According to a study from IT analyst firm IDC and IFS, a global enterprise applications company, accurate and reliable corporate social responsibility (CSR) data is becoming increasingly important as companies are pressured to document their CSR activities and integrate sustainability and financial reporting. The need for the data is driving interest in CSR tracking tools embedded in the enterprise software.
The IDC survey, based on interviews with CFOs in global companies in eight countries - Sweden, Denmark, Norway, Poland, Germany, United Kingdom, United States and France - with an annual turnover in excess of €100m. The survey was performed in June and July this year with more than 400 phone interviews and web survey responses in a range of industry verticals.
In total, 61% of the surveyed companies stated a strong interest in embedded enterprise software to track and measure the company's impact on the environment. A comparison with a previous IDC survey in 2010 shows a growing interest in this type of software functionality.
But the focus is on embedded functionality in ERP-type solutions, rather than specialist software. IFS CTO Dan Matthews said “By investing in embedded solutions instead of third-party best-of-breed systems, companies can avoid complex and potentially costly integrations”.
At the moment, though, the survey shows that only 21% of the surveyed companies have environmental tracking and measuring functionality embedded directly in their enterprise system. Some rely on third-party product integration, but 38% are not able to track CSR impact at all. The difference with the 2010 study is that more companies are now tracking CSR-related data, but confidence in the gathered data has declined.
According to the study, 63% of companies have tried to quantify the financial contribution from CSR tracking, compared with only 23% in the 2010 study. Despite the increase in financial tracking, companies’ confidence in correctly tracking the financial contribution of CSR has fallen to 66%, from 76% in 2010.
Review: It’s no surprise that there is increasing interest in CSR software. The greater the demand for data from regulatory and other bodies, particularly for global companies, the more they are likely to turn to software solutions.
The fact that embedded solutions are favoured is also no great surprise. No doubt specialist, best-of-breed software has much greater functionality, but it represents a risk for IT departments. It can be an unknown solution from, generally, a lesser-known source. It needs to be implemented, integrated and understood. The alternative is to simply add a module to an existing SAP solution, for example. Even if it’s not so good, it will probably be good enough, and the supplier will no doubt improve the solution over time.
I’m not sure if all this is clear from this survey, though, at least not from the results released. If 21% of companies have the functionality in their enterprise system and 38% are not able to track CSR impact at all, what are the rest doing? I guess there’s quite a lot of spreadsheet use, but I’d be interested to know how many are using specialist solutions.
And I’m not sure where the fall in confidence in the data comes from. The implication is that it is as a result of the trying to quantify the financial contribution from CSR tracking. Given how much CSR reporting has developed in the last two years, I’m not surprised that ‘confidence in correctly tracking the financial contribution’ has fallen. Some of the contribution will be unclear, if not intangible.