Poor data integration could be stymying your sustainability

Dr. Stefan Sigg Profile picture for user Stefan.Sigg January 24, 2023 Audio mode
Summary:
Data integration is a key part of the connection to reporting and monitoring on sustainability. But getting there is also a challenge for businesses. Stefan Sigg of Software AG sets out some practical pathways.

Windmill and trees in separate cubes data integration sustainability concept © 政徳 吉田 - Pixabay
(© 政徳 吉田 - Pixabay)

Of the many data challenges that have typified enterprise technology decision making, data integration looms heavy because organizations have become so dispersed. Distributed cloud architectures, complex supply chains, multi-touchpoint customer experiences and flexible working all play their part in making data handling more complicated.

And yet, the fundamental need remains the same. The precursor to achieving business intelligence from data is analysis. And a process, action or situation cannot be analyzed if the tools don’t have all the relevant data together in one place. Of course, that ‘one place’ does not have to be physical – and that’s where data integration is becoming an increasingly bright centerpiece for digital strategy.

Some of the more common integration challenges come from supply chains and customer experiences. Supply chain monitoring and execution relies on information from product designers, manufacturers, transporters, handlers, retailers and last mile delivery. All of these things help to inform lead times, stock levels, delivery times, product differentiation, not to mention the ability to be flexible and change any of these things to seize new opportunities.

Similarly, customer experience requires the connection of web, social, mobile and in-store opportunities for customers to connect with the brand, with the mechanisms behind the scenes to execute – such as delivery and inventory management.

Bridging business benefits into sustainability

This approach to integrating multiple forms of data can be replicated for another important mission – sustainability and ESG. The simple reason that supply chain and customer experience have gone first is that these activities connect to profit and loss. It’s just as true for iron ore mining as it is for high street fashion: you must efficiently execute the simple transaction of delivering your product to your customers in exchange for a fee.

Beyond the simple transaction, the differentiation of delivering the quickest and/or cheapest and/or best version of the transaction is increasingly important in getting more business. Those companies that can achieve this will also gain operational efficiency. Delivering the quickest/cheapest/best version of the product or service can also help you to thrive.

Although it’s hard to prioritize sustainability at a time of economic uncertainty, most companies believe that it should nevertheless be a high priority, because they risk losing sales, investors and employees without a transparent sustainability strategy.

Companies in a recent Software AG survey cited data integration as the second most valuable technology (behind cloud) when it came to helping with sustainability challenges that include monitoring and reporting. This isn’t a huge surprise when you consider the wide variety of factors that influence a company’s impact on the environment, individuals and society.

A look at the Green House Gas (GHG) Protocols, for example, shows how complex the data challenge can be. The full picture of performance around sustainability requires the combination of a multitude of data sources, from office buildings to supply chains to partner networks and more.

To fully understand not only the initiatives in play, but also their success and operational efficiency, requires a level of integration beyond simply laying a pathway between two platforms. This is perhaps why 28% of organizations said that data integration had a significant positive impact on their sustainability efforts.

The need for new systems of record

Data movement in the past has typically been from A to B, from a system of record with an extensive remit – such as SAP or Oracle – into a platform for analytics. However, the distributed nature of the sustainability challenge means that there is no system of record and therefore no consistent or coordinated source of data. Companies need to establish virtual systems of record – which requires a data integration platform with the ability to combine multiple data streams (and the myriad formats that entails) so that they can be analyzed.

Additionally many organizations give line of business leaders more control over their tools and platforms, which creates even more data repositories across the business. This isn’t a problem if the processes are contained to those systems, but as we have seen, most processes now spread across multiple departments, teams, geographies or platforms. The data streams that are created across these different areas have to be managed. They can look like a nest of wires, or clean managed pathways – the difference is data integration.

Sustainability efforts are not alone in trying to get their arms around a broad scope of interests and information. The multiplication factor of your more distributed business with the spread of your customers and partners amplifies the need to integrate into new systems of record, virtual or otherwise.

Building a virtual system of record

As virtual systems of record become an essential platform tool, consolidating the data from distributed tasks and processes, we need to look at how to catch up to the requirement.

The three things that go into an effective virtual system of record are:

  1. Process Analysis – to make sure that all of the right data is identified.
  2. Data Integration – to bring those disparate sources together.
  3. Accessibility – to ensure that the insight contained in this new platform reaches where it needs to go.

Data needs to be free to move around to where it’s needed, but organizations also need the tools to translate and consolidate it all in one place, or it won’t bring the value to your processes – and that includes sustainability.

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