Oracle’s Environmental Accounting App Finds Gold in Going Green
July 26, 2011 Alex Woodie
What’s the return on investment (ROI) for going green? For individual consumers, it may be that warm, fuzzy feeling you get from driving a Toyota Prius. But in the corporate world, warm and fuzzy doesn’t cut it. Now, new software from Oracle gives managers the hard numbers on their companies’ environmental footprints, as well as how they stack up against the latest environmental regulations. Best of all it does this from within companies’ existing JD Edwards and Oracle ERP systems.
Business people are becoming increasingly concerned about the environmental impact that their companies–as well as the companies they do business with–are having on the world. In many places outside of the United States, such as U.K. and Australia, regulations are already in place to guide the reduction in emissions and energy. Some American companies, such as Oracle, are choosing to participate in the Carbon Disclosure Project and similar government and non-governmental regulatory efforts.
The problem is it’s really hard to track a large company’s environmental impact manually, or even using spreadsheets. And while some point solutions have cropped up that automate the reporting for certain regulations, the newness of the environmental reporting industry makes companies hesitant to invest in a solution that could soon be irrelevant.
Oracle’s solution to this with Environmental Accounting and Reporting, which was announced last week, is to make environmental reporting activities an integrated component of a company’s daily business processes–to bake it into the ERP system, if you will.
“It provides a standardized method for companies to extend their existing business processes so that they can capture information that can then be used to analyze and report on the environmental impact of their business,” Oracle vice president of product strategy Jon Chorley tells IT Jungle. “That includes both carbon emissions and other kinds of consumption and emission, such as water.”
Environmental Accounting and Reporting also follows a “rigorous” accounting methodology, Chorley says, including a complete ledger that’s auditable and traceable to source transactions. “Finally, it provides a very comprehensive analytic capability where we can produce standard reports according to various standard reporting parameters . . . or any additional reporting the company may wish to produce.” Finally, the use of key performance indicators (KPIs) enable mangers to drive process improvement back into the business, he says.
The solution, which is based on the intellectual property (IP) Oracle obtained with its February deal with the Australian environmental reporting company NDVR, works with the latest releases of JD Edwards EnterpriseOne and Oracle E-Business Suite, and relies on the Oracle Business Intelligence platform for analytics.
The solution adds new fields to ERP screens that allow accounting clerks to capture necessary information during the invoicing, purchasing, and inventory processes. Based on the information captured and matched with transactions, the solution can calculate emissions according to international standards, such as the Greenhouse Gas Protocol guidelines published by the World Resources Institute. The resulting reports can then be used internally to drive improvements, provided to regulatory agencies, or shared with external customers or partners as needed.
As Chorley explains, even American companies that don’t face carbon emission regulations at the moment are moving to get a handle on their emissions, in preparation for possible future regulations, or just to be a mindful inhabitant of Planet Earth.
“It’s good to be prepared, and this tool helps you be prepared. Also, many customers have business operations outside the U.S. where this is regulation,” he says. “Increasingly, regardless of what the regulations are, customers are expecting businesses to have a handle on this important aspect and to be showing progress.” It’s becoming more common for customers to require their vendors to disclose their environmental impact.
Oracle is planning to adopt the Environmental Accounting and Reporting modules in its own E-Business Suite implementation, Chorley says. Thanks to the acquisition of Sun Microsystems and its manufacturing investments, Oracle has a bigger environmental footprint than it did previously as a pure software company. The $35 billion company has made a significant set of commitments to sustainability, he says.
The new Environmental Accounting and Reporting offering is available now. Pricing ranges from about $100,000 to $200,000. For more information, see www.oracle.com/us/products/applications/green/accounting-reporting-410442.html.