The underlying challenge to incorporating sustainability successfully is to overcome applying traditional — industrial-inspired — thinking and approaches, formed and nurtured by education and businesses for more than a century.
Sustainability represents a fourth macro driver for business innovation and growth, building upon three previous waves:
Industrialization, Globalization, Digitalization, and now, “Sustainabilization”
While there are important differences among the three previous drivers, the key metrics of economic success — increasing revenue and profit — haven’t changed much. In addition, the key corporate stakeholders for companies affected by these drivers internally (e.g.,management, employees) and externally (e.g., shareholders, governments, customers) remain the same, almost.
This is different with sustainability, where metrics of success and stakeholders expand beyond the traditional levers. Hence, sustainability is about broadening the existing metrics and approaches and the very meaning of “success”. It requires systemic thinking, cross-functional and long-term orientation.
The new stakeholder is not a person or institution anymore, but the society and the environment and the new performance is the convergence of financial, social and environmental metrics. New generations of leaders will require potential employers to adopt sustainability practices instinctively, just as Gen Y and Gen Z do with digital technologies.
For IT and business consulting service providers, this means starting with the same holistic approach, focusing on helping their clients on a journey of cultural transformation rather than concentrating on simply the next cost-cutting or efficiency initiative. It also means that service providers must create innovative new services and client engagement models for their nascent sustainability practices.
New Client demands derived from Sustainability…
Multiple and shifting client stakeholders
As more companies consider sustainability a strategic component of their business, the issue is shifting away from the Sustainability or Responsibility Offices towards the Chief Executive Officer. While the IT-for-green projects might be ok with the traditional sales approach, but to get beyond those, service providers need to ramp up their capabilities and skills to act, sell, and provide solutions at executive and business level.
Different drivers, depending on client industry
Consulting demand vary drastically across industries. Energy related companies focus on clean energy and demand management. The Consumer goods sector is focused on rising consumer pressures and perceptions. The public sector wants to be a role model and is investing serious money in environmental friendly infrastructure. The general manufacturing sector, on greening supply and customer chains. Financial services…
While Europe has been the mindset leader for the sustainability movement, adoption and growth slowed down as a result of the recession. Although there is still a lot of discussion, there is less money and will to invest. Compared to Europe, US companies are less motivated by governmental or regulatory pressure but more motivated by consumer and business concerns. Meanwhile, emerging countries, especially India and China, have increasing difficulty keeping up with their demand for energy and clean energy.
Sustainability Consulting Services. Three categories into focus.
Green IT services. They continue to revolve around the data center.
As a result of the recession, many companies initiated data center optimization and consolidation projects for taking energy consumption and, hence, cost out of the business. For most IT service providers, it is and will remain the core bread-and-butter business in the near future.
IT-for-green services. This is the growth category.
Advanced collaboration technologies are beneficial not only in supporting this but also in facilitating reduction in carbon emissions by reducing commuting and business travel. However, companies and their service providers recognize that new technologies applied to traditional cultures and processes won’t be effective. Change management and organizational efforts must go hand-in-hand.
In parallel, technologies to improve transparency and linkage between financial measures and sustainability measures are the other key drivers in the IT-for-green services category.
Green business services. It moves beyond assessments and marketing.
The next evolutionary step will be ongoing service engagements — rather than fixed duration
projects — around strategy, organizational change, and sustainability measurement and communication. Ongoing provision of analysis, recommendations, and priorities will position consulting service providers as strategic sustainability service partners for their clients.
Many IT Service providers have Sustainability as core of their strategy (way ahead of some of their customers). Some others are moving fast in embracing sustainability, for their and their customers’ good.
In any case, there are clear and renewed opportunities for several “oldies” like collaboration, telecommuting, supply chain optimization, facility automation, lean thinking, and so on, in addition to the new ones like virtualization.
In brief, it is (sort of) a new chance to do it right and renew Customers’ confidence in IT…