SAP chief sustainability officer Peter Graf defines sustainability as “increasing short- and long-term profitability by holistically managing economic, social, and environmental risks and opportunities.” This summarizes the main aspects of sustainability in today’s business world: Businesses intrinsically are not driven by green or philanthropic motivation. Therefore, for sustainability to matter to business, it must drive profitability. Companies are focusing more on how measuring sustainability can improve their processes and profitability. (For more on their increased interest, see the sidebar, “Increasing Interest in Sustainability.”)

SAP developed SAP BusinessObjects Sustainability Performance Management to enable companies to do just that. SAP BusinessObjects Sustainability Performance Management allows companies to: 

• Identify and manage opportunities that lead to a more sustainable business
• Monitor their sustainability performance in a way that’s actionable so they can execute on their strategic objectives
• Report their sustainability performance against one or often against multiple external frameworks. (For more detail, see the sidebar “External Reporting Frameworks.”)

I’ll take you through some of the features of SAP BusinessObjects Sustainability Performance Management, including reporting features, integration possibilities, and some technical considerations.

Challenges Generating Sustainability Reports

Many companies are struggling with the generation of sustainability reports in accordance with these external frameworks for multiple reasons. First, the relevant data is often spread across many people and systems and is often of a qualitative nature. Without an automated and repeatable process to gather data, resources have to focus on data collection rather than execution. Secondly, data consolidation via spreadsheets, phone calls, and emails comes with a high risk of inaccurate disclosures and a limited ability to align results to mainstream business such as organizational structures and management processes. This lack of alignment makes it difficult to implement a sustainability strategy that the rest of the organization follows. Thirdly, evolving reporting standards and manual collection result in infrequent monitoring and progress tracking. Just reporting annually provides a rear-view focus and limited insight into how to improve the business.

To overcome these challenges, executives need a solution that supports them in three key areas:

1. Achieve strategic objectives
2. Provide creditable disclosures
3. Reduce time and cost for data collection

SAP’s Two-Fold Role in the Sustainability Field

SAP is pursuing a two-fold strategy in the sustainability area as an enabler for other companies to run a sustainable business model and as a role model for a sustainable enterprise. In its role as enabler, SAP is evolving a solution portfolio against the sustainability map illustrating the sustainability requirements of an organization (Figure 1). In the context of SAP’s goal to turn the company into a role model for a sustainable enterprise, SAP has internally established a governance model for sustainability management consisting of a sustainability council and cascaded sustainability targets throughout the organization. More than 120 sustainability champions across SAP dedicate 10% of their work time to organizing initiatives across the company. In May 2010, SAP published its sustainability report for the calendar year 2009, with the data collected for the first time with its own software solution, SAP BusinessObjects Sustainability Management 1.0. The report was rated with an A+ against the Global Reporting Index (GRI) standard. You can access this report at www.sapsustainabilityreport.com.

Figure 1

SAP’s sustainability map provides a comprehensive view of the sustainability requirements of an organization and a framework to show how SAP solutions deliver value

SAP BusinessObjects Sustainability Performance Management

SAP developed SAP BusinessObjects Sustainability Performance Management in a co-innovation program with input from leading companies across many industries and regions. This approach ensured that the product addresses real-life business issues for companies across different verticals. The product was launched to the market at the end of 2009 with SAP’s internal IT department being one of its first customers. It comes with the following key capabilities:

• Performance management: Aligns sustainability key performance indicators (KPIs) with corporate objectives and risks, turns sustainability data into actionable information to help improve financial and sustainability performance, and sets goals to motivate improvement
• Reliable disclosures: Manages multiple sustainability reporting frameworks, standards, and KPIs
• Central KPI library: Includes metrics based on the GRI standard. The product is the first application to be certified by the GRI Certified Software and Tools Program, which assures the correct use of GRI copyright-protected content. The KPI library enables business users to create and update their own sustainability KPIs that may be composed of other standards, multiple tiers of subindicators, and calculations.
• Data collection: Contains guided procedures for gathering quantitative and qualitative sustainability data
• Integration: Operates standalone or integrates with other SAP applications to leverage critical business data, operational information, and performance management processes

With these capabilities, SAP BusinessObjects Sustainability Performance Management allows companies to focus more on improving sustainability performance and strategy execution, not on data gathering and report compilation. It reduces time and costs for data collection through workflow-driven procedures and automated remote system queries to SAP and non-SAP systems containing relevant data for sustainability reporting. This turns report compilation into a repeatable and auditable process and increases creditability of disclosures to stakeholders.

Building Blocks and Main Concepts of the Application

The main building blocks of the application are reporting, data collection procedures, and performance management tools (Figure 2). The application reports on KPIs pre-delivered or custom defined in the KPI library of the application. KPIs are usually defined in a multi-level hierarchy consisting of top-level core KPIs, one or multiple levels of subordinate compound KPIs, and bottom-level base KPIs.

Figure 2

Overview of the main concepts of the application

Core KPIs usually correspond to indicators from external reporting frameworks that companies want to report to their stakeholders and refer to values aggregated across the enterprise (e.g., total energy or water consumption). Since resources such as energy or water are consumed in many different locations and ways, there is no single data source to measure such KPIs. For this reason, you need to break down core KPIs into contributions from different locations and processes.

In addition, you need to take into account different units of measure across multinational locations and indirect contributions from suppliers. For example, if a company buys cotton from diverse countries or regions, you need to consider in your KPI setup that the cultivation of each type of cotton may consume a different amount of water per kilogram of cotton you purchase. You continue breaking down for KPIs until you reach the bottom level of base KPIs, which you can map to a single data source. These data sources can either be people who receive workflow-driven surveys, or SAP or non-SAP systems accessible through remote system queries.

SAP BusinessObjects Sustainability Performance Management allows you to set up reports displaying KPI data with drill-down ability to all levels of the KPI hierarchy, including target and benchmark values, and break them down by organizational units. The reports can display the data in both a tabular and graphical manner (Figure 3) and, since all data is time-stamped, you can report on data as of a given date in the past. In addition, you can bring multiple reports together into a dashboard (Figure 4). The application comes with a number of templates to create dashboards. Finally, the application provides a searchable audit trail.

Figure 3

Example report shown as table and chart

Figure 4

Example dashboard consisting of multiple reports

KPI data collection is driven by reporting frameworks that are set up in the application. A reporting framework is comprised of a selection of KPIs, organizational units for which you collect KPI data, and a reporting frequency. You can set up your organizational hierarchy in the application manually, but it’s best to synchronize the organizational hierarchy with your SAP ERP Human Capital Management (SAP ERP HCM) system.

It is also possible to localize data collection for each organizational unit, if you want to permit this. Localization makes sense when data collection can be automated only for a subset of your organizational units, or multiple languages have to be considered. According to the reporting frequencies, SAP BusinessObjects Sustainability Performance Management triggers data collection from people and systems for each reporting framework. Data collection from people is controlled by an approval workflow and surveys. The surveys are sent as data requests to holders of the role Business Contributor for the organizations selected in the setup of the corresponding reporting framework. The surveys need to be responded to within the timelines set up in the customizing of the application.

Before the responses turn into reportable data, they need to be approved by the holders of the Approver role for respective organizational units. This ensures quality control of the data collected from people. Until the adjustment deadline setup in customizing becomes effective, the roles Regional Reporting Lead and Central Reporting Lead can adjust approved data. This allows for additional consistency and quality checks of the collected data. Data collection from systems technically works through remote SAP queries or SAP NetWeaver Business Warehouse (SAP NetWeaver BW) queries to SAP systems, and Web service calls to non-SAP systems, or SAP OnDemand solutions such as SAP Carbon Impact. Data collected from systems doesn’t undergo an approval workflow.

The performance management capabilities of the application are based on balanced scorecards and target and benchmark data. You can set up scorecards in the application consisting of multiple perspectives (Figure 2). For example, you could set up a sustainability scorecard with three perspectives referring to social, environmental, and economic performance (Figure 5). Each perspective is assigned a number of strategic objectives. Each objective is measured against a core KPI, its target values, and benchmark values (optionally) (Figure 6). Color codes are mapped to percentage ranges of target achievement on both objective level and perspective level. The color codes provide an immediate visualization of sustainability performance in your scorecard.

Figure 5

Example sustainability scorecard consisting of the three perspectives (People, Planet, and Profit) with drill-down capabilities

Figure 6

Details of the objective Security Practices from the People perspective of the sustainability scorecard in Figure 5

Briefing books provide an additional and very practical capability (Figure 7). Wherever you navigate within the application to a scorecard, report, or dashboard, you can send a snapshot to a briefing book and add a comment for later presentation in a management meeting. Scorecards don’t lose their drill-down abilities when sent to a briefing book (Figure 8). It is also possible to export pages from briefing books as images and send them to stakeholders.

Figure 7

Cover page of the corporate briefing book

Figure 8

First page of corporate briefing book showing a snapshot of the Security Practices objective from the corporate sustainability scorecard

Integration Scenarios with Other SAP Solutions

You can operate SAP BusinessObjects Sustainability Performance Management standalone, but it also comes with a number of integration points with other SAP solutions:

• Integration with SAP Business Suite: Extract organizational hierarchy and material master data
• Integration with other SAP sustainability solutions: Retrieve operational information from SAP Environment, Health, and Safety Management (SAP EHS Management) and SAP Carbon Impact
• Integration with management frameworks delivered with SAP BusinessObjects Strategy Management, SAP BusinessObjects Risk Management, and SAP BusinessObjects Process Control

Let’s elaborate a bit on the last bullet point. The SAP BusinessObjects Strategy Management application manages the corporate balanced scorecard consisting of multiple perspectives and objectives measured against KPIs. You can embed sustainability objectives in multiple perspectives of your corporate balanced scorecard such as financial, internal processes, and employee and customer perspectives and make sustainability a central element in your corporate strategy. Technically, SAP BusinessObjects Strategy Management can retrieve approved and reportable KPI data from SAP BusinessObjects Sustainability Performance Management via SAP NetWeaver BW queries.

You can also leverage SAP BusinessObjects Risk Management and define risks endangering your strategic sustainability goals and tie them to key risk indicators (KRIs). SAP BusinessObjects Risk Management automatically monitors KRIs retrieving data through remote queries or Web service calls from source systems and generates alerts when they are going over limits. These alerts trigger risk reassessments and allocation of adequate risk responses to manage the risk.

Finally, in SAP BusinessObjects Process Control, define sustainability-related controls within your business processes. Then monitor and remediate them taking advantage of the automated control framework and remediation workflows included in SAP BusinessObjects Process Control. This ensures timely detection of issues during operation that could affect your sustainability performance and triggers their remediation. Technically, you can implement the automated control monitoring in several ways and monitor data in SAP BusinessObjects Sustainability Performance Management or in your operational systems.

Technical Architecture

The center stone of the technical architecture of SAP BusinessObjects Sustainability Management 1.0 is an SAP NetWeaver BW 7.01 (ABAP) server that has the BI Content 7.0.4 SP2 or higher deployed on it (Figure 9).

Figure 9

Technical architecture of SAP BusinessObjects Sustainability Management 1.0, including some example source systems for KPI data collection

In addition, you need to install two software components onto it, which contain the business logic of the application and the ABAP UI framework (Figure 3). Business users access the application via the corporate SAP NetWeaver Portal, which needs to be on release level 7.01 SP3 or higher and requires the usage type BI Java deployed on it. You can add this usage type to an existing SAP NetWeaver Portal. You need to deploy two software components on the portal, containing the SAP BusinessObjects Sustainability Performance Management portal content and the Abobe Flex UI.

From a desktop client software perspective, a browser supported by SAP NetWeaver and the Abobe Flash Player are required. For IMG customizing, you also need SAP GUI 7.10 or higher. This concludes the technical architecture of the solution. Figure 9 also shows the connectivity to three different example source systems for automated data collection: Remote Function Call (RFC)-based in the case of SAP and SAP NetWeaver BW queries to SAP systems, Web service-based for automated data collection from the OnDemand solution SAP Carbon Impact, or from non-SAP source systems.

The fact that all approved KPI data is technically stored in SAP NetWeaver BW InfoCubes provides additional flexibility for reporting because the data can be reported on by generic SAP NetWeaver means as well as SAP NetWeaver queries.

Frank Rambo, PhD

Frank Rambo, PhD, is managing a team within SAP’s Customer Solution Adoption (CSA) organization working with customers in the SAP analytics area with the objective to drive adoption of new, innovative solutions. Prior to this position, he worked eight years for SAP Germany as a senior consultant focusing on SAP security and identity management. Before he joined SAP in 1999, Frank worked as a physicist in an international research team. He lives in Hamburg, Germany.

You may contact the author at frank.rambo@sap.com.

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