GREEN QUADRANT ENVIRONMENTAL MANAGEMENT SOFTWARE SEPTEMBER 202 Verdantix Ltd 2007-202. Reproduction Prohibited.
GREEN QUADRANT ENVIRONMENTAL MANAGEMENT SOFTWARE September 202 EXECUTIVE SUMMARY Licensed Content The environmental management software market emerged in the 990s in response to firms evergrowing requirements to comply with strict regulations on pollutants as well as to manage, report and optimize their environmental performance. This Green Quadrant report provides a detailed fact-based comparison of 2 leading environmental management software suppliers globally. The analysis is based on interviews with 5 buyers representing firms and public authorities with over $ billion in revenue, supplier responses to a 5 point questionnaire and detailed supplier interviews. This study finds that three suppliers stand out in the market: Enablon, IHS and SAP. These suppliers lead the market thanks to the breadth of their environmental area and regulatory coverage, the extent of their software s pre-built workflows and task management processes, strong functionality for environmental reporting and performance analysis, pre-built connectors to integrate with other systems and a large customer base. TABLE OF CONTENTS THE STATE OF THE ENVIRONMENTAL MANAGEMENT SOFTWARE MARKET Environmental Management Software Market Breaches Into New Areas As Current Solutions Hit Maturity BUYERS INCREASE SPENDING FOR APPS THAT HELP THEM UNDERSTAND THEIR ENVIRONMENTAL PERFORMANCE EH&S Executives Have To Manage Expanding Environmental Programmes Buyers Will Invest In Environmental Management Software Over The Next Three Years Firms Expect A Full Set Of Environmental Management Functionality Customers Prioritize Successful Track Record And Scale In Supplier Selection Buyers Prefer Suppliers With In-House Expertise For Software Provision And Implementation GREEN QUADRANT ENVIRONMENTAL MANAGEMENT SOFTWARE Green Quadrant Methodology Evaluated Firms: Selection Criteria Evaluation Criteria For Environmental Management Software Enablon, IHS And SAP Stand Out With Extensive Off-The-Shelf Functionality Four Suppliers Offer Targeted Domain Expertise 202 Verdantix Ltd. All Rights Reserved. Verdantix, Green Quadrant, Total Portfolio and Critical Moments are trademarks of Verdantix Ltd. All other trademarks are the property of their respective companies. Verdantix clients may make one attributed copy of each figure or paragraph contained herein. Additional reproduction is strictly prohibited.
Five Suppliers Offer Highly Customizable Environmental Applications BUYERS SHOULD SELECT PROVIDERS IN LINE WITH THE MATURITY OF THEIR EH&S STRATEGY TABLE OF FIGURES Figure. Three Phases Of Environmental Management Software Market Development Figure 2. Annual Change In Spend On Environmental Management Software By 205 Figure 3. Area Coverage Requirements For Environmental Management Software Figure 4. Functionality Requirements For Environmental Management Software Figure 5. Integration Requirements For Environmental Management Software Figure 6. Data Capture Requirements For Environmental Management Software Figure 7. Environmental Management Software Suppliers Important Attributes Figure 8. Preferences For Different Types Of Software Suppliers Figure 9. Preferences For Different Types Of Implementation Services Providers Figure 0. Buyers Awareness Of Environmental Management Software Suppliers Figure. List Of The Suppliers And Software Assessed Figure 2. Capabilities Criteria For Environmental Management Software Suppliers Figure 3. Momentum Criteria For Environmental Management Software Suppliers Figure 4. Green Quadrant Environmental Management Software Suppliers Figure 5. Capability Scores For 2 Environmental Management Software Suppliers Figure 6. Momentum Scores For 2 Environmental Management Software Suppliers ORGANIZATIONS MENTIONED Accenture, Acona, ADEC Group, AECOM, Air Products, Alcoa, Alstom, American Airlines, American Electric Power, ARCADIS, Asian Paints, BAE Systems, BASF, Bayer, Bombardier, Boots, Boral Industries, BP, BSI, C3, Cairn Energy, Campbell, Carbon Disclosure Project, CarbonSystems, CA Technologies, CH2M HILL, ChemADVISOR, Chevron, CloudApps, Continental Resources, CRedit360, Crossing Automation, CyberRegs, Daikin McQuay, Daimler, Dell, Del Monte Foods, Dole Foods, Dolphin Software, Eaton, Eli Lilly, Enablon, Enviance, EnvironMax, Environmental Software Providers, Environmental Support Solutions, Environmental Systems Corporation, E.ON, European Environmental Agency, ExxonMobil, FirstCarbon Solutions, First Title, GE, GE Aviation, Gensuite, Gimv, Hara, HEICO Companies LLC, Heineken, Holly Frontier, Honeywell, Husqvarna, Iberdrola, IHS, Infor, Intelex, Intertek, irobot, KMI, Levi Strauss & Co, L Oréal, Locus Technologies, Mattel, Meg Energy, MetricStream, Michael Brandman Associates, Nestle, Nova Chemicals, Ocean Spray, Oracle, P&G, PacifiCorp, PE International, PepsiCo, PetroChina, Port of Houston, ProcessMap, SABIC Innovative Plastics, SAIC, SAP, Schneider Electric, Sears, Shaw Group, Siemens Venture Capital, Smurfit Kappa Paper, Sonic Automotive, Tata Steel, TechniData, Tesoro, The Carbon Trust, Trucost, UPS, URS, US Department of Energy, US Environmental Protection Agency, UTC - Fire & Security, Verizon Business, Vodafone, Wal-Mart, Xstrata 202 Verdantix Ltd. All Rights Reserved. Verdantix, Green Quadrant, Total Portfolio and Critical Moments are trademarks of Verdantix Ltd. All other trademarks are the property of their respective companies. Verdantix clients may make one attributed copy of each figure or paragraph contained herein. Additional reproduction is strictly prohibited.
VERDANTIX GREEN QUADRANT ENVIRONMENTAL MANAGEMENT SOFTWARE THE STATE OF THE ENVIRONMENTAL MANAGEMENT SOFTWARE MARKET Since the 970s, firms in heavy environmental footprint sectors, such as basic resources, chemicals, oil and gas, and utilities, have had to deal with environmental regulatory requirements across the world. These industries regarded environmental pollution as an unfortunate yet inevitable consequence of industrial activities, punished only by low cost fines and temporary reprimands by authorities. Since the 990s, increasing scientific evidence and global awareness about the overall impact of anthropogenic environmental pollution particularly related to climate change has led to a series of increasingly stringent regulations. In parallel, heightened financial and reputational risks associated with non-compliance and industrial environmental disasters are also driving change. This report helps environment, health and safety (EH&S) directors, VPs of Environment and Chief Sustainability Officers (CSOs) to select an environmental management software provider to help them manage and comply with environmental regulations, and to optimize their environmental performance. Major questions include: Which environmental management software suppliers are best suited to help achieve my firm s environmental management objectives? Which suppliers lead the market for enterprise environmental management software? What criteria should I use to shortlist suppliers of environmental management software? To answer these questions, Verdantix analysed 2 suppliers through detailed interviews and a 5 point questionnaire. Additionally, we conducted interviews with an expert panel composed of 5 customers or potential customers of environmental management software. The decision-makers had a global remit for EH&S and sustainability in their firm, and represented eight industries: chemicals, food and beverages, hotel and leisure, oil and gas, pharmaceuticals, public municipal sector, technology and utility. The resulting analysis is based on the proprietary Verdantix Green Quadrant methodology designed to provide an evidence-based, objective assessment of firms providing comparable products or services. Environmental Management Software Market Breaks Into New Areas As Current Solutions Hit Maturity The environmental management software market has evolved in accordance with the development of increasingly stringent environmental legislation across the world to help firms manage their environmental compliance issues. With suppliers emerging as early as the mid-990s, the market development phases consist of (see Figure ): An abundance of small-scale suppliers with limited remit during the 990s. The 990s saw a toughening of environmental regulations following industrial accidents that created severe environmental damage. For example the 984 Bhopal disaster in India led to the creation of India s Environment Protection Act in 986, and the 989 Exxon Valdez spill in Alaska led to the US Oil Pollution Act in 990. Another trigger for Verdantix Ltd 2007-202. Reproduction Prohibited. 4
CUSTOMER SUPPLIER VERDANTIX GREEN GREEN QUADRANT VERDANTIX ENVIRONMENTAL MANAGEMENT MANAGEMENT SOFTWARE SOFTWARE (GLOBAL) Figure. Three Phases Of Environmental Management Software Market Development 990s-2005 2005-202 202-2020 Number of Suppliers Rapid growth of site-level applications Maturing market through acquisitions Concentrated market Software Domain Focus Data warehousing and management Data management, analysis and reporting Data management, analysis, reporting and performance optimization Software Integration Manual interfaces and documents uploads Integration with other enterprise software and systems for almost-real time monitoring Integration with equipment-level sensors for real-time response Software Users Field staff and managers Field staff, managers and EH&S executives Field staff, managers and EH&S and sustainability executives Purchasing Objectives Compliance Compliance, risk management and reporting Compliance, risk management, reporting, environmental and sustainability performance management Project Deployment Scale Plant, site level Business unit, national Enterprise, global Source: Verdantix regulations has come from global environmental issues such as the hole in the ozone layer and acid rain, which led to regulations on CFCs, and SOx and NOx respectively. Responding to corporate demands for solutions to help them store and manage their environmental data to comply with these new regulations, an abundance of geographically focused software suppliers emerged. Field staff and plant managers used the applications on a site level, entering data manually or by document upload. Growth of enterprise-scale applications from 2005 onwards. On top of environmental regulations becoming increasingly stringent, the heightened reputational risks and costs of pollution from 2005 onwards pushed the topic of environmental management beyond compliance purposes and site-level supervision. In response, EH&S executives aim to standardize their operational practices across business units, often through the achievement of the ISO 4000 certification, and to analyse environmental data to Verdantix Ltd 2007-202. Reproduction Prohibited. 5
VERDANTIX GREEN GREEN QUADRANT ENVIRONMENTAL MANAGEMENT MANAGEMENT SOFTWARE SOFTWARE (GLOBAL) reduce the risks of failures. Market consolidation between 2005 and 203. The environmental management software market has been rapidly consolidating with several providers pursuing aggressive growth strategies. IHS has acquired Dolphin Software, EnvironMax, Environmental Software Providers and Environmental Support Solutions between 2007 and 2009 (see Verdantix IHS Builds Environmental Software Powerhouse). Acquisitions have allowed suppliers to gain market share, but also to enhance their technology capabilities and build solutions with wider domain focus and advanced functionality. Environmental management software now integrates with other systems, such as enterprise resource planning and energy management software, and with external content feeds to ensure data integrity in compliance reporting. Post-203 mature market will expand into new areas. While the market is structurally mature with significant concentration and few new entrants, solutions will continue to evolve in the areas of sustainability and supply chain in response to the demands of boardroom executives for scalable solutions. With new regulations not only requiring the reporting of environmental data, but also policing environmental performance on specific areas for example the EU Emissions Trading Scheme and the UK Carbon Reduction Commitment global firms increasingly require solutions that will provide data analytics to optimize their operations. Post-203 solutions will start to offer integration to equipment-level sensors for real-time, bi-directional communications with asset equipments to enable response to not solely monitoring of environmental issues. BUYERS INCREASE SPENDING FOR APPS THAT HELP THEM UNDERSTAND THEIR ENVIRONMENTAL PERFORMANCE Emerging in the 990s, the environmental management software market has consolidated over the years. But long-standing suppliers and new entrants are now developing new capabilities to respond to firms ever-growing requirements to manage, report and optimize their environmental performance. To drill down into purchase preferences and functionality requirements for environmental management software, Verdantix interviewed an independent panel of budget holders in 5 global firms with over $ billion in revenue. Industries represented were drawn from medium to high environmental impact sectors: chemicals, food and beverages, hotel and leisure, oil and gas, pharmaceuticals, public sector, technology and utility. Within these organizations, we spoke with decision-makers in roles such as EH&S directors, Vice President Environment and Chief Sustainability Officers. EH&S Executives Have To Manage Expanding Environmental Programmes Verdantix asked respondents in the customer panel to characterize their firms environmental programmes to better understand the drivers for enterprise environmental management software. We heard that senior managers responsible for environmental management decision-making: Verdantix Ltd 2007-202. Reproduction Prohibited. 6
VERDANTIX GREEN GREEN QUADRANT VERDANTIX ENVIRONMENTAL MANAGEMENT MANAGEMENT SOFTWARE SOFTWARE (GLOBAL) Figure 2. Annual Change In Spend On Environmental Management Software By 205 How much do you expect your firm's year-on-year spend on environmental management software to change over the next three years? Increase by more than 25% Increase by up to 25% Stay the same Decrease by up to 25% 2 Decrease by more than 25% Source: Verdantix N=5 Struggle to understand changes in the regulatory landscape. When asked about their firms environmental programme priorities over the next two years, members of the customer panel admitted that keeping track of most relevant regulatory changes is a key challenge. The main issue is to translate effectively these regulatory changes into the appropriate tasks for plant managers and field staff. In response to this customer demand, IHS acquired the EH&S regulatory online publishing platform CyberRegs in July 202 to help firms track compliance requirements and transform policy changes into sets of actionable activities for employees. "One of the most important aspects for us is being able to track and monitor changes in regulatory requirements; we need software functions that filter down requirements into our daily activities, tracking and storing all the information for EH&S compliance." (Food and beverage firm) Need to achieve environmental performance targets. Beyond meeting compliance requirements, 0 of the 5 customer panel members said that achieving resource consumption reductions aligned with corporate environmental performance targets is an overarching part of their environmental programmes. Business objectives focus on energy efficiency, carbon reduction, water quality and consumption, and waste. Take PepsiCo s strategy, which includes achieving ISO 4000 certification at its 79 US facilities and reducing energy consumption by 25% and water consumption by across its global manufacturing operations by 205 compared to a 2006 baseline (see Verdantix PepsiCo Pioneers Sustainable Water Technologies). Verdantix Ltd 2007-202. Reproduction Prohibited. 7
VERDANTIX GREEN GREEN QUADRANT VERDANTIX ENVIRONMENTAL MANAGEMENT MANAGEMENT SOFTWARE SOFTWARE (GLOBAL) Figure 3. Area Coverage Requirements For Environmental Management Software To what extent do you require monitoring of the following areas? Greenhouse gases 93% Hazardous waste 80% 3% Water 73% Non-hazardous waste 60% Air 60% 3% 2 Toxic releases 53% 2 Toxic chemicals 53% Refrigerants 4 3% Note: data labels are rounded to zero decimal places. Required Desirable Not Required Undecided Source: Verdantix N=5 "We look for continuous improvement across our entire business using our enterprise environmental management system, monitoring and reporting our performance for compliance against different legislation, but also against our own EH&S objectives." (Oil and gas firm) Manage expanding environmental programmes. Members of the customer panel highlighted the expanding nature of the programmes they are managing, moving from regionally scaled programmes to national and even international scale to better standardize practices. As they do so, firms require scalable solutions that can replace the handful of internal systems or geographically focused software solutions they have had in place to increase consistency in environmental data management and streamline reporting. To reduce complexity of managing all our environmental programmes, we are looking at streamlining the number of software packages we are using and use scalable and global solutions rather than creating links between the different solutions we have today. (Chemicals firm) Move away from conventional EH&S to look at sustainability and supply chain. Sixty percent of the customer panel said they were looking to increase the scope of issues managed under their firms environmental programmes over the next two years. Moving beyond conventional environmental issues, EH&S executives will increasingly have responsibilities related to supply chain and product-level performance, and corporate sustainability. A few forward-looking firms, such as BASF, already implement Verdantix Ltd 2007-202. Reproduction Prohibited. 8
VERDANTIX GREEN GREEN QUADRANT VERDANTIX ENVIRONMENTAL MANAGEMENT MANAGEMENT SOFTWARE SOFTWARE (GLOBAL) Figure 4. Functionality Requirements For Environmental Management Software To what extent do you require the following environmental management functionality? Automated notifications when limits approached or exceeded 8 3% Data and performance analysis 8 Task allocations and workflows to supports audits 6 3% Benchmarking and planning tools 60% 3% Automated compliance reports and permits 53% 3% Worker health and safety data and functions 53% Electronic document management 2 Automated manifests and shipping labels 2 2 3% Project management functions Real-time container tracking 2 4 Note: data labels are rounded to zero decimal places. Required Desirable Not Required Undecided Source: Verdantix N=5 initiatives that span their value chain to derive eco-innovations on top of operational improvements (see Verdantix Innovation Catalyses BASF s Sustainability Strategy). "We are looking to move away from a conventional EH&S programme to a fully integrated system through which we will monitor our environmental emissions and audit processes, report our carbon and water compliance and performance data, and manage our sustainability performance at the same time." (Technology firm) Buyers Will Invest In Environmental Management Software Over The Next Three Years With global environmental programmes to manage, EH&S directors, VPs of Environment and CSOs still struggle to understand fast-paced changes in regulatory landscapes and to manage programmes that expand into new business areas. To analyse purchasing trends, Verdantix asked the customer panel to describe its spending over the next three years (see Figure 2). Verdantix heard that: Large deals reach multi-million dollar price tags. When asked how much their firm spent on environmental management software over the past three years, six of the 5 panel members shared that they spend over $ million per year, with the largest deployment reaching $6 million per year. Spending covers software licenses, customization projects and systems integration. Yet, three customer panel members reported spending less than $200,000 per year on the management of environmental Verdantix Ltd 2007-202. Reproduction Prohibited. 9
VERDANTIX GREEN GREEN QUADRANT VERDANTIX ENVIRONMENTAL MANAGEMENT MANAGEMENT SOFTWARE SOFTWARE (GLOBAL) Figure 5. Integration Requirements For Environmental Management Software To what extent do you require integration with the following software systems? Energy management systems 53% 2 3% Sustainability management systems 4 3% ERP and/or EAM systems 4 Carbon reporting & certification systems 4 3% Health and safety systems 2 Other environmental management systems Supply chain management systems 53% Life Cycle Assessment systems 53% 3% Required Desirable Not Required Undecided Note: data labels are rounded to zero decimal places. Source: Verdantix N=5 data and systems, covering employee time to maintain spreadsheet systems and internal solutions development. We spend approximately 60% of our external spend on software licensing, on customization projects, and then on professional services. That s without looking at internal costs. (Technology firm) Most firms will increase spending over the next three years. Sixty percent of customer panel respondents said that their firm will increase expenditure on environmental management software over the next three years, with saying it will increase by more than 25% of current spend. Two customer panel members added that the increased spend will mark a shift away from internal systems to professional software solutions. These investments reflect the expansion of environmental programmes to match increasing reporting requirements. We have been under-investing for a long time, mostly just spending on employee time to keep our internal systems. But now it s time to refresh our programme to catch up with other firms. We re looking for a large scale implementation, a major upgrade. (High-Tech Engineering firm) Verdantix Ltd 2007-202. Reproduction Prohibited. 0
VERDANTIX GREEN GREEN QUADRANT VERDANTIX ENVIRONMENTAL MANAGEMENT MANAGEMENT SOFTWARE SOFTWARE (GLOBAL) Figure 6. Data Capture Requirements For Environmental Management Software To what extent do you require the following data capture functionality? Ability to import data from spreadsheets and other documents 00% Interfaces for manual data entry 93% Interfaces for sensors and other monitoring equipment 4 3% Interfaces for laboratory information systems 2 2 3% Interfaces for regulatory content aggregators 2 2 2 Interfaces for data from regulatory agencies 2 Interfaces for real-time container shipping and storage data 3% 2 53% Note: data labels are rounded to zero decimal places. Required Desirable Not Required Undecided Source: Verdantix N=5 Firms Expect A Full Set Of Environmental Management Functionality Buyers of environmental management software will increase their spending over the next three years, to deal with an increasing amount of environmental data to monitor, report and manage. When questioned on what environmental management functionality customers look for, Verdantix heard that customers require: Coverage of all environmental indicators. All but one customer panel member said that they required environmental management software to cover greenhouse gases (GHG) chemicals and their related regulations (see Figure 3). This reflects the tightening of mandatory reporting requirements across the globe, such as the US Environmental Protection Agency s GHG reporting rule, the UK s Carbon Reduction Commitment or Australia s carbon tax under the Clean Energy Legislative Package (see Verdantix Carbon Price To Boost Australian Sustainability Market). Still, 4 of customer panel members agreed that they require coverage of all environmental issues. Monitoring and analysis functionality. Customer requirements have significantly moved on from basic data warehousing and management functionality. When asked about the extent of their requirements for environmental software functionality, 8 of the panel members responded that they required automated notifications attached to compliance limits and data and performance analytics (see Figure 4). More than half the panel considered that they require functions to support audits, benchmark and plan Verdantix Ltd 2007-202. Reproduction Prohibited.
VERDANTIX GREEN GREEN QUADRANT VERDANTIX ENVIRONMENTAL MANAGEMENT MANAGEMENT SOFTWARE SOFTWARE (GLOBAL) Figure 7. Environmental Management Software Suppliers Important Attributes How important are/were the following features of a software supplier in your selection process? Proven ability to deliver value through environmental management Financial resources to compete effectively over the next two years 6 6 An existing deployment that covers at least four countries 53% Proven integration with meters and sensors in multiple domains 4 3% An existing deployment across at least 00 sites Offices in at least three countries 3% High brand awareness 3% Very Important Important Neutral Unimportant Totally Unimportant Note: data labels are rounded to zero decimal places. Source: Verdantix N=5 environmental performance, and to automatically produce compliance reports and permits. Integration with other systems. Overall, the panel regarded integration with other software and systems as a highly desirable capability for environmental management software (see Figure 5). At least 4 of customer panel members required integration with providers of energy management software, such as C3, CarbonSystems, CA Technologies and Infor; sustainability management software, such as CloudApps; or enterprise resource planning systems, such as solutions from Oracle and SAP (see Verdantix Infor Shifts From Facility To Enterprise Energy Management). Interfaces for manual and upload data capture. All customer panel members responded that they require environmental management software with the ability import data from document upload (see Figure 6). Less than half of the customer panel members currently require interfaces for sensors and other monitoring equipment. This reflects the fact that without the capacity to respond to environmental and operational issues through direct device control, the appeal for real-time data monitoring decreases. As far as environmental management for compliance reporting and performance evaluation purposes is concerned, almost real-time integration is often sufficient. Verdantix Ltd 2007-202. Reproduction Prohibited. 2
VERDANTIX GREEN GREEN QUADRANT VERDANTIX ENVIRONMENTAL MANAGEMENT MANAGEMENT SOFTWARE SOFTWARE (GLOBAL) Figure 8. Preferences For Different Types Of Software Suppliers Which category of supplier would you prefer to buy environmental management software from? (Rank in order of preference from to 4, with as the highest preference) Large environmental/ sustainability software firm 73% Specialist software firm 3% 3% Large software firm 3% 2 4 3% Audit and/or assurance firm 3% 3% 73% 2 3 4 Note: data labels are rounded to zero decimal places. Source: Verdantix N=5 Customers Prioritize Successful Track Record And Scale In Supplier Selection Customers require the full set of environmental management functionality from software suppliers: monitoring and analysis, deep levels of integration with other systems, wide coverage of environmental issues and regulations, and interfaces for quick data capture. With several solutions to choose from that provide these functionality, buyers look for specific supplier attributes in addition to product attributes when short-listing software suppliers. Buyers told Verdantix that they (see Figure 7): Want an industry-specific track record. One of the primary criteria that customers look for when selecting an environmental management software supplier is a successful and proven industry track record 6 of members said this was a very important factor. Customers want hard data as a demonstration that suppliers have delivered value in their particular industry. In a mature market suppliers will be able to provide business cases, case studies or at least anonymous references from satisfied customers as a proof point of experience. For example, Enablon s publicly available testimonies show successful cases from customers including Accenture, Eaton, L Oréal and Schneider Electric. Push to see strong underlying financial resources. The customer panel highlighted that having financial resources to operate in the market for the next two years is as important as proven value delivery, with 6 of members saying it is a very important selection Verdantix Ltd 2007-202. Reproduction Prohibited. 3
VERDANTIX GREEN GREEN QUADRANT VERDANTIX ENVIRONMENTAL MANAGEMENT MANAGEMENT SOFTWARE SOFTWARE (GLOBAL) Figure 9. Preferences For Different Types Of Implementation Services Providers Who would you prefer to implement environmental management software for your firm? (Rank in order of preference from to 4, with as the highest preference) Software supplier 3% Engineering/sustainability consultant 2 My firm's IT function/ outsourcer 2 2 3% Systems integrator Note: data labels are rounded to zero decimal places. 2 3 4 Source: Verdantix N=5 criterion. Suppliers can demonstrate strong financial resources through sales revenues and by securing external funding, as done in 200 by PE International, who secured $0.8 million in venture capital from Siemens Venture Capital and investment company Gimv. Expect suppliers deployment capabilities to match their programme scale. Eight customer panel members said that having an existing deployment that covers at least four countries is very important when choosing environmental management software. In parallel, of the customer panel also believes that having existing deployments across at least 00 sites is very important. This reflects customer preferences for solutions to match the expanding scale of their environmental programmes. For example, ExxonMobil s deployment of Locus Technologies Environmental Information Management solution covers over 3,000 sites across 4 countries and counts,000 users. Look for proven integration with equipment systems. Verdantix heard that of customer panel members think that proven integration with meter and sensor systems in manufacturing plants and commercial building is a very important factor when picking a supplier. Most software integrates with equipment systems in almost real-time through pre-built connectors with data historians or customized application programme interfaces (API). A few suppliers provide complementing enterprise asset management (EAM) applications to offer two-way connectivity with the equipment allowing remote control of the assets, for example SAP s Manufacturing Integration and Intelligence application. Verdantix Ltd 2007-202. Reproduction Prohibited. 4
VERDANTIX GREEN GREEN QUADRANT VERDANTIX ENVIRONMENTAL MANAGEMENT MANAGEMENT SOFTWARE SOFTWARE (GLOBAL) Figure 0. Buyers Awareness Of Environmental Management Software Suppliers What is your awareness of the environmental management software services provided by the following firms? SAP 73% Enablon 6 3% IHS 53% Enviance 4 2 BSI Group 53% FirstCarbon Solutions 3% 2 PE International 3% 60% Intelex 3% 3% 6 Gensuite 2 4 Locus Technologies 3% 53% CRedit360 4 MetricStream 3% 6 Note: data labels are rounded to zero decimal places. High Moderate Low None Source: Verdantix N=5 Buyers Prefer Suppliers With In-House Expertise For Software Provision And Implementation Even within a mature market, customers face a spectrum of choices when selecting environmental management software suppliers. Buyers look for suppliers that can demonstrate a successful industry track record, strong financial records, an international presence and proven integration with enterprise systems and equipment. When Verdantix asked the customers which type of suppliers they preferred to buy software and implementation services from, we heard that: Firms prefer to buy from suppliers with environment and sustainability knowledge. Eleven firms said that they preferred to buy environmental management software from large environmental and sustainability software firms, versus specialist or large pure software firms and audit firms (see Figure 8). To match their external services around Verdantix Ltd 2007-202. Reproduction Prohibited. 5
VERDANTIX GREEN GREEN QUADRANT ENVIRONMENTAL MANAGEMENT MANAGEMENT SOFTWARE SOFTWARE (GLOBAL) environment and sustainability, some providers will invest in developing a strong internal sustainability programme as a proof point of their dedication to being domain experts (see Verdantix SAP Seeks To Marry Financial And Sustainability Reporting). Buyers favour software firms and technical consultants as implementation partners. Verdantix heard that of the customer panel favour software suppliers or an external engineering or environmental consulting firm to deliver the implementation of environmental management software (see Figure 9). This is because they require indepth environmental knowledge to configure the solution in accordance to specific industrial operations, and to train customers subject matter specialists in the new functionality. Software providers often partner with environmental services providers such as AECOM, CH2M HILL or URS to accelerate the delivery of their solutions (see Verdantix Green Quadrant Environmental Services Providers (US)). Four suppliers dominate customers awareness for global solutions. In a concentrated market, it is not unusual to see a handful of suppliers standing out from the global group of enterprise-class software available. Our customer panel specifically noted high awareness of the environmental management solutions offered by Enablon, Enviance, IHS and SAP (see Figure 0). Less well known suppliers are generally recent entrants in the market, being either relatively recently founded such as Gensuite, or having moved to the environmental management software market from other adjacent markets, for instance MetricStream. GREEN QUADRANT ENVIRONMENTAL MANAGEMENT SOFTWARE Based on the insights from the customer panel and our in-depth interviews we define environmental management software as: Enterprise-scale software that enables firms to capture, analyse and report data, and manage performance across their assets on environmental indicators such as air, greenhouse gases, water, waste and toxic chemicals. This definition does not include software designed to be deployed on a site-by-site basis or with a focus on a single environmental indicator, solely on health and safety or on sustainability reporting. Green Quadrant Methodology The Verdantix Green Quadrant methodology provides buyers of specific products or services with a structured assessment of comparable offerings at a certain point in time. The methodology supports purchase decisions by identifying potential suppliers, structuring relevant purchase criteria through discussions with buyers and providing an evidence-based assessment of the products or services in the market. To ensure the objectivity of the results of the study, the research process is based on the following principles and activities: Transparent inclusion. We aim to analyse all providers that qualify for inclusion in the research. For those providers that decline our invitation or fail to respond, we aim to Verdantix Ltd 2007-202. Reproduction Prohibited. 6
VERDANTIX GREEN GREEN QUADRANT ENVIRONMENTAL MANAGEMENT MANAGEMENT SOFTWARE SOFTWARE (GLOBAL) include them in the report based on public information where this would provide an accurate analysis of their market positioning. Analysis from the buyer s perspective. We recruit a panel of individuals who have bought or plan to buy the services analysed in the Green Quadrant. Their role is to define relevant buying criteria and to weight the evaluation criteria in the model that drives the Green Quadrant graphic. Reliance on professional integrity. Since it is not feasible to check all of the data and claims made by providers, we emphasize the need for professional integrity. Assertions made by providers are put in the public domain in the Verdantix report and can be checked by competitors and existing customers. Scores based on evidence. To assess the expertise, resources, business results and strategy of providers we gather evidence from public sources and conduct interviews with multiple spokespeople and with industry experts. When providers claim to be best in class we challenge them to present the evidence. Comparison based on relative capabilities. We construct measurement scales based on worse in class and best in class performance at a certain point in time. A provider s position in the market can change over time depending on how its offering and success evolves compared to competitors. Green Quadrants are typically repeated once a year. Evaluated Firms: Selection Criteria To ensure the Green Quadrant analysis only compares firms providing similar services, we define inclusion criteria. The 2 software suppliers included in this study were chosen because their applications have: Enterprise-scale product architecture. This study only considers applications designed to scale up to multi-country, multi-site deployments for an enterprise. All suppliers provided evidence of a customer implementation with users in at least three countries. Core environmental management functionality. To help firms comply with regulatory requirements, environmental management software must provide specific functionality. Core environmental management functionality include the ability to ) automate data imports from multiple sources, including sensors/monitors, spreadsheets, testing labs, and other environmental management systems; 2) apply data rules, both from external regulatory databases and from internal definitions; 3) produce automated, properly formatted reports for regulatory agencies. Performance tracking and analysis capabilities. This study targets enterprise-class apps with a broad set of functionality. We only included software which provided customizable, performance dashboards and material tracking functions, and project management functions and scenario planning capabilities. Verdantix Ltd 2007-202. Reproduction Prohibited. 7
VERDANTIX GREEN GREEN QUADRANT ENVIRONMENTAL MANAGEMENT MANAGEMENT SOFTWARE SOFTWARE (GLOBAL) In addition to the product attributes, Verdantix included only those suppliers with: Offices in at least three different countries. This criterion reflects the need to support international deployments. Resources to compete effectively in the market in the next two years. This criterion maps to customer demands for implementation and financial stability. This report compares 2 environmental management software suppliers: BSI, CRedit360, Enablon, Enviance, FirstCarbon Solutions, Gensuite, IHS, Intelex, Locus Technologies, MetricStream, PE International and SAP. All software suppliers included in this study actively participated through interviews, product demonstrations and responses to a 5-point detailed questionnaire. Verdantix considered but chose not to include CarbonSystems, CA Technologies, Environmental Systems Corporation, Hara, KMI and ProcessMap in the research as they did not meet our inclusion criteria. Evaluation Criteria For Environmental Management Software Verdantix defined the evaluation criteria using a combination of interviews with practice leaders, desk research, discussions with 5 customers and existing expertise, specifically the Verdantix Green Quadrant Energy Management Software published in 20 and previous reports (see Verdantix Green Quadrant Carbon and Energy Management Software 200). The Green Quadrant analysis compares offerings from 2 software suppliers using 5 weighted criteria grouped under the following categories: Capabilities. This dimension, captured in the vertical axis of the Green Quadrant graphic, measures each software supplier on the breadth and depth of its software functionality. To assess performance in this dimension Verdantix collected data on 92 criteria grouped into 9 areas: direct data capture, external data feeds capture, business process software integration, energy and other environmental software integration, database management system, master data management, workflow and task management, security and data audit, internationalization, inventory management, auditing, environmental monitoring, compliance reporting and analysis, asset management, air reporting and analysis, water reporting and analysis, solid waste reporting and analysis, toxic chemical reporting and analysis, and functionality for other substances. Market momentum. This dimension, captured in the horizontal axis of the Green Quadrant graphic, measures each software supplier on a range of strategic success factors including publicly announced customers and internal sustainability performance. The 23 criteria included in this axis are grouped into seven areas: market vision and sustainability, product strategy and architecture, customer momentum, implementation and value, organizational resources, financial resources, and partnerships. The evidence provided by each supplier is captured in a quantitative model. Each top-level criterion, such as direct data capture functionality, is based on a zero to three score on the Verdantix Ltd 2007-202. Reproduction Prohibited. 8
VERDANTIX GREEN GREEN QUADRANT ENVIRONMENTAL MANAGEMENT MANAGEMENT SOFTWARE SOFTWARE (GLOBAL) Figure. List Of The Suppliers And Software Assessed Supplier Software (version) Customer examples BSI Group CRedit360 BSI Entropy Software (4.) CRedit360 Environment Health & Safety Crossing Automation, Daikin McQuay, Levi Strauss & Co Boots, Cairn Energy, E.ON, Heineken, Mattel Enablon Enablon Sustainability Suite (6.0) Accenture, Bombardier, L Oréal, UPS, Xstrata Enviance Environmental Compliance & Data Management American Electric Power, Boral Industries, Continental Resources FirstCarbon Solutions ghgtrack (.7.2.3) First Title Gensuite LLC IHS Intelex Locus Technologies MetricStream Gensuite Environmental, Health and Safety & Sustainability (7.4) Environmental Management System & Compliance Suite Locus eportal Platform GRC platform GE, SABIC Innovative Plastics, NBCUniversal, Eli Lilly Alcoa, American Airline, PetroChina Campbell, Meg Energy, Port of Houston, Smurfit Kappa Paper Alstom, Chevron, Del Monte Foods, ExxonMobil, Honeywell BAE Systems, P&G, Sonic Automotive PE International SoFi (5.0) Daimler, Dole Foods, Husqvarna, Iberdrola, Tata Steel SAP EH&S Management - Environmental Compliance (3.0) Air Products, Nova Chemicals, Holly Frontier, PacifiCorp, Tesoro Source: Verdantix weighted sub-criteria. Details on the criteria are provided in Figure -, Figure -2 and Figure 2. These figures also provide (in brackets) the weighting attributed to each top-level criterion in the model. Enablon, IHS And SAP Stand Out With Extensive Off-The-Shelf Functionality The Green Quadrant analysis of enterprise environmental management software segments the market into four quadrants (see Figure 3). Within the Leaders Quadrant, three suppliers stand out: Enablon, IHS and SAP. The factors that distinguish these suppliers from the other nine suppliers analysed are: Wide coverage of environmental issues and regulations. The breadth of environmental indicators and regulatory coverage included in Enablon, IHS and SAP s solutions is a differentiator. The three firms deliver this broad coverage through different models. For Verdantix Ltd 2007-202. Reproduction Prohibited. 9
VERDANTIX GREEN GREEN QUADRANT VERDANTIX ENVIRONMENTAL MANAGEMENT MANAGEMENT SOFTWARE SOFTWARE (GLOBAL) Figure 2-. Capabilities Criteria For Environmental Management Software Suppliers CAPABILITIES Data Capture From External Feeds (0%) Does the software capture data from government agencies, regulatory content aggregators? Does the software capture data from external laboratories, external waste treatment storage and disposal facilities? What functionality exists for tracking shipping data from transportation suppliers? Direct Data Capture (0%) Does the software directly capture air quality, water, fugitive emissions, radiation data from sensors? Does the software directly capture data from laboratories, or data related to the transportation and storage of hazardous and/or toxic substances? What functionality exists to process data from spreadsheets and data that has been added manually? Integration With Business Process Applications (5%) What functionality exists to integrate with Enterprise Resource Planning (ERP), Product Lifecycle Management (PLM) and Supply Chain Management (SCM) software systems? Integration With Other Environmental Applications (5%) What functionality is provided to integrate with energy management, health and safety information management, sustainability management, life cycle analysis and carbon management software systems? Database Management System (6%) What sort of database does the software use? Does the database acquire data directly from monitoring sensors? What are the data transaction and processing capabilities of the database? What are the requirements necessary to store and process data? Security & Data Audit (4%) What security does the software have to prevent unauthorized access when offered as a hosted or SaaS application? Does the software offer controls to track data entry such as time-stamping? What data estimation, accuracy and exception tools exist to help with missing data and data accuracy? Workflow & Task Management (4%) What functionality does the software have for providing role-based access to data and functionality along with the ability to allocate tasks to certain users? What pre-built workflows does the software contain to accelerate business process change? What pre-built workflows exist to streamline and secure reporting processes? Internationalization (3%) What languages and currencies does the software support out-of-the-box? What international environmental management metrics does the software include? Master Data Management (3%) How does the software establish organizational structures/hierarchies? How easy is it for users to change and configure hierarchies? What functionality exists to capture the geographic location of monitoring devices? Figures in brackets represent the weighting given to each criterion in the flexible multi-criteria model that generates the Green Quadrant graphical analysis. Source: Verdantix Verdantix Ltd 2007-202. Reproduction Prohibited. 20
VERDANTIX GREEN GREEN QUADRANT VERDANTIX ENVIRONMENTAL MANAGEMENT MANAGEMENT SOFTWARE SOFTWARE (GLOBAL) Figure 2-2. Capabilities Criteria For Environmental Management Software Suppliers CAPABILITIES Auditing (9%) What functionality exists to assist with the audit of data, equations and ratios specific to software, monitoring equipment, sites/facilities? What functionality exists to track the occurrence and progress of audits? Compliance Reporting & Analysis (7.5%) Environmental Monitoring (7.5%) Asset Management (3%) Does the software contain a business rules reporting engine that identifies events/trends and reports them to the appropriate user? What functionality does the software have for generating regulatory compliance reports? Does the software have configurable reporting capabilities? What dashboard functionality exists to view, chart and analyse compliance and pollution data? What functionality is there to set targets across business unit levels and track progress against these targets? Does the software automatically notify the appropriate user when they approach or exceed compliance thresholds? Can users define their own set of KPIs? What functionality exists to benchmark performance? What functionality exists to schedule and predict maintenance events? What functionality exists to directly control assets? Inventory Management (3%) Air Reporting & Analysis (6%) Solid Waste Reporting & Analysis (4%) Toxic Chemical Reporting & Analysis (4%) Water Reporting & Analysis (4%) Functionality For Other Substances (2%) What functionality exists to manage contracts with service suppliers? What functionality exists to automate shipping manifests and track the movement and storage of substances? Does the software automatically generate substance labels for regulated substances? What functionality exists to reconcile inventories of regulated substances? What airborne pollutants does the software track? What regulations does the software cover and what automated reports can the software generate to satisfy compliance requirements? What functionality exists for data analysis, tracking and benchmarking air quality? Does the software provide automatic notifications? What waste streams does the software track (hazardous/non-hazardous/ recycled)? What regulations does the software cover and can it automatically generate compliance reports? Does the software generate container labels, shipping manifests and track the movement and storage of waste? Does the software analyse the composition and source of hazardous waste? What toxic chemicals does the software track? What regulations does the software cover and what automated reports can the software generate to satisfy compliance requirements? What functionality exists for data analysis, tracking and benchmarking toxic chemicals? Does the software provide automatic notifications? What waterborne pollutants does the software track? What regulations does the software cover and what automated reports can the software generate to satisfy compliance requirements? What functionality exists for data analysis, tracking and benchmarking waterborne pollutants? Does the software provide automatic notifications? Does the software provide compliance functionality for any other environmental regulations including other GHGs and refrigerants? Figures in brackets represent the weighting given to each criterion in the flexible multi-criteria model that generates the Green Quadrant graphical analysis. Source: Verdantix Verdantix Ltd 2007-202. Reproduction Prohibited. 2
VERDANTIX GREEN GREEN QUADRANT VERDANTIX ENVIRONMENTAL MANAGEMENT MANAGEMENT SOFTWARE SOFTWARE (GLOBAL) Figure 3. Momentum Criteria For Environmental Management Software Suppliers MOMENTUM Customer Momentum (25%) Product Strategy & Architecture (25%) How familiar is the customer panel with the supplier and its software? How many named customers does the supplier have with revenues above and below $ billion? What is the largest deployment the supplier has undertaken? What functionality is the supplier planning for 203? How frequently does the supplier release new software? What is the flexibility of the supplier s license model? What is the supplier s average deal size? What application architecture options does the supplier have? Implementation & Value (5%) What implementation support does the supplier provide? What process change support does the supplier provide? What domain expertise does the supplier have? What value does the supplier deliver to its customers? Market Vision & Sustainability (5%) What market vision does the supplier have? What is the supplier s corporate sustainability strategy? Does the supplier report its own sustainability data? Partnerships (0%) Financial Resources (5%) What consulting partners does the supplier have? What systems integrators does the supplier partner with? What technology providers does the supplier partner with? What is the revenue of the supplier? How is the supplier funded? Organizational Resources (5%) Where are the supplier s offices located? Where does the supplier have hosting facilities? Where does the supplier have technical support locations? How many employees does the supplier have? Figures in brackets represent the weighting given to each criterion in the flexible multi-criteria model that generates the Green Quadrant graphical analysis. Source: Verdantix example, Enablon operates with a large network of partners such as ChemADVISOR, whose List Of LIsts (LOLI) database contains information from over 4,200 chemical regulatory sources across 0 countries. In comparison IHS, whose business model integrates content, services and software, delivers coverage primarily from in-house domain experts. While SAP s content delivery and coverage relies mostly on external partners, its acquisition of TechniData in April 200 demonstrates a growing provision of content internally. Advanced analysis and reporting tools. To help firms better track and understand their environmental performance, the three leading suppliers have added complex analytics tools such as cross-indicator analysis, scenario planning, and geographic benchmarks, delivered through user-friendly graphical interfaces for non expert decision-makers to use. Enablon scored the highest on analysis and tracking functionality thanks to its Verdantix Ltd 2007-202. Reproduction Prohibited. 22
CAPABILITIES VERDANTIX GREEN GREEN QUADRANT VERDANTIX ENVIRONMENTAL MANAGEMENT MANAGEMENT SOFTWARE SOFTWARE (GLOBAL) Figure 4. Green Quadrant Environmental Management Software Suppliers CHALLENGERS LEADERS SAP IHS Enablon Locus Technologies Enviance MetricStream BSI Group CRedit360 Intelex PE International Gensuite FirstCarbon Solutions ENTREPRENEURS SPECIALISTS MOMENTUM Capabilities Momentum This dimension assesses capabilities for: direct data capture, external data feeds capture, business process software integration, energy and other environmental software integration, database management system, master data management, workflow and task management, security and data audit, internationalization, inventory management, auditing, environmental monitoring, compliance reporting and analysis, asset management, air reporting and analysis, water reporting and analysis, solid waste reporting and analysis, toxic chemical reporting and analysis, functionality for other substances. This dimension assesses strategic success metrics including: market vision and sustainability, product strategy and architecture, customer momentum, implementation and value, organizational resources, financial resources, and partnerships. The Green Quadrant graphic is generated from a multi-criteria model in a spreadsheet. The flexible design of this model enables Verdantix clients to add providers and re-weight or re-score criteria for additional insights. Source: Verdantix Verdantix Ltd 2007-202. Reproduction Prohibited. 23
VERDANTIX GREEN GREEN QUADRANT ENVIRONMENTAL MANAGEMENT MANAGEMENT SOFTWARE SOFTWARE (GLOBAL) Metrics Performance module, which helps firms set relevant performance targets and indicators from plant to enterprise level. Pre-built workflows and task management capabilities. The three suppliers all feature strong data management capabilities pre-built around core environmental activities including inventory management, equipment and site auditing, environmental monitoring, and asset management. IHS achieved the highest score (2.8) on this metric because its Environmental, Health and Safety & Sustainability (EHS&S) solution supports over 400 documented workflows sourced from internal content and analysis on industry best practices for EH&S management. Implementing a solution that already has domain specific, predefined but configurable workflows and task management functionality helps reduce the time and costs sunk in customization at the installation phase. For example, Asian Paints estimates saving 80 employee-hours per month on average following the replacement of its paper and spreadsheet-based incident reporting systems with IHS s EHS&S solution. Pre-built connectors to integrate with other systems. The three suppliers standing out in the Leaders Quadrant post high scores for integrating with other software, systems and equipment to directly capture data. This means using pre-built connectors and APIs to streamline data from sensors, laboratories, external content feeds, data historians and other enterprise and environmental software. The three suppliers also have applications that already encompass multiple areas such as energy, health and safety, supply chain and sustainability, which reduce the need for integration. SAP scored the highest due to its ability to combine its Environment Health and Safety Management (EHSM) with its Manufacturing Integration and Intelligence (MII) applications to directly communicate with asset control systems. Established significant enterprise-scale customer bases. All three providers possess established customer bases of multinational firms with revenues over $ billion across medium and heavy-footprint sectors, with proven deployments covering more than,000 sites. Specifically, more than 300 firms use Enablon s Quality, Environment, Health & Safety (QEH&S) suite including Bombardier, UPS and Xstrata. IHS boasts over 550 enterprise customers for its EHS&S solution for example Alcoa, American Airlines and PetroChina. SAP counts more than,500 firms using its Environmental Compliance (EC) or its EHSM applications such as Air Products, Nova Chemicals, Holly Frontier, PacifiCorp and Tesoro. The large number of deployments across multiple industries reflect a key buying criterion for cautious customers. Four Suppliers Offer Targeted Domain Expertise Another four suppliers scored above the midway mark of.5 on the capabilities axis BSI, Enviance, Locus Technologies and MetricStream reflecting strong environmental management software capabilities, but with different levels of customer momentum. Key characteristics of these providers include: Core sets of predefined environmental functionality. BSI, Enviance, Locus Technologies and MetricStream all provide solutions with core sets of predefined Verdantix Ltd 2007-202. Reproduction Prohibited. 24
VERDANTIX GREEN GREEN QUADRANT ENVIRONMENTAL MANAGEMENT MANAGEMENT SOFTWARE SOFTWARE (GLOBAL) environmental functionality. Suppliers, external consultants or customers internal IT teams customize the rest of the functionality during the installation of the software, especially in terms of direct data capture and integration with other systems. For example, BSI Entropy Software s and Enviance s Environmental Compliance & Data Management scored above average on regulatory coverage and analysis across environmental indicators with Enviance s solution supporting a library of report templates covering requirements from over 75 international jurisdictions. Locus Technologies achieved high scores for providing domain-specific and predefined environmental monitoring functionality (2.3), while MetricStream comes on top of the group for its auditing capabilities (2.2). Strong credentials in key areas of customer need. Both BSI Entropy software and MetricStream s platform build on the suppliers competencies in Governance, Risk and Compliance (GRC) to expand the remit of their applications to EH&S activities. Enviance leveraged strong expertise in GHG emissions management and carbon accounting to deliver its cloud-based Environmental Enterprise Resources Planning platform, while Locus Technologies has invested resources to develop specialist capabilities in waste and subsurface water quality data management within its Environmental Information Management software. Momentum from decade-long track records and partnerships. These four suppliers have been present in the environmental management market for more than 0 years, boasting solid customer bases and well-built ecosystems of partnerships. Because of the need to remain independent to maintain its certification body role, BSI cultivates partnerships with consultants such as SAIC and Verizon Business through its Associate Consultant Programme, whereas Enviance teams up with environmental services providers including AECOM, ARCADIS, CH2M HILL and Shaw Group to support the deployment of its solution (see Verdantix Enviance & CH2M HILL Partner For GHG Solutions). Software-as-a-Service offerings to speed up deployment. BSI Entropy Software offering and MetricStream s GRC platform can be delivered on premise, through shared hosting or on cloud-based hardware. Enviance and Locus Technologies solely offer their solutions as Software-as-a-Service. Some firms might prefer on-premise deployment to have physical ownership of their data, but web-based applications allow suppliers to lower the price of licenses and offer flexible pricing models such monthly payments. It also allows for quicker product updates to follow regulations and faster deployment. Five Suppliers Offer Highly Customizable Environmental Applications The lower half of the Quadrant is populated by five firms CRedit360, FirstCarbon Solutions (FCS), Gensuite, Intelex, and PE International. All these suppliers offer highly customizable solutions that adapt to their customers EH&S processes and meet their specific needs, most often leveraging broad environmental domain expertise to accompany firms during the deployment process. Each supplier brings specific attributes and organizational resources. Specifically: Verdantix Ltd 2007-202. Reproduction Prohibited. 25
BSI Group CRedit360 Enablon Enviance FirstCarbon Solutions Gensuite IHS Intelex Locus Technologies MetricStream PE International SAP VERDANTIX GREEN GREEN QUADRANT VERDANTIX ENVIRONMENTAL MANAGEMENT MANAGEMENT SOFTWARE SOFTWARE (GLOBAL) Figure 5-. Capability Scores For 2 Environmental Management Software Suppliers Data Capture From External Feeds Direct Data Capture Integration With Business Process Applications Integration With Other Environmental Applications Database Management System Security & Data Audit Workflow & Task Management Internationalization Master Data Management Auditing Compliance Reporting & Analysis Environmental Monitoring Measurement scale is 0 to 3 This figure represents the quantified assessment of supplier commercial capabilities based on the Green Quadrant benchmark data. A full bar indicates best in class capabilities (3/3), an empty bar indicates no capabilities (0/3). Source: Verdantix Verdantix Ltd 2007-202. Reproduction Prohibited. 26
BSI Group CRedit360 Enablon Enviance FirstCarbon Solutions Gensuite IHS Intelex Locus Technologies MetricStream PE International SAP VERDANTIX GREEN GREEN QUADRANT VERDANTIX ENVIRONMENTAL MANAGEMENT MANAGEMENT SOFTWARE SOFTWARE (GLOBAL) Figure 5-2. Capability Scores For 2 Environmental Management Software Suppliers Asset Management Inventory Management Air Reporting & Analysis Solid Waste Reporting & Analysis Toxic Chemical Reporting & Analysis Water Reporting & Analysis Functionality For Other Substances Measurement scale is 0 to 3 This figure represents the quantified assessment of supplier commercial capabilities based on the Green Quadrant benchmark data. A full bar indicates best in class capabilities (3/3), an empty bar indicates no capabilities (0/3). Source: Verdantix CRedit360 s agnostic platform enables flexibility and client independence. With annual revenues over $4.5 million, self-funded CRedit360 presents a highly customizable platform with no predefined indicators or business unit levels, which can be set up at installation according to two hierarchical dimensions: indicators and regions. Integration with other software and systems through APIs is also configured at installation. CRedit360 s sustainability data management solution is a scalable and modular web-based platform that includes applications for Compliance, Ethics, Environmental, Social, Community Involvement, Supply Chain and Health and Safety. The user-friendly interfaces allow customers not to be tied to the supplier when configuring the software, but firms can chose to work with CRedit360 or one of its implementation partners, such as Acona, Intertek, The Carbon Trust and Trucost, if they require support. Verdantix Ltd 2007-202. Reproduction Prohibited. 27
BSI Group CRedit360 Enablon Enviance FirstCarbon Solutions Gensuite IHS Intelex Locus Technologies MetricStream PE International SAP VERDANTIX GREEN GREEN QUADRANT VERDANTIX ENVIRONMENTAL MANAGEMENT MANAGEMENT SOFTWARE SOFTWARE (GLOBAL) Figure 6. Momentum Scores For 2 Environmental Management Software Suppliers Customer Momentum Product Strategy & Architecture Implementation & Value Market Vision & Sustainability Partnerships Financial Resources Organizational Resources Measurement scale is 0 to 3 This figure represents the quantified assessment of supplier market momentum based on the Green Quadrant benchmark data. A full bar indicates best in class momentum score (3/3), an empty bar indicates no momentum (0/3). Source: Verdantix FirstCarbon Solutions benefits from a core team of environmental consultants. FCS one of the five firms of the ADEC Group, a knowledge and business process outsourcing services firm builds on a background in back office data processing services to offer a fully customized software solutions. FCS s acquisition of Californiabased environmental services provider Michael Brandman Associates in February 202 brings its specialist services team to 50 people. The firm leverages its environmental domain expertise to mould its software, Sustainability Workbench, and its application ghgtrack, to its customers operations through consulting engagements. As a scoring partner of the Carbon Disclosure Project s (CDP) Supply Chain programme since 20, FSC processes the submissions of participating firms such as Dell, Vodafone and Wal-Mart for the CDP and has since gained valuable insights on how to embed environmental initiatives throughout corporate value chains. Verdantix Ltd 2007-202. Reproduction Prohibited. 28
VERDANTIX GREEN GREEN QUADRANT ENVIRONMENTAL MANAGEMENT MANAGEMENT SOFTWARE SOFTWARE (GLOBAL) Gensuite launched its solution built on direct industrial experience. Launched in 2008, Gensuite is a web-based suite of 60 applications covering EH&S and sustainability issues that evolved from GE s internal EH&S system. Gensuite builds on a decade of experience across 7 GE businesses to appeal to heavy processing and manufacturing industries such as chemicals and industrial engineering. The GE funded supplier has 20 employees located across seven countries. Banking on its knowledge of industrial processes to deliver a custom-made, integrated product, Gensuite has won a dozen external customers including Eli Lilly, HEICO Companies LLC, irobot, and SABIC Innovative Plastics. Intelex s strength lies in environmental auditing and reporting. The Torontoheadquartered supplier was founded in 992 and now counts 200 employees. Focusing on the mid-tier market, Intelex achieved strong scores in auditing (2.0) and in compliance reporting and analysis (2.0) functionality due to well predefined yet configurable functionality aimed at organizing and streamlining environmental data and document requirements for voluntary and mandatory reporting. The Intelex Platform, which spans applications including EH&S and quality management, also includes access to Intelex-Exchange, a client portal enabling access to training seminars, downloadable benchmark scorecards and networking opportunities with other Intelex clients, such as Bayer, Nestlé, Ocean Spray and Sears. PE International adds value with sustainability content sharing. PE International s value proposition focuses on helping firms manage their environmental and sustainability performance. Featuring user-friendly graphics for tracking and analysis, SoFi 5.0 also delivers proprietary content through a library of four categories of environmental and sustainability data corporate data, buildings, products and processes with which firms can benchmark their performance and build KPIs relevant to their industry. PE International sources data from previous customer client projects, from standardized bodies such as the US Department of Energy, the European Environment Agency and the CDP, and from its GaBi product life cycle analysis databases. SoFi 5.0 also contains a Best Practices library that counts over 0,000 due diligence recommendations sourced from PE International s databases containing data points from 4,000 firms, providing information on the success rate and implementation costs of various environmental energy, waste and water reduction measures. BUYERS SHOULD SELECT PROVIDERS IN LINE WITH THE MATURITY OF THEIR EH&S STRATEGY Verdantix research shows that Enablon, IHS and SAP offer the most comprehensive solutions in the environmental management software market today. Yet even in this concentrated market, environmental software suppliers operate with different business models to provide the mix of software, content and related services that is needed during and after the deployment of a solution; for example Enablon s software-only proposition supplemented by a partner ecosystem, IHS s integrated offering across software, content and services, or FirstCarbon Solutions consulting-based value proposition. Consequently, not all suppliers can meet all firms specific EH&S requirements. While forward-looking firms are already starting to deploy environmental management software on a global scale, a large number of Verdantix Ltd 2007-202. Reproduction Prohibited. 29
VERDANTIX GREEN GREEN QUADRANT ENVIRONMENTAL MANAGEMENT MANAGEMENT SOFTWARE SOFTWARE (GLOBAL) multinational firms have immature EH&S strategies and still manage their environmental data, systems and processes through informal systems of spreadsheets and internal tools. When looking to select an environmental management software supplier or to switch suppliers, Verdantix advises that firms assess suppliers in the light of the maturity of their EH&S strategy. More specifically, Verdantix recommends that: Emerging strategies should factor in customization and support requirements. With a number of mature environmental software available on the market, firms that are now moving from internal tools and spreadsheet systems have the luxury of choice. But when taking a first step into implementing environmental management software, firms must chose suppliers with strong domain expertise. Suppliers with teams of industry or domain specialist consultants, such as FirstCarbon Solutions, Gensuite, IHS, Intelex, MetricStream and PE International, are well positioned to translate their new strategies into customized software. First-time buyers should also assess the need for integration with other systems and equipment, compared to the low cost of automated batch uploads. Firms that require a high level of integration should opt for suppliers that provide pre-built connectors or easily configurable gateways for integration include Enablon, Enviance, IHS, Locus Technologies and SAP. Global businesses must think about scalability. Firms with rapidly growing international operations have to deal with a rising number of requirements as their EH&S systems expand proportionally. Customers looking to replace their patchwork of siloed software and systems with one enterprise-scale solution are in a similar situation. These buyers should consider the scalability of the shortlisted solutions on several dimensions. Functionality-wise, firms need to anticipate the full set of environmental data they will need to cover, for example moving from tracking GHGs to wider air quality measures. SaaS platforms such as those provided by Enviance and Gensuite provide an architecture upon which firms can add new modules to with minimal process change. Second, firms must make sure that the deployment option the select will be able to accommodate future heavier loads so their programme won t be limited by hardware constraints. Lastly, firms must think about suppliers ability to provide useful content and resources across multiple geographies global suppliers such as BSI, IHS, MetricStream and SAP all have offices in over 25 countries. Forward-looking firms invest in performance management functionality. Firms with mature, integrated and global EH&S strategies should already be looking forward to the next steps in gaining efficiencies through environment management software. For some firms, this will mean investing to gain real-time visibility of energy, water and waste performance to cut costs from utility bills. For most heavy emitters, the main efficiency gain remains the avoidance of fines from non-compliance. In which case, predictive analytics such as scenario building and trend benchmarking can help detect and forecast defects, instead of checks and maintenance activities being based on periodic workflows that drives a preventive EH&S culture. Firms with mature strategies should look for suppliers with strong target setting, benchmarking and analytics tools for example CRedit360, Enablon, IHS, Locus Technologies, PE International and SAP. Verdantix Ltd 2007-202. Reproduction Prohibited. 30
The Authority On Sustainable Business Verdantix is an independent analyst firm. We provide authoritative data, analysis and advice to help our clients succeed in the world of sustainable business. Through our global primary research and deep domain expertise we provide our clients with strategic advice, revenue generating services, best practice frameworks, industry connections and competitive advantage. A Strategic Research Relationship We work with our clients, located in more than 50 countries around the world, to build long-term, strategic research relationships. We listen to our clients requirements for data, analysis and advice on sustainable business to help them succeed with their strategies, programmes and initiatives. Our Knowledge Service helps clients: Plan effectively for regulations Keep pace with competitive actions Make connections with new customers Launch new propositions Educate colleagues with evidence Quickly shortlist suppliers Save time in strategy development Reduce risk with new initiatives Speed up business case assessments Benchmark performance Deliver financial results Achieve competitive advantage Sustainability Expertise And Industry Connections Our analysts combine rich business experience with specialist sustainability expertise. They leverage privileged access to thousands of sustainability decision makers around the world and robust methodologies to deliver analysis that is independent, fact based, and commercially relevant. Find out more: visit www.verdantix.com Contact us: email research@verdantix.com Verdantix Ltd 2007-202 www.verdantix.com