Or, On Open Group Summit London 2023
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This note is highly inspired by the content being presented and referenced in Open Group Summit - London 2023 including direct narration.
There has never been a greater need for businesses to address sustainability and environmental issues such as climate change, human rights, gender equality, etc. Investors, clients, employees, legislators, and the public are all paying close attention to the steps that businesses and their executives are taking to promote sustainability. As a result, businesses must design their goods and services with sustainability as a guiding principle throughout their life cycles. Everything boils down to having a positive impact on their workforces and ecosystems. But this does not mean that corporations' ambitions translate into any meaningful actions on sustainability! (Which I will not dwell into further in this note.)
The significance of sustainability and its action indicators can be examined across multiple dimensions, the most important of which are my interests in this topic, followed by a few lines:
- Business Strategy and Model
- Application, Technology, and Data architecture
- Product, Services, and Operations
Business Strategy and Model
Sustainability will start or cause new business transformations for some corporations, and in some cases, it will converge with already occurring transformations. It is obvious that the organizations will lose their relevance or even vanish over time if they do not go through the fundamental changes.
Volkeswagen's transformation toward sustainability was initially dErie not, but survival... Sustainability was expected by Volkswagon's customers, investors, and society.
- Magdalena Greg (Member of Volkswagon Group Sustainability Advisory Board)
Organizations clearly recognize the importance of sustainability as regulation grows in this space.
Integrating sustainability into the business strategy has become an imperative in every sector for attracting investment, customers, and talent.
- Tom Schalenbourg (Toyota Sustainability Development Director)
The reality is that long-term goals (such as net zero carbon by 2050) necessitate major rethinking of the corporation's business model and strategies; otherwise, short-term commitments and objectives will serve only as a tranquilizer, and the fall (as previously mentioned) will therefore come and the business will vanish.
Major key considerations to make:
- How well do your suppliers' ESG profiles match yours?
- Should you rethink your supply chain?
- What impact will the new business model have on the community in which you live?
- Can the processes be streamlined or better optimized?
Where do you play as a business?
If you apply a basketball analogy to corporations, you will notice that they frequently play in two different positions:
What businesses have been doing is defensive, which is given and will be commoditized, and it is usually used as a de-risking factor. For the time being, let's contrast operationalization and reporting.
Reporting ("reporting around trust") is mandatory, and compliance we disclose because we have to based on local, regional, or global regulations, but operationalizing it toward Net 0 XYZ (carbon, emission, waste, inequalities) is totally a different story.
The term "operationalizing" refers to what you, as a corporation, intend to do with the numbers you provided. Which will be reflected in where you have interest; you should, but you do not have to yet!
"We don't have to do it yet!" you may say. As a result, let's do it when necessary, and you can, but that's what's known as a defensive approach. Do not do it unless there is an external force compelling you to! But let us think proactively and pragmatically; investors, vendors, customers, clients, and employees want and invite you to have a science-based target, even if they are not in a position to mandate it for the time being.
You should not overlook the fact that knowing where your suppliers, customers, and clients are headed in terms of sustainability has business value. You are probably missing out on life by not appreciating operational intelligence's competitiveness.
So, let's look at it from the offense's perspective and see how you can be the best company or strongest supplier for the customers, assisting them in meeting their science-based targets (I am not talking about only GHG, CE, water management, etc., of course). Indeed, you can be more valuable to them, and they will incentive you in some way, such as with higher priority, a larger shelf, better accessibility, you name it. All of this is in addition to the ethical and environmental implications of sustainability and the actions we take. I guess what I am trying to say here is that you should just think about how you can help another company achieve its sustainability goals.
The transition from defense to offense involves moving from a state of compliance to one of optimization and monetization. It also involves moving from a state of risk mitigation to one of value creation.
I'd like to ponder a thought here and move on to the next topic:
As an Enterprise Architect, how can you facilitate the business transition from defense to offense?
Application, Technology, and Data architecture
It is obvious that every industry and country around the world must reduce their GHG emissions in order to meet the climate targets, and technology (specifically digital technologies) is critical to accomplishing this.
If we look at IT, it has been used for many sustainability purposes. Let's not forget, on the other hand, that it also has its own substantial environmental footprint as well such as eWaste and indirect CO2 emissions.
It's not easy to discover a forum, community, or even a social media feed these days where no one is talking, writing, or wondering about AI and its recent advancements like ChatGPT and the products built on top of such services. However, the sustainability aspect of Machine learning (ML) has received insufficient attention. AI and ML models consume a lot of energy, which results in increased emissions and carbon intensity.
Of course, GPU manufacturers such as NVIDIA are moving in the direction of producing low-carbon products, but they are still far from ideal. Needless to say, having more efficient technologies usually results in a higher expectation of operation, which is a sort of catch-22 or rebound effect.
In the ESG world, various types of analyses (descriptive, predictive, prescriptive, and diagnostic) will be handy for operations and executives. How do all of these forecasting and analysis services function? What infrastructure? What amount of carbon dioxide do they emit? What is the carbon intensity of the software (including services) being used for that purpose? And these sorts of questions are the kinds of things you should consider as an enterprise architect so that you can confidently steer your company in the right technological direction.
There are still many organizations that have not transitioned their datacenters to a green cloud architecture, or if the cloud transformation programs are running or completed, the carbon intensity variables and choices for regions and datacenters have likely received little attention.
What does this mean, technically speaking?
Evidently, there is no single solution for dealing with corporations' sustainability agenda. Generally, to effectively manage and analyze data, a combination of hardware, software, and specialized skills are required. Industry bodies, from operations to executives, often make decisions every day based on data, and sustainability as a domain is no exception.
An integrated ecosystem to make all of the moving Digital Sustainability components work together is required to achieve success in both offense and defense. Having said that, it is critical to understand that interoperability must be consistent with the overall technology strategy.
I'd like to elaborate a little more; in reality, we don't see all companies in the world using the same digital platform for specific domains. There are investors, partners, clients, regulators, and so on. They are not all built on the same technological platform. However, we should be able to take the data and make it relevant for the audience, as well as find an easy way to transfer it.
As a result, interoperability, alignment with high-level IT or general technology strategies of corporations, and compliance with industry sectors are important criteria to keep in mind when working as an architect to ensure systems can still communicate.
Consider PIDX, for instance; the interoperability concept in a specific sector can propose a business opportunity or even a new revenue stream, which can be one of the primary reasons for having an enterprise architect on board!
When it comes to the reasons for having enterprise architects, one of the most important tasks we have is to evaluate and augment decision makers with technology trade-offs. Yes, we are not decision makers; we facilitate decision making by providing options (as I mention on and on in different discussions and write-ups).
Every Business, Data and Technology options that we provide should come with a TSI (Total Social Imapct) assessment if possible. Simply put, TSI shall talk about the impacts of that choice on the Planet (E), People (S), and Practices (G).
As has been said “right technology writes the future”!
Let's zoom a bit into the data now
Observations show that data is not widely shared across the organization and is not used in strategic decision making for sustainability. Additionally, functional silos dilute ongoing efforts. According to a survey (CRI 2022), approximately 40% of respondents believe that sustainability-related data is available and shared across the entire organization. The same report states that 45% of organizations with a Net Zero goal set use sustainability data only for reporting purposes and do not embed it in decision making.
There is no doubt that in order to define meaningful sustainability targets, continuous data exchange across functions is required.
By the way, where does the data get used?
GHG data is just one type of data that easily covers Scope 1 and Scope 2 emissions and is well defined. The questions to be asked are to challenge the measurements and metrics because you won't be able to plan to optimize if you can't measure. For example, measuring diversity, like GHG, is simple, but what about inclusion? How do you intend to assess inclusion? Some concepts are vague and poorly defined. Sometimes we don't consider the value of the data.
“Think about performance vs perception!”
Many companies claim to be sustainable, but an enterprise architect must first take into account how the affiliate company has been using sustainability data in terms of sentiment data compared to the data they are disclousing, and how everything fits together. Lastly, (I am taking you back to the first section of this note and relating it to Business pilar), encourage business decision-makers to take sustainability into account when evaluating brand perception.
As said before, AI can be a source of emissions, which an ESG-minded architect will wisely use; data is a source of waste! Be smart about it: are all the data lakes and oceans of data really in use and required? In addition, see if you can achieve the same results with less data; investigate the datacenters where your data is hosted; If you are already on a green cloud or on a cloud at all, plan for hot, cold, and archived data; consider data transfer approaches; and seriously assess employing the Data Mesh.
You may expand all that has been discussed here so far to the application area too, but let's ask some good questions for getting a better picture of the application landscape and its TSI:
- Are the applications transferring a lot of data? how little it can be?
- Can you practice application rationalization?
- Are all the applications long-lasting, or is your throw away application inventory also bulky?
- Do the current applications support new business models?
- Are the applications collecting or storing a lot of data? Can it be optimized?
- Does the application written with optimal algorithms?
To sum up this section, I will use Ron Tolido words:
Do Good, Do Less and Do well
As an architect, learn to constrain yourself and be cost-disciplined. Think about a thin portfolio with super lightweight technologies and limited resources, and if you accomplish that today, you are creating a future in which your organization will do well. And "This is an architecture principle!"
Product, Services, and Operations
Although I don't go into much detail about the operational side of the story because, as was noted, it is less of an enterprise architect or at least has less influence on it, I still need to draw attention to some of it because sustainability is a bigger issue in organizations.
If we consider a series of recommendations that the C-Suite can make to accelerate an organization's commitment to sustainability, the Chief Product Officer or Chief Design Officer (whichever is appropriate in the context of the organization or has an equivalent role) must define sustainability as a core design principle, and the COO must lay the groundwork for a sustainable organization.
It means products must be redesigned to remove fossil-fuel feedstock sources such as coal, redesigning to have less impact on biodiversity, and sustainability shall be looked at as a key component of the product design process.
The goal is to incorporate sustainability into product design from the very initial stages. If we want to express it as a business value, it can include plans for recycling, reuse, and reduction in material use. This design mindset will save money because the price of raw materials is rising every day.
By putting on the operation hat, it is clear that the CE (Circular Economy), which includes recycling and remanufacturing, will be the heart of it. The COOs of businesses must direct operations in such a way that product recycling becomes a key component of their overall business strategy. The simplest examples I can give here are sourcing raw materials locally, redesigning processes to reduce energy consumption, and using digital and analytics tools to optimize logistics and related emissions.
In Closing
The value of Enterprise Architecture for Sustainability will be summarized as follows:
- By serving as the primary repository for information on the landscape and giving a more precise picture of the present and future state of the environment, it offers transparency.
- Building green portfolios and using Rationalization as an immediate way to reduce carbon emissions
- Advancing sustainability-focused transformation by easing the way for strategic decision-making.
- Giving a precise picture of ownership supported by trade-off analysis and scenario modeling.
Cheers,
Mohammad Malekmakan
Disclaimer:
All opinions and content published in my blog and my social networks are solely my own, not those of my employer(s) and the communities I am contributing in.