Frankly CSR

This is the final post in the series on using business software to help manage CSR programs.  Represented at the top of the diagram, enterprise performance management (EPM) software is the essential piece of the overall CSR Solution Framework because it’s where CSR activities really get managed.

EPM, which includes some very cool technology,  is my favorite part of the framework. It represents the access point or portal that delivers key information to executives and CSR knowledge workers. Business intelligence, as it’s often referred to, is typically delivered via dashboards, scorecards, reports, automated workflows and alerts. The goal is to help organizations more effectively analyze situations and then take action.

So, let me tie the whole framework together using the topic of workforce diversity. While EPM can be used to measure multiple factors within the environmental, social, and economic pillars of your CSR program, workforce diversity is a good example because it’s an element of CSR that impacts all organizations and encompasses both regulatory compliance and self-established standards.

• ERP Applications - Creates a central repository of transactional data such as age, gender, ethnicity and other indicators of protected class status. The applications, such as human resources, financial, and activity management, also maintain key comparative data such as salary, department, geographic location, and position.

• Internal Control System - Maintains all regulatory (e.g., EEO, Affirmative Action) and organizational (e.g., diversity standards and policies) documentation. It assigns resources to processes and controls, monitors testing, exception analysis, and remediation activity. The system also produces a risk management assessment.

• Enterprise Performance Management – Generates dashboards that provide a snapshot of key diversity information and a single point of access to detailed reports. Custom alerts notify HR managers of key events and potential issues, while automated workflows guide hiring managers through recruiting and talent management processes highlighting relevant diversity information.

From labor practices to green initiatives to community programs, my experience is the framework holds up well.  I hope this series of posts gives you some food for thought as you look at how you might manage your own CSR programs. 

Jeff

In my last post, I outlined how ERP systems can and should form the foundation for CSR program management. Moving up a level in the CSR Solution Framework, in this post, I will focus on the use of an internal control system. 

In my experience, almost all CSR programs contain elements of governance, risk management and compliance. Let’s face it, the fear of risk and regulatory penalties provides great motivation for organizations to undertake CSR programs. While these are definitely not the most altruistic reasons on which to base a CSR program, organizational stakeholders still benefit from the activities. 

Today, there is a category of software labeled Governance, Risk, and Compliance (GRC). Lawson offers a solution in this category called Compliance Control Manager. Most GRC products can be more broadly described as an internal control system.  An internal control system allows organizations to more effectively and efficiently manage GRC requirements – whether government-mandated or established by the organization.  It can centralize the information organizations need to manage CSR activities within any functional area (e.g. finance, HR, supply chain management manufacturing) and across the enterprise. This is the main reason why, in the CSR Solution Framework, the internal control system sits on top of the ERP applications. Internal control systems typically focus on four key areas: 

• Documentation. A central repository of all governance, risk management and compliance-related documents that is accessible to auditors and managers, and allows documents to be updated. 
•  Testing. Tracking testing activities, including what was tested, when, by whom, the results and any remedial actions when testing failed. 
• User interface. Communicating all key information to the appropriate audiences through a user portal. 
• Monitoring. Enabling organizations to manage key events/transactions within their ERP and other business applications and present any significant or material events to the appropriate audience.

While these products were designed to address regulations such as Sarbanes-Oxley and Basel II, organizations are now finding them effective in managing a variety of CSR programs, including:

In my last post, I promised to share some thoughts on how IT can help organizations manage their CSR programs. Over the past year, I’ve been leading a project at Lawson focused on how business software, more specifically ERP solutions, can help organizations manage their growing array of CSR programs. Rather than try to cover this topic all at once, I plan to spread it over a few posts. 

 Lawson  has developed a CSR Solution Framework  to help companies add additional structure and thus derive value from their CSR programs.  While some may call it too ERP-centric, based on our assessment of what problems organizations are trying to solve around CSR, it is an objective, comprehensive approach. This post will focus on the foundation layer: ERP applications. A 2007 global CSR study by AMR Research found organizations are getting limited value from their ERP systems in helping them manage their CSR programs; however, the same study indicated many of those same organizations are looking to their ERP vendor(s) for solutions for their CSR initiatives.   I think it is safe to say that today most organizations probably manage CSR activities through a collection of disconnected spreadsheets, applications and databases.  Because ERP systems are often integrated and enterprise-wide, they are a logical foundation for managing CSR programs.  ERP systems manage the transactions that flow through the enterprise and strive to establish “one version of the truth.” In addition to eliminating the disparate spreadsheets, databases and other information silos, using an existing ERP system to manage CSR programs also enables organizations to generate a clear picture of which programs are generating the greatest return on their investment. In addition, Lawson  conducted a mapping exercise between the Global Reporting Initiative Sustainability Reporting Guidelines, a commonly recognized and accepted reporting standard, and the data tracked in our ERP applications.  We found a very strong correlation.  For example, GRI’s social reporting category focuses on areas such as age, gender, minority group membership, wage rates, rates of injuries, etc. In the Lawson  system, all of this data is maintained in a central repository and can be cross-referenced by factors such as department, geographic location, level in the organization, salary, etc.  Next time I’ll discuss the internal control system. 

Best, Jeff