Enterprise hits and misses - the ESG Economy needs better software, Amazon needs a better grocery strategy, and AI needs better guardrails

Lead story - navigating the ESG Economy - can we move beyond reporting?

Seems like every enterprise software vendor - particularly those in the ERP or supply chain space - are now positioning themselves as cutting edge ESG vendors.

But we need more than better ESG reporting. In ESG start-ups - the rise of novel, not re-hashed, tech, Brian raises questions:

The current crop of ESG software products are often limited to reporting on the carbon a company has already consumed. They focus on getting data out ERP and other systems and simply placing it into a spreadsheet-like tool. It’s just reporting and it doesn’t move the needle one bit in reducing a firm’s carbon (and other) emissions.

Sigh - or ugh, take your pick. But Brian also sees new ESG vendors in play:

Some of the above technologies are dealing with byproducts – a area that gets little focus from ERP vendors. That should change. Likewise, some of the above solutions are trying to change the ‘how’ something is made. They are challenging the core production process and coming up with a very different kind of solution. Some of these solutions are looking at repurposing something. At a time when we need to reconsider items like one’s reverse logistics methods, these efforts could be quite transformational.

What will give these startups momentum? Changing venture capital expectations would help, for one. At the presentation Brian attended, perhaps that change was afoot:

What caught my attention were the metrics that these investors want their portfolio companies to achieve. Some of these included:

• Reduce carbon emissions by 0.5 GT annually when the company reaches maturity
• Gallons of water saved
• Gallons of water purified and PFAs removed
• Metric tons of carbon offset per $1000 investment
• Change in energy consumption yoy
• Reduction in amount of shipping materials used
• Transportation avoided

We can look at the ESG software market in two ways: the first? Why has it taken so darn long for systems of record to help companies manage the types of "green KPIs" Brian lists above? Why hasn't this been embedded across functions, extended into supplier screening, and beyond into measuring externalities or "byproducts" - things that aren't necessarily on the balance sheet today, but might be part of the regulatory framework sooner than later? The more optimistic take: more vendors are taking this opportunity head-on. The functionality might not be integrated across every role and function, but customers who are serious about this can use this as part of their selection criteria. And, as Brian says:

These technology advancements above are massively underhyped and, as such, stand out from things like ChatGPT. I think we need to hear more of solutions like those above instead of creating more cryptocurrencies and NFTs.

You got that right.

Diginomica picks - my top stories on diginomica this week

• Why Amazon's omni-channel retail ambitions in the grocery sector aren't looking so Fresh - Amazon isn't used to taking one on the chin, but as Stuart reports, inflation-weary consumers care more about prices than they do about next-gen cashless checkout: "So, Amazon’s main competitive differentiator isn’t that big a deal anymore, other than being costly for the retailer itself. (Amazon’s not alone here - Sainsbury’s in the UK ran into similar issues with its own techno-enthusiasm!)"
• National Archives democratizes access to court data with NoSQL and metadata - A nifty use case from Gary: "Sheridan points out that the service is believed to be the first live service based on the current legal document markup language standard."
• The arts are low-hanging fruit for unscrupulous AI vendors, say ethicists - Chris continues his analysis of the AI undertow: ""A report this week from the International Association of Privacy Professionals and FTI Technology, confirms that a key concern for businesses is the lack of legal clarity surrounding the use of AI systems."

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

• Infor CEO - ‘Our focus now is net new cloud wins, not just our existing install base’ - Derek on his London sit-down with Infor CEO Kevin Samuelson.
• NetSuite chief Evan Goldberg on 'subscription natives' and other next-gen entrepreneurs - Phil delves into why cloud ERP must encompass modern business models: "The rise of subscription-based business models is creating a new breed of business that doesn't fit into traditional categories."
• ServiceMax CEO Neil Barua - like a ‘kid in a candy store’ under PTC ownership, but prioritizing value for customers - What will ServiceMax look like under PTC? Derek gives us a first look.
• CMOs and that perilous CFO collaboration gap - are we at a turning point? - My back-and-forth with Planful CMO Rowan Tonkin hits on how CMOs can make the right business case, even as the riddle of attribution gets tricky. 

More enterprise software earnings news, with some surprises:

• "This is what we were built for!" - New Relic CEO Bill Staples' observations on a tough macro-economic climate - Stuart delves into why New Relic is overcoming the cloud spending slow down. He quotes CEO Staples: "So will optimization within our customer base happen around New Relic’s consumption services? Yes, absolutely. No vendor is immune. Every company is looking for efficiencies. But will they turn off observability? Absolutely not. And we believe the economic reset that we’re going through is ultimately just accelerating the vision that we had for observability two years ago."
• Freshworks ends fiscal year on 34% revenue growth - the CX market isn't all roses right now, but Freshworks is getting it done. One key? Moving up market. Stuart quotes Freshworks' COO: "Today, nearly 60% of our business is coming from mid-market companies, those with 251 to 5,000 employees, and enterprise customers with more than 5,000 employees."

A few more vendor picks, without the quotables:

• New Zoho Workplace features take the friction out of digital teamwork - Phil
• "The Ferrari of products" - DPD's Head of Salesforce on why the platform delivers value for the courier firm - Madeline.
• DataStax launches Astra Block - a new service aimed at helping developers more easily develop Web3 applications - Derek

Best of the enterprise web

My top seven

• Search wars: Google explains own artificial intelligence plans after Microsoft revamps Bing - I couldn't find a terrific article on this topic, but this generative AI + search face off is obviously a big story - though loaded with common misconceptions. #1: AI has been driving "search" for a long time. #2: Google's "Bard" technology is hardly a new/panicked response to Bing. Look, ChatGPT and its ilk have interesting use cases. In my view, search isn't one of them (accuracy and truth in search is kind of nice). But bring on the expensive experiment.
• Top 5 Digital Transformation Strategies During Economic Recession and Uncertainty - Eric Kimberling's back with advisory on transformation amidst uncertainty.
• The ERP platform play: Cheaper, faster, better - I see some problems with McKinsey's ERP take - instead of cheaper/faster, maybe change your entire thinking about ERP, from back office to operational backbone. Still, there are field-tested tips worth evaluating here.
• The Four Horsemen of the Tech Recession – At times, Stratechery's Ben Thompson gets too lost in the weeds of consumer tech for my taste. But this meaty piece, which breaks down some overlooked recessionary factors, shows what he can achieve: "The problem for Amazon is that not only did they (inevitably) build inefficiently, but they almost certainly overbuilt, with the assumption that the surge in e-commerce unleashed by the pandemic would be permanent."
• Breaking Down Buying Behavior (for Enterprise Technology) - Hank Barnes' research has revealed big changes in enterprise buying patters.
• ‘Hiring’ an AI Tool to Code? What to Ask at the Interview - Useful tips from The New Stack, some of which you could apply to any low-code development tool, AI or not.
• Inside the Heart of ChatGPT’s Darkness - Gary Marcus is on his game here, with a scorching deconstruction of ChatGPT's ethical guardrails. The big enterprise takeaway? Don't assume AI "guardrails" will save you from ethical scrutiny - evaluate such safeguards carefully. Also see:, via The New Yorker: ChatGPT Is a Blurry JPEG of the Web.

Whiffs

If you think enterprise blockchain is doomed, just say it. If you think it's not, say that. But don't say the former when you mean the latter:

Framing tech as "doomed" or "not doomed" is cheese-ball anyhow. What we need is sharpened grasp of use cases. I believe blockchain's enterprise use cases are limited, but still deserve evaluation, especially in the public sector where decentralized/transparent systems may have special import. But few understand what it can do, because we've been told it's a revolution, or now, it's doomed. Or, it's not. How do you hammer an enterprise nail with a press clipping? Oh, and did you know The Bible is a work of... generative AI?

Question: was this the best picture choice? Not the most sensitive approach to layoff reporting. But on the other hand, the image did come from Microsoft - ouch.

Speaking of sensational headlines, is it really fair to say that this Tesla "crashed" into a private jet? Granted, the Tesla clearly can't tell a $3 million jet from a stack of styrofoam, but it's more of a nudge than a destruction. Not sure if Tesla's "summon" command is done with beta testing though... 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.