Enterprise hits and misses - enterprises aren't ready for ESG, SAP acquires LeanIX, and the remote work face-off continues

Lead story - ESG is here, and enterprises aren't ready.

Not long ago, I made the unpopular argument that generative AI is sexy, but ESG has teeth. I don't care how sexy the tech is. In the end, the stick (compliance) is the most reliable driver of tech spend.

Risk protection can drive spending, but so does perception of risk, even if that risk doesn't materialize (see: Y2K). I'm not sure companies have calibrated their on-the-books ESG risks properly. Since I wrote that piece, my views on ESG have shifted, but only slightly.

Backchannel research has indicated to me that the flood of ESG requirements may not surge quite as dramatically in the short term. But if it's not a flood, it's certainly a river, and enterprises aren't prepared. Brian makes that case with fresh data in AuditBoard Research and a growing ESG set of requirements/risks. Brian writes:

How bad is the status quo? Short answer: bad. Too many firms are not prepared. They lack the data and systems to pull together the needed information AND the data itself may be problematic.

Brian got another angle on this issue via John Wheeler of AuditBoard, who provided context on AuditBoard's 2023 ESG Maturity Benchmarking Report: Accelerating ESG Transformation. As per Brian, the data comes down to this:

ESG is not included as part of ERM (enterprise risk management) in a strategic way in many organizations.

The sledding gets tougher. The AuditBoard report found:

46% of our respondents reported that there is no dedicated budget allocated for ESG. Among those with an ESG budget, only 9% have a budget allocated for ESG technology.

Brian is salty:

This is NOT how you manage risk.

If better ESG data is the answer, we have another problem. Brian quotes the report:

While 72% of our respondents track at least some ESG data metrics across their physical locations, offices, and manufacturing plants, only 17% centralize ESG data collected on a regular basis and make it accessible to internal stakeholders. 

What should enterprises do? Brian advises moving from an incremental to a systematic approach to these "evolving ESG and risk requirements." He warns: this is going to fall on the CFO's lap, and soon. As for generative AI, I'm not naive enough to believe enterprises will set generative AI aside for ESG concerns. But I've always been in the walk (AI) and chew gum (ESG) camp. The notion that enterprises can't move ahead on several priorities is ludicrous. But so far, the indicators raise concerns.

Diginomica picks - my top stories on diginomica this week

• Forget demographics, think 'customer cohorts' - Lands' End gets to grips with knowing its customers better. (Just don't mention Kohl's...) - Stuart updates on Lands' End's retail highs and lows - with the Kohl's partnership providing many of the lows.
• Deutsche Bank doubles down on generative AI after laying foundations with Google Cloud - Derek filed a use case from Google Cloud Next: "Perez said that AWS basically hands over a set of APIs and tells you to get on with it, whilst Microsoft adopts a 'somewhere in the middle' approach. Whereas Google Cloud was willing to be flexible and adapt."

Vendor analysis, diginomica style. Here's my three top choices from our vendor coverage:

• HubSpot rethinks Sales Hub with added AI capabilities to tackle 'activity armageddon' - Barb reviews HubSpot's Inbound announcements: "Michael Walton, HubSpot VP of Product, Sales Hub, says the firm wanted to attack a problem widely seen in the market today - the use of disjointed tools and data."
• Slack matures as a workflow automation platform, juiced with native AI - with Dreamforce set to kick off, Phil previews what's next for Slack: "Rather than being a separate menu item in the new UI, Slack AI will bring a set of capabilities that are embedded throughout the product where they're most relevant."
• The principles of customer-centric ERP - how does AI fit in? Acumatica's Ali Jani shares field lessons - Think getting to customer-centric ERP is easy? Think again. To achieve it, even cloud ERP vendors have to change. In this diginomica exclusive, Acumatica's CPO gives me their principles of customer-centric ERP.
• Tom Siebel goes on generative AI offensive with investors, as C3.ai scores some major US defensive wins - C3.ai plans to double down on generative AI. As Stuart reports, investors are conflicted. Which leads us to a classic Stuart quote: "That’s not a message that is likely to appeal to a certain investor mindset, but if anyone knows how to play a long game in the enterprise tech space, it’s Tom Siebel. It’s hard to disagree with him - and believe me, I’ve got decades of practice at disagreeing with Tom Siebel!"

A few more vendor picks, without the quotables:

• DocuSign continues to show signs of recovery as it delivers solid Q2 2024 - Derek
• Vodafone offers AI-powered call Analysis-as-a-Service - Gary
• IFS acquires Falkonry AI to make it easier to find anomalies on the shop floor and beyond - Phil

Jon's grab bag - I took a different tack for my latest events missive, Can we fix enterprise events - by designing for serendipity?

In this post, I am throwing down the gauntlet - on myself. I will keep my critiques in check, and leave all the hard working event planners out there with provide examples event planners can pull into fall events.

Okay, so I snuck in a bit of snark about dancers jumping out of cakes, but otherwise, I played it on the level. Still, this post caused an interesting debate on LinkedIn on how much you can design for serendipity versus vendors' event agendas, but I believe there is some promising middle ground here - as yet unclaimed.

PSA: our wall-to-wall Dreamforce coverage and analysis starts Tuesday.

Best of the enterprise web

My top seven

• AI is great at coding, but there are some massive caveats - Joe McKendrick keeps the commentary on AI-for-coding on the sharp edge, as it should be: "While software professionals are embracing AI as a power tool to build, launch, and update applications, there is also nervousness about its intellectual property and security implications. Is that AI-generated code scraped from someone else's intellectual property? Does the model draw on internal corporate data that should be kept secure?"
• If AI Can’t be Trusted, Efficacy and Efficiency Won’t Matter - with one of the biggest weeks of the CRM kicking off now, Thomas Wieberneit raises the underlying questions that we need to address: "Related to this are toxicity and bias. How does the vendor’s training — and your finetuning and re-training — make sure that the former is avoided, and the latter minimized? Both topics are highly related to the training- and test data that are used."
• SAP acquires LeanIX to focus on AI-assisted IT modernization - this is a notable acquisition by SAP, likely close to the size of Signavio. I couldn't find a good critical analysis of this that wasn't behind a sign up wall, so this Venture Beat piece will have to do for now. My early analysis: the generative AI/customer data angle of this is being underplayed. Otherwise, why not just keep LeanIX as a partner? This CIO.com post hits on issues pertaining to S/4HANA migration support as well.
• Slides From SaaStr 2023 Presentation: The Strategic Use and Abuse of SaaS Metrics - nifty slide deck from Dave Kellogg. As I said on Twitter: "Data is only useful if you allow it to change/inform your narrative not selectively reinforce it."
• OpenAI confirms that AI writing detectors don’t work - that's the thing about Pandora's Box; it was never going to close that easily...
• Turning consumer and retail companies into software-driven innovators - McKinsey makes a solid point: building commerce apps isn't nearly enough anymore.
• Rigid return-to-office mandates may backfire, experts say - that's what I like about the current narrative. All companies are not going to approach this the same way. Let's see which model prevails:

Whiffs

Speaking of which, I realize JP Morgan isn't different than most financial services companies, but boy am I rooting against them, as in JPMorgan's Jamie Dimon delivers a stern warning to remote workers:

I completely understand why someone doesn’t want to commute an hour and a half every day. Totally get it... Doesn’t mean they have to have a job here either.

Clipping that for a future "case studies in modern leadership" profile piece... re: Are Extraterrestrials Listening In On Our Phone Conversations? I'm not sure, but if this is on your top ten list of concerns there may be other problems...

Finally, it was time for another gratuitous shot at LinkedIn, and I found a way:

See you next time... If you find an #ensw piece that qualifies for hits and misses - in a good or bad way - let me know in the comments as Clive (almost) always does. Most Enterprise hits and misses articles are selected from my curated @jonerpnewsfeed.