Point of View

Make sustainability native: Lessons from digital transformation during COVID-19

March 17, 2021

Successful business trends follow similar paths from being early adopters’ competitive advantage to becoming native to all surviving businesses. Since the start of the COVID-19 outbreak, there’s been a forced shift to digital—and more recently we’re seeing what digital transformation really means and what “making digital native” looks like. The same will happen to sustainability; it must be native to all businesses globally and a part of every decision—from CEO and CFO desks to the shop floor and, for that matter, government policy, too. (The lesson is similar, but it’s a bigger discussion for another time.) Service and technology providers will be instrumental in making these changes.

The HFS OneOffice vision (Exhibit 1) is our stake in the ground for what digital transformation looks like in action; we’re finally seeing business leaders realizing what that transformation path looks like, and where their enterprise is heading. This matters for sustainability because the lessons and best practices for making digital native (Exhibit 2) apply to any transformation.

To become native, businesses must weave sustainability end-to-end throughout their ecosystems; sustainability services providers—across strategy consulting, design, implementation, managed services, technical consulting, and technology—hold the keys to these transformations. The sustainability services ecosystem, for now, is fragmented, undefined, and poorly understood, but keep an eye on HFS Research in 2021 as we map, define, and analyze the space.

Sustainability and the climate crisis will dominate business and policy decisions for decades

One way or another, all businesses need to make sustainability native to the core of everything they do; their customers—or their regulators—will force them to change. Sustainability cannot be a standalone strategy. Strategy, operations, and innovation must be sustainable, or businesses will become obsolete—no matter how much time they buy themselves by lobbying, achieving short-term profitability, or simply committing funds to fix the damage their current processes caused.

Enterprises are embracing digital and “making it native”—the same must happen for sustainability

The HFS OneOffice vision of digital transformation done well (Exhibit 1) involves making digital “native” rather than a standalone strategy; this must also be true for the emerging technologies that underpin transformation. These principles apply to and can enhance sustainability:

Exhibit 1: The HFS OneOffice vision outlines digital transformation; the journey toward making digital “native” is also applicable to sustainability

Source: HFS Research, 2021

Five fundamentals encapsulate steps leaders can take in any transformation

  1. An end-to-end company, free of silos, is the groundwork for sustainability becoming native. Without the whole business aligned toward goals in a transformation, it won’t end well. Inefficiencies created by years of siloed departments and IT systems will be barriers to sustainable and digital change.
  2. Sustainability is becoming native to the next generation, but existing leadership must drive it for now. The CEO and CFO must be two of the key drivers of sustainable transformation. Of course, sustainability is beyond the efforts and championing of a few—but it needs respected champions to shepherd the less-enthusiastic through the cultural shift.
  3. Digital architecture can be sustainable and improve enterprise-wide sustainability—whether that’s improving the efficiency of processes linked to carbon emissions, or the energy powering the IT behind those same processes and data storage (see reference to Google Cloud above).
  4. Data and change management are fundamental to a sustainable transformation, alongside people, process, and technology. Data fuels the potential of emerging technologies and anticipatory insights, while effective change management forms a core part of implementing strategy and making sustainability a native part of the business.
  5. The strategy: you need one, but it can’t stand alone. Bring sustainability into every decision—from the shop floor to the global supply chain and finance. It must flow from the top down—starting with the CEO and CFO—and from the bottom up as a cultural shift among all employees.

Exhibit 2: The five fundamentals of the HFS OneOffice—our view of digital transformation success—are also applicable to sustainability

Source: HFS Research, 2021

The Bottom Line: Sustainability must become native to businesses and governments. Service providers will be the keys to this across strategy and design, implementation, and continuous improvement as we rapidly approach the point of no return.

Sustainability, like a well-executed digital transformation and emerging technology combination, is a proven lever to deliver value for enterprises and address all 17 UN Sustainable Development Goals. This is also true for service providers—whether they provide strategy consulting, implementation, managed services, technical consulting, or technology.

So, to make sustainability native, businesses must embed it end-to-end. Service providers can do this and be the critical factor in transforming business and policymaking sustainability. Despite recent waves of activity, the sustainability services ecosystem remains fragmented and poorly understood; keep watching the HFS Research space in 2021.

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