Building Sustainable Businesses: Turning Lip Service into Reality

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Building Sustainable Businesses: Turning Lip Service into Reality

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Automation companies are taking the lead in finding ways to produce alternative fuel and power sources.
When Automation World examined the rise of sustainable energy sources in March 2009, the potential economic benefits were readily apparent.

Basically, energy costs money, so saving on energy by using sustainable energy sources such as wind, solar, biomass and the like will save money. However, what was also clear was that automation vendors still had a lot of catch-up work to do to provide the infrastructure required to make the most of renewable energy sources.

Consider Biometrics LLC, a Framingham, Mass.-based-company that provides process-engineering, architectural-design and validation services to the biopharmaceutical and biomass conversion industries. Steve Fitzpatrick, Ph.D., Biometrics president and chief executive officer, points out that most of the control systems his company relies on in the biopharmaceutical and biomass conversion markets were actually designed for the oil industry. Describing his company’s circumstances as a “best fit” situation, Fitzpatrick says that the systems he was using, while good for managing liquids, weren’t flexible enough to accommodate solids and slurries—materials that are seeing more and more use as biomass technology matures.

Now a year on, progress is being made. While many of the automation systems aimed at supporting sustainable energy systems are still little more than a selection of systems cobbled together from other offerings and repackaged with a green label, many vendors are catching up with Fitzpatrick’s needs and releasing solutions tailored to meeting the requirements of the sustainable business.

Enterprise resource planning (ERP) vendor SAP AG, of Waldorf, Germany, is a case in point. At the SAP Influencer Summit in December 2009, SAP executives including Peter Graf, who fills the recently created position of chief sustainability officer, laid out the company’s strategic direction as they transform the organization and try to stake out a leadership position in the sustainable software marketplace.  With their sustainability initiatives, SAP executives are looking to position the company favorably as the economy recovers from the trials of the last couple of years and migrates to a more sustainable and resource-optimized model.

Stephen Stokes, vice president of business and climate change for AMR Research Inc., in Boston, attended the conference and wrote, “Unlike so many information and communication technology (ICT) companies, SAP has cut to the chase in building a framework to embrace sustainability.”

This framework includes a couple of key factors, starting with the way the company has been able to clearly articulate its sustainable business case to customers. Rather than getting bogged down in things like “philanthropy and triple bottom lines, [SAP] sees sustainability as the corporate imperative of increasing short- and long-term profitability by holistically managing risks and opportunities. Away from the bright media lights of Copenhagen and other public platforms, the message emerging from economic analysis of climate change and resource overexploitation is that it’s both a market failure and a potent market opportunity.”

Additionally, and most importantly, SAP has managed to define a long-term, strategic view of the corporate sustainable product space, defined the sustainability challenges organizations face and segmented a series of product domains that link together to create the company’s overall sustainable product line.

SAP is far from alone in embracing this strategic direction. IBM has its Smarter Planet initiative, and GE is continuing to pursue ecomagination, to name just two other major information technology (IT) vendors that have targeted sustainability as a business and product transformational event.

Ahead of the curve

What’s more, the traditional automation vendors are moving in the same direction, working feverishly to put together the operational systems required to actually make things work on the shop floor in a sustainable way. This is clearly different from the SAP approach, which has a different purpose: helping companies function in more efficient and sustainable ways. Automation has been geared toward doing that all along. Indeed, with real-time optimization based on information gathering and two-way communication and control, efficiency and sustainability is the whole idea behind automation, and always has been. One might even say that the SAPs and IBMs of the IT world are just catching up.

Moreover, with governments around the world, and especially in the United States, handing out billions of dollars in tax breaks aimed at incentivizing companies to become more sustainable, there will be a significant impact on the number of request for proposals (RFPs) that automation companies can expect.

“We are expecting a very strong 2010,” says Brian Micciche, president and managing director of the Crystalline Business for York, Pa.-based Komax Solar, adding that the company has already seen a ramp-up in bookings since the turn of the year. ...

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