how to make your software selection, check out the full article.  If you just want to make sense of this particular topic, keep reading.  Whether you like this article or not, we want to hear from YOU so that we can continue to provide the best insight for YOU, our readers…   Our series on Sustainability Software continues with “Data Management Concepts for Sustainability”.  In this article (Part 2 of 4), we’ll continue introducing and defining key Data Management terms (read Part 1 here).  Our end goal with this series is to enable YOU, as the Business Leader, to feel more comfortable in a technical discussion related to the various areas of Data Management, especially as related to the care and feeding of Sustainability Software packages. Being able to “talk the talk” is the best defense in the technology wilderness.  Just remember, at the basis of any technical term is a common sense business notion, and staying grounded to this notion will help keep your conversations from drifting astray.

Data Modeling

This term is most commonly associated with Data Warehouse design, but is relevant to the construction of any database.  If you elect to design and build your own Sustainability Software you will find the design of its underlying database (Data Modeling) to be one of the most labor intensive steps in the process, and because Sustainability is a rapidly evolving concept, it will seem that the database changes are boundless. Data Modelers are not only IT-savvy, but are required to be subject matter experts in the business functions of the company.  Data Modeling usually starts with vocabulary lists which are organized by a discipline called Taxonomy.  These lists are then translated into abstractions called Logical Data Models which ideally constitute the rigorous definitions of, and relationships among all the data elements required for the enterprise to function.  Then magic happens and database administrators interpret the Logical Data Models into real databases in software products such as Oracle, DB2 or SQL Server.  There are software tools like ERWin and ERStudio that assist both the modelers and DBA’s in doing this. These are lofty goals indeed and can be expensive to implement especially if you purchase expensive tools.  Additionally, in a rapidly changing environment it can be difficult for the Modelers to keep pace with the Entrepreneurs, but if your Business requires databases to function, their models (designs) must either be purchased from vendors or created by the home team. Since Analysis Paralysis can be costly, we encourage you to “buy” vs. “build” the database for your Sustainability Software, especially given the wide variety of SaaS solutions available in the market today.  For small to midsized companies, this is by far the most cost effective option.  If you elect a SaaS approach, all these issues will be completely hidden from view and their expenses will be shared among all the system’s users as part of the overall licensing cost.

Data Storage & Archiving

This is where the ongoing cost kicks in.  Hardware for data storage is at an all time low and trending downward, but the software licenses required are costly to buy and to maintain going forward.  Both must be periodically patched and upgraded which requires a sophisticated IT Infrastructure team.  These costs and hassles furnish more strong arguments for SaaS. There are also potential standards clashes with bringing in special purpose software.  For example, SQL Server is an excellent database platform for a small to midsized company, but the Sustainability package you love most might be based on DB2 and Cognos.  The benefits of the new system could easily be outrun by the cost of this big company software alone.  Remember the notion of Total Cost of Ownership, wherein it often turns out that ongoing costs exceed the installation costs dramatically. This is the area of Data Management concerned with backups, disaster recovery, test environments, complex operational change control, etc.  Bear in mind that Sustainability is an emerging venture and that commercial and governmental influences are afoot to undermine your investment, no matter which way you start out.  It’s best to adopt the conservative approach unless your industry has specific special needs that package software has not yet addressed. If you feel you must support your own Sustainability Software on your own premises with your own team, then make platform compatibility one of your highly loaded criteria.  If you have a SQL Server shop, try to adapt to a SQL Server-based package if possible. One final significant consideration: regardless of who maintains the data storage servers, you will be at least partly responsible to assure all data privacy and audit best practices are followed.  If these are not contemplated in the initial setup, it is possible you will enjoy fines and audits that will eventually motivate the re-design of the storage systems (or migration to a SaaS solution!) (TO BE CONTINUED…)  Now that you’ve read this article, tell us what you think!  And be sure to check out the full white paper.

Data Management Concepts for Sustainability – Part 1

The SSC Team August 11, 2015 Tags: , Strategic Sustainability Consulting No comments

This article was written as an expansion of our white paper “Choosing Sustainability Management Software for your Business” published in July 2011.  If you’re looking for information on how to make your software selection, check out the full article.  If you just want to make sense of this particular topic, keep reading.  Whether you like this article or not, we want to hear from YOU so that we can continue to provide the best insight for YOU, our readers… 

Our series on Sustainability Software continues with “Data Management Concepts for Sustainability”.  In this article (Part 1 of 4), we’ll begin introducing and defining key Data Management terms.  Our end goal with this series is to enable YOU, as the Business Leader, to feel more comfortable in a technical discussion related to the various areas of Data Management, especially as related to the care and feeding of Sustainability Software packages. Being able to “talk the talk” is the best defense in the technology wilderness.  Just remember, at the basis of any technical term is a common sense business notion, and staying grounded to this notion will help keep your conversations from drifting astray. 

Data Management

The definition provided in the Data Management Association (DAMA) Data Management Body of Knowledge (DAMA-DMBOK) is: "Data Management is the development, execution and supervision of plans, policies, programs and practices that control, protect, deliver and enhance the value of data and information assets."  This term is the most general description of the collection of activities involved with data and broadly includes all the areas that we’ll introduce in this article.  If you’re really interested in more detail, check out the DAMA site at http://www.dama.org.

Data Processing

This is another very broad term representing the collection of plans, processes, people and technology tasked with the collection of transactional data (e.g. item sales in a company's retail outlets) and the subsequent calculation of summary data that has meaning to your business such as periodic sales reports.  This includes the routine computational work performed by your company's people and computers that generate output like your monthly customer invoices or accounting reports, for example.

Your Sustainability Software, in the ongoing state, would be supplied with data such as rigorous measurements of weights and volumes of raw materials and products (Collected Data) and the software installation will calculate the various indicators and reports for their respective uses (Calculated Data).  When discussing Data Processing, it is always a good grounding exercise to distinguish the Collected Data vs. Calculated Data being considered.  The two have different types of rules around them, which brings us to the next category of Data Management.

Data Governance

Data Governance is the management aspect of Data Management and has to do with identification and life cycle management of Business Rules connected with Data Management.  These rules might be driven by law, profit motivation, social norms or a myriad of other factors, but the establishment of definitions of terms and their existence in your company's soft assets is the foundation of Data Governance.  Examples of such rules include the following:

  • Meta-data Management is the collection of rules and definitions of the data elements used in your company.  It could be stored in a rigorous set of spreadsheets, or in an exotic, purpose-built system like Rochade from ASG Software.  Meta-data should have a dedicated team devoted to its maintenance and secure distribution to interested parties.  This team should include representation from both the technical side and the business side of your firm. 
  • Business and technical ownership of data quality standards for things like customer mailing addresses and formulae used in reporting. 
  • The clear specification of things like sales transactions and revenue classifications in the company's data streams. 
  • The identification and lifecycle management of your company's master lists such as store locations, product names and their reporting rollups, and a consolidated customer contact list across all lines of business.  This activity is referred to as "Master Data Management" and has taken on a life of its own by numerous software companies and consultancies but it is based on the common sense notion to "Keep your lists straight." 

Data Governance is like going to church, in that it is often postponed until there is enough confusion in the Business to make people desperate enough to try it.  It is definitely an endeavor that can start small, but requires the organization’s highest level of support.  Unlike some of the other topics presented here. Data Governance must be practiced within the confines of your corporate headquarters by your employees, perhaps augmented by technical consultants from time to time.

(TO BE CONTINUED…)

Now that you’ve read this article, tell us what you think!  And be sure to check out the full white paper.

Data Management Concepts for Sustainability, Pt. 1

The SSC Team August 11, 2015 Tags: , , , , , , , , , , Strategic Sustainability Consulting No comments
This article was written as an expansion of our white paper “Choosing Sustainability Management Software for your Business” published in July 2011.  If you’re looking for information on how to make your software selection, check out the full article.  If you just want to make sense of this particular topic, keep reading.  Whether you like this article or not, we want to hear from YOU so that we can continue to provide the best insight for YOU, our readers…  Our series on Sustainability Software continues with “Data Management Concepts for Sustainability”.  In this article (Part 1 of 4), we’ll begin introducing and defining key Data Management terms.  Our end goal with this series is to enable YOU, as the Business Leader, to feel more comfortable in a technical discussion related to the various areas of Data Management, especially as related to the care and feeding of Sustainability Software packages. Being able to “talk the talk” is the best defense in the technology wilderness.  Just remember, at the basis of any technical term is a common sense business notion, and staying grounded to this notion will help keep your conversations from drifting astray.

Data Management

The definition provided in the Data Management Association (DAMA) Data Management Body of Knowledge (DAMA-DMBOK) is: "Data Management is the development, execution and supervision of plans, policies, programs and practices that control, protect, deliver and enhance the value of data and information assets."  This term is the most general description of the collection of activities involved with data and broadly includes all the areas that we’ll introduce in this article.  If you’re really interested in more detail, check out the DAMA site at http://www.dama.org.

Data Processing

This is another very broad term representing the collection of plans, processes, people and technology tasked with the collection of transactional data (e.g. item sales in a company's retail outlets) and the subsequent calculation of summary data that has meaning to your business such as periodic sales reports.  This includes the routine computational work performed by your company's people and computers that generate output like your monthly customer invoices or accounting reports, for example. Your Sustainability Software, in the ongoing state, would be supplied with data such as rigorous measurements of weights and volumes of raw materials and products (Collected Data) and the software installation will calculate the various indicators and reports for their respective uses (Calculated Data).  When discussing Data Processing, it is always a good grounding exercise to distinguish the Collected Data vs. Calculated Data being considered.  The two have different types of rules around them, which brings us to the next category of Data Management.

Data Governance

Data Governance is the management aspect of Data Management and has to do with identification and life cycle management of Business Rules connected with Data Management.  These rules might be driven by law, profit motivation, social norms or a myriad of other factors, but the establishment of definitions of terms and their existence in your company's soft assets is the foundation of Data Governance.  Examples of such rules include the following:
  • Meta-data Management is the collection of rules and definitions of the data elements used in your company.  It could be stored in a rigorous set of spreadsheets, or in an exotic, purpose-built system like Rochade from ASG Software.  Meta-data should have a dedicated team devoted to its maintenance and secure distribution to interested parties.  This team should include representation from both the technical side and the business side of your firm.
  • Business and technical ownership of data quality standards for things like customer mailing addresses and formulae used in reporting.
  • The clear specification of things like sales transactions and revenue classifications in the company's data streams.
  • The identification and lifecycle management of your company's master lists such as store locations, product names and their reporting rollups, and a consolidated customer contact list across all lines of business.  This activity is referred to as "Master Data Management" and has taken on a life of its own by numerous software companies and consultancies but it is based on the common sense notion to "Keep your lists straight."
Data Governance is like going to church, in that it is often postponed until there is enough confusion in the Business to make people desperate enough to try it.  It is definitely an endeavor that can start small, but requires the organization’s highest level of support.  Unlike some of the other topics presented here. Data Governance must be practiced within the confines of your corporate headquarters by your employees, perhaps augmented by technical consultants from time to time. (TO BE CONTINUED…) Now that you’ve read this article, tell us what you think!  And be sure to check out the full white paper.

Tracking Progress with Your Sustainability Software

The SSC Team July 16, 2015 Tags: , , , , , , , , , , , Strategic Sustainability Consulting No comments
This article was written as an expansion of our white paper “Choosing Sustainability Management Software for your Business” published in July 2011.  Enjoy: We started with the axiom “if you want to manage it, you have to measure it”.  So now that you’ve given some thought to the software solution that you want to purchase, it’s critical for you to come up with your specific measurements.  We’re not just talking about your carbon footprint or how many gallons of water you’re using.  We’re talking about the primary way that you’ll keep score for yourself and your employees so that everyone can tell if you’re actually doing better.  We’re talking about picking your Key Performance Indicators. Type “Key Performance Indicators” into your Google search and you’ll get 6.4 million results (and counting).  With so much written elsewhere on them, we thought it would be useful to give you some suggestions on what you might want to consider implementing as your key sustainability performance indicator.  These “measurements of performance” are not a one-size-fits-all measurement – you have to figure out what makes sense for your business. The most commonly used measures reflect your company’s Green House Gas (GHG) emissions.  These may be represented as an absolute measure of your firm’s emissions (usually in tons) or in relative intensity, such as emissions per employee, emissions per retail area, or emissions per unit of production.  These GHG totals will frequently be provided as “CO2e,” or “Carbon Dioxide Equivalent,” given that CO2 is the most commonly known green house gas ahead of others such as methane, Volatile Organic Compounds (VOCs), and a host of other emissions. A second form of sustainability KPI revolves around the use of energy, water, and other inputs to a company’s business process.  This might include data on total energy or water usage or may again break down the metric on a relative intensity level.  Due to the wide variety of potential inputs and outputs for a firm’s processes, there isn’t really a standard emission measure. A third major form of sustainability KPI is focused around packaging and waste.  This may take the form of the amount or weight of packaging involved in business operations.  Or it may manifest itself as part of a “Zero Waste” pledge taken by a firm that is seeking to reduce, reuse, and/or recycle the byproducts of their business operations. A fourth and (for now) final form of sustainability KPI is that which is customized and specific to your individual business.  You know how you measure success financially, for employee performance, for sales performance, for safety performance.  Maybe these measurements are part of an intensity ratio based on a per-revenue-dollar basis, a per-billable-hour basis, or maybe they are simply expressed in absolute values (total hours of lost productivity due to accidents).  Maybe you can re-use those same measures for sustainability KPIs, or maybe you need to identify new ones. To assist with getting you started on identifying your own KPI’s, here are some quick examples that fit each of the four types mentioned above.  You could find many more from reviewing the Corporate Social Responsibility reports of the companies mentioned below as well as by reviewing your competitors, your partners, your suppliers and your customers own statements.  No matter what approach you decide to take, figure out the measures that will be the right ones for YOU.

Now that you’ve read this article, tell us what you think!  And be sure to check out the full white paper.

Sustainability Software: Total Cost of Ownership Revisited

The SSC Team July 14, 2015 Tags: , , , , , , , , , , , , , , , Strategic Sustainability Consulting No comments
This article was written as an expansion of our white paper “Choosing Sustainability Management Software for your Business” published in July 2011.  Enjoy: We touched on the TCO – Total Cost of Ownership – in the main white paper, but since the cost is such an important part of your decision making process we felt the need to dig into a little more detail.  Be sure to check in with your CFO, your CPA, your financial advisor, or with whomever else you typically engage for financial input as well.  They’ll definitely have a view of the important costs that are specific to your situation.  We’ll break the Total Cost of Ownership down into four main areas:  Acquisition, Implementation, Maintenance/Enhancement, and Growth.

Acquisition Costs...

...include all the money that you need to spend on purchasing your software solution.  They may include direct payments to your primary software vendor as well as any related software that you may need to purchase a license for.  Ideally, you’ll get all the software costs for the enterprise carbon accounting software rolled up into one cost from your vendor, but if you decide to add complementary packages or tools, they may cost you extra. Any hardware costs would also fall into this category.  You can avoid these if you choose a Software-As-A-Service (SaaS) model, but if you need to purchase new equipment for your end users – maybe laptops or tablets/phones for field data entry or memory upgrades for your existing equipment – make sure you include these costs in your TCO.  Your analysis should also account for any taxes and shipping/handling charges on hardware and software purchases.  You will most likely be able to capitalize these costs as they are related to the purchase of company assets; they may be eligible for tax credits or other incentives.  Be sure to check with your accountant for the correct treatment.

Implementation Costs...

...include all the effort necessary to install, set up, configure, test, train, and otherwise get your software ready for launch.  You may need to pay your vendor or a consultant to set up and install the software.  You also may need to allocate time for your internal associates or employees to do work as part of their day job. This internal staff cost is important – your folks may not be able to just absorb this extra work alongside their regular responsibilities.  This cost may be payment for temporary labor to come in and cover the daily office activities, or it may help you determine that you really do need to leverage your vendor or consultant to do more work.  Performing your initial data load and set up, testing all the reports and data interfaces, and training your users on how to use the tool, create reports, and otherwise maintain the information, are all critical.  You may even need to spend time (and money) educating users on why it is important to correctly track your environmental impact. Aside from all the labor costs, you might also need to set aside money for travel (to and from training, vendor locations, etc.), for incidentals (such as food and snacks for meetings and training sessions), and even simple things like office supplies to help you get the implementation done.  Similar to acquisition costs, you can most likely capitalize implementation.  However costs for tasks like training and data conversion may not be eligible for that treatment.  Again, check with your accountant for the correct handling of these costs.

Maintenance Costs...

...cover everything related to your core software system’s ongoing maintenance and enhancement that comes after the initial launch.  In some cases, your ongoing maintenance fees will be bundled with your upfront purchase – if they are, be sure you are specific about what period they cover (i.e. one year, three years, etc.) and what the correct accounting treatment is for these costs.  For planning purposes, your annual software license is approximately will typically be 20% of the upfront purchase costs of the software.  This may vary depending on a number of factors, including whether or not you are on a subscription model, so be sure you identify this with the vendor up front. Once the initial maintenance period is over, you’ll also want to make sure you account for any increases in fees that may occur.  You don’t want to get locked into using a system that suddenly escalates out of your budget a few years down the road because you didn’t get things spelled out up front.   Things like bug fixes, troubleshooting, and support are also be covered under this category.  Maintenance costs are most likely to be operational expenses.  If they’re bundled with your upfront purchase, be sure you know how to split them out appropriately – when you talk to your accounting folks, they’ll thank you for that.

Enhancement Costs...

...for the software are other types of “future costs” that you more than likely will not pay up front.  They’ll come into play when your software vendor releases version 2.0, 3.0, X.0, etc. of your software solution.  You may have the option to stay with your current version, but then you’ll miss out on all the new features, enhancements, bug fixes, and other goodies that your vendor has bundled with the new software.  Your best bet is to get a clear understanding of how often upgrades – that aren’t included free of charge – will come along and what the cost will be.  You should also be sure to capture any accompanying “implementation” costs that may be incurred.  Depending on the nature of the enhancement, you may be able to capitalize the cost as it will relate to an asset versus an operational cost, but once again be sure to check with your accountant.

Growth Costs...

...are the last major category of “future costs” that you should consider.  These costs are incurred when your usage of the software solution increases.  Maybe you start out with only a handful of users of the platform, but then want to scale up and have everyone in the company use the tool.  You may need to go from a “seat license” (for a single user) to a “site license” (for everyone at a single location) or an “enterprise license” (for everyone at your company).  Know these costs so they don’t break your business case down the road. You will also most likely increase the amount of data that you store over time.  This may be due to the addition of more sites, more data elements, or just more detail on your existing information.  Be sure you know when you’re likely to exceed a price threshold so that you can account for it in your planning process.  You may not be able to account for things like mergers and acquisitions at the present time, but you should have some idea of how you expect your business and usage of the system to grow over the next several years from your basic business planning, so be sure to include those details.  Depending on the specific driver for these costs, the accounting treatment may vary between capital and operating expense – try to provide your accountant with specifics when you talk to them.

Cost Timing...

...is important to each of these categories. Make sure you do some yearly projections so you know how much you are going to spend and when.  Your acquisition and implementation costs are most likely to occur in a relatively short time frame (maybe even in a single calendar year).  Your maintenance costs will almost certainly kick in at the start of Year 2, if not earlier.  Enhancement costs might show up yearly, beginning in Year 2 or Year 3.  Growth costs will hit whenever you hit those thresholds – try to make sure you’ve at least given yourself a year or maybe two of room in your initial contract.  You will need to consider the expected lifespan of the asset to determine just how many years forward you need to look.  A typical time frame for a smaller system may only be three years, but for a large enterprise level system that you have integrated with other major systems, you could be looking at a horizon of five or even seven years.  If you were wondering who could help you with that determination, you probably can guess who to ask: your accountant! Now that you’ve read this article, tell us what you think!  And be sure to check out the full white paper.

Choosing Sustainability Management Software for Your Business

The SSC Team April 23, 2015 Tags: , , , Strategic Sustainability Consulting No comments

This article was written as an expansion of our white paper “Choosing Sustainability Management Software for your Business” published in July 2011.  If you’re looking for information on how to make your software selection, check out the full article.  If you just want to make sense of this particular topic, keep reading. Enjoy:

Now that you’ve decided to purchase sustainability software, an important related decision is whether or not you want to do the implementation work in-house or if you want to bring on a consultant to help out.  Making the right decision will be critical to your overall project success as well as impact the total cost of ownership for your solution.  And depending on your specific situation, either answer can be the right answer.  This article covers four key considerations:  Culture, Cost, Capabilities and Confidence.

Culture

Your business culture is an important first consideration.  Either you are consultant friendly or you prefer to do projects internally.  Making a decision that fits your culture and is consistent with your values will be important throughout the project.  That’s not to say that you might not go in the other direction for a specific project, or even choose a hybrid approach to delivery; just be true to yourself, as that will contribute to project morale for the entire team regardless of who signs their paycheck.  

A hybrid approach may provide the best of both cultures for you without offending the purists on either side.  Bring in specific subject matter expertise that you don’t already have in-house and then match it up with the right internal members of your Green Team to deliver the project.  On a high performing team, your consultants should be looking to train the internal employees on all the ins and outs of the system so that eventually your people can take over and run with the operational system. A good consultant instills confidence that they provide specialized expertise and trust that you will feel comfortable to call on them for further assistance in the future, instead of keeping them on the project unnecessarily for extended or prolonged periods of time.

Cost

After culture, cost is a major factor in the DIY vs. consultant decision.  For many firms – large or small – the preliminary inclination is to try and do the work internally.  The general premise is that it will be cheaper to use people that you already are paying because there is no additional cash out of pocket like there would be with an external consultant.  Consultants seemingly come with a high, upfront, fixed cost as your employee costs are already embedded in your budget.  Don’t forget to account for the “opportunity cost” of your internal employees – after all, they would be working on something else valuable for your firm if they weren’t picked for this project.

Beyond the opportunity cost consideration, looking only at the incremental expense doesn’t address an important aspect of choosing your own internal people to do the work: Do they actually have time?  Presumably, all of your existing employees have a “day job” that brings them to work every day.  Some of them are probably even doing two or three different jobs during a regular workday.  Determining if you actually have the available slack time within your existing team members is an important determination.  After all, if you’re on a deadline and your employees just can’t carve out enough time to meet that target, it may end up costing you more money to bring consultants in later than it would have if you had engaged them at the start of your project.  If you engage them in the beginning, the consultants are competing for your business; if you wait to bring them in until later in the project, they know you are hiring them to help bail you out so the leverage has shifted into their favor.

A final cost consideration when hiring a consultant (or going the “cheaper” internal route) is that “you get what you pay for.”  This can be taken as advice that the lowest cost doesn’t always provide you with the best result – nor for that matter does the highest cost.  Just make sure that the cost is right for the work being performed and for your situation.  That brings me to the second aspect of “you get what you pay for” – which is to MAKE SURE you get what you paid for.  Pay your consultant based on their delivery of the results you are looking for on the project, not just because they send you an invoice.  If possible, get a consultant to sign up for a risk-reward component to their payment so that they will be incentivized to do a better job since some of their compensation is on the line.

Capabilities

One of the primary reasons to hire a consultant is that they have the necessary skills and/or expertise to perform the software implementation that you may not already have in-house.  Beyond the skills that they bring to the table, a consultant should also bring some other benefits to make a strong business case for hiring them.  Your consultant should bring the necessary tools, techniques, and methodologies to the table that their consultancy uses and which you don’t have.  This may be as simple as them showing up with their own laptops and software licenses that you don’t need to pay for, or them having the necessary data gathering systems to pull in all the info you need for your new sustainability software platform. 

As consultants, you are also expecting them to bring prior experience to the table.  Whether or not they’ve worked on a project exactly like what you are asking them to perform, you should be able to get veteran individual consultants and/or teams of consultants to come help you out.  And by teams, we don’t mean the kind where the senior partner sells the deal and then you don’t see him again except when he stops by infrequently to check on the team of freshly minted MBA’s that he’s actually assigned to your project.  We mean the kind of team where your senior (and junior) consultants are actively engaged on a daily basis to help you get the project done quickly and effectively – i.e. on time and on budget.

In addition to experience, your consultant may be able to offer a cost advantage, especially if their firm is already doing business with you and you can get any sort of bulk discount.  The discount opportunity may extend to software and/or hardware purchases as well since they may be able to aggregate purchases across multiple clients.  This discount opportunity may also arise if you are able to hire your software vendor as the implementation consultant.  While this may raise some concerns about “the fox guarding the hen house”, it may help keep your costs down. 

Confidence

There’s an old adage in the software industry: “No one ever got fired for hiring IBM.”  While this is generally an explanation of why you should hire a bigger firm over a smaller firm, it also illustrates the importance of having confidence in your choice.  Regardless of whether you feel the need for a big firm with vast resources, or if you prefer a smaller firm that provides a more personalized experience, the most important factor for you is that you find a good consultant that you can trust.  They should have a proven track record, have a solid network of resources they can draw on (regardless of whether they are internal or external to the consulting firm), and be able to instill the necessary confidence in you that they will deliver.  If they can’t do that, then you shouldn’t hire them.  If they’re the best solution to your need however, then by all means, hire away!

Now that you’ve read this article, tell us what you think!  And be sure to check out the full white paper.