From: AMR Research
Friday, March 02, 2007
Nigel Montgomery, Derek Prior
Within the next two years, 89% of companies in the United States and 62% in Europe plan to use technology to manage their corporate social responsibility (CSR) initiatives, according to a new AMR Research survey. However, while environmental issues are of prime importance in Europe, U.S. firms seem to be ahead in the integration of CSR-related data systems.
Currently, 47% of European companies either gain no CSR-related data from IT systems or have numerous disconnected systems; compare this to just 19% in the same position in the United States. Nearly half of U.S. companies (49%) claim to have some or fully integrated systems to provide information on CSR topics; 32% claim to have just started the integration process. Just 17% of European-based companies have fully integrated systems.
The survey of 150 companies, spanning multiple industries in the United States, UK, Germany, and France also revealed that close to 70% of companies have a dedicated budget for CSR initiatives, with 48% of companies having a dedicated budget for environmental initiatives.
This is particularly clear in Europe where respondent companies spend more of their CSR budget on environmental initiatives. And the budget allocation isn’t just among large companies. The survey was evenly spread across companies of all sizes, from those with less than $100M in revenue to those with more than $5B in revenue, with little variation in percentage dedicated to the initiatives because of size. Respondents were qualified based on active involvement in selecting their company’s enterprise applications and technology, and were evenly split between line-of-business (LOB) and IT roles.
Of those that are tackling the subject, the leading business reasons were as follows:
* Customer satisfaction/loyalty
* To strengthen corporate brand and reputation
* Business opportunities (cost savings, improved profits)
* Compliance to regulatory requirements
* Moral imperative
* Board of directors pushing organization in that direction
* Competitive advantage
* Strategic risk management
* To encourage product innovation
* To elevate employee morale
Disappointingly, less than one-third of the respondents are using their ERP systems to help them manage these big issues. Yet because they are integrated and enterprise-wide, ERP systems should form the foundation for managing to environmental and social business objectives, a fact backed by numerous surveys that show companies wish to use their enterprise systems.
The challenge is often that these systems can help collect historical data, but they aren’t very good at helping companies be proactive, monitoring changes in real-time and helping operatives reduce poor decisions that create more waste of environmental impact. Enterprise-wide visibility and complex proactive control requires enterprise-level information systems. Dashboards and portals on top these systems are likely to provide the answer. 43% of the respondents say a CSR dashboard would be very useful; 29% saying it is critical.
Implications for businesses of the change in attitudes toward environmental sustainability are manifesting faster than predicted. Companies are spending money now on IT systems to support initiatives; it’s not simply a future spend area.
Yet few companies have yet responded organizationally. Operations, IT finance, and IT manufacturing operations seem to play a greater role in the United States; whereas in Europe, involvement is widely spread. But a lack of a single owner could create difficulties when trying to enforce processes. Companies must have a clear idea of all the groups that should be included.
If you would like more information on this survey or are trying to tackle CSR and the environment in particular, please get in touch with nmontgomery@amrresearch.com.
