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Medium enterprises no longer have it so good?

Analyst Gartner brought out yet another of its Magic Quadrant reports just before Christmas, this time on ERP software for "product-centric midmarket companies." The report points to the leading software companies in this space. But instead of celebrating the achievement of the winners, the report compelled me to ask a question that has bothered me for some time. Have medium enterprises lost their edge over small business when it comes to IT? I think the answer has got to be yes.

Let's face it. It's been a long time since Gartner's MQ reports have had any juice in them. These days the best writers on software sit outside the large analyst companies, of which Gartner is easily the largest. The report explores fourteen software products, and picks two as leaders (Microsoft Dynamics AX and SAP Business All-in-One), and reserves the visionary slot for Epicor 9. What was interesting was what the report does not say. Here are some issues that medium enterprises looking at this market will get little help on from the report:

Sustainability = commercial sense

I must say I like the newly relaunched Sustainable Business Blog from the Guardian. Yesterday's article by Bruno Berthon, global md for Sustainability Services at Accenture, is a case in point: fact-based, business-focused and yet firmly planted in the sustainability world.

Here are two sets of facts that Berthon points to that everybody interested in the business case for sustainability needs to be familiar with:

1) 81% of global CEOs say that sustainability is now part of the strategy and operations of their businesses. This figure comes from a study of 766 CEOs by Accenture alongside United Nations Global Compact, and represents an upward jump from the 2007 figure of 50%.

At a time when the US legislature is backing down from its responsibilities on climate change, you might expect that companies would choose to ignore sustainability because they were not required to do so my regulation. Well, the answer seems to be that companies around the world are stepping up anyway. In a perverse way, the lack of action by the US authorities is working in favour of sustainability as US companies decide that they cannot wait for the government to act as it is in their business interest to take appropriate action in this area.

2) Accenture's study of 275 global Fortune 1000 companies analysing business and sustainability performance metrics shows that the top 50 companies ranked on sustainability outperform the bottom 50 by 16% when it comes to shareholder returns over a three year period.

Over five years, the results are even more skewed in favour of the best sustainability performers: the top 50 outperform the bottom 50 and middle 50 peers by 38% and 21%, respectively.

Yes, sustainability is a business issue - nobody really questions that. But does it make commercial sense? Berthon's numbers answer with a resounding yes.

Sustainability basics: video shorts for GuruOnline and IBM

Jyoti Banerjee has just done a series of video shorts for GuruOnline and IBM, exploring the answers to some basic questions businesses need to engage with when it comes to sustainability.

KiteBlue - GuruOnline Interview - What are the main business drivers impacting sustainability?

You can check out the full series of questions (and their answers) here:

Climate change and sustainability

Business regulations regarding climate change  

Business drivers for sustainability

Sustainability and the investor

Sustainability and business performance  

Sustainability and the supply chain  

IT and sustainability  

Next steps in sustainability 

Ecosystem economics: how economics can trump politics

Julie Meyer of Ariadne Capital has laid a strong case why entrepreneurial capitalism is enabling economics to trump politics. Jyoti Banerjee listened to find out more.

At yesterday's Future of Work roundtable at IBM South Bank, keynote speaker Julie Meyer of Ariadne Capital (and co-founder of early Web start-up First Tuesday) pointed to the billion or so people in Asia and Africa that have come out of poverty, thanks to individuals turning to entrepreneurship, and benefiting from globalisation's spread. And she spoke of how aid (a non-entrepreneurial government configuration) has ruined Africa.

But its not the magic of economics that is dazzling Julie. What she really likes is a specific application of entrepreneurship to economics, which she calls ecosystem economics. Now there happens to be a sustainability consultancy in Oregon with just that name, but that's not what Julie is referring to.

By ecosystem economics, Julie is referencing the approach where a digital economy start-up comes alongside a traditional company with a large userbase and ecosystem, and provides products and services in concert with the large enterprise.

Environmental failure causes investment risk, says UNPRI

The annual cost to our blue planet from human activity amounted to 11% of global GDP in 2008 - so says a new report from UNPRI.  The 3000 largest companies in the world accounted for a third of that cost. Jyoti Banerjee asks what can be done.

The entire environmental crisis facing Planet Earth and its inhabitants can be summarised in one word: externalities. It is an economist's way of stating that companies do not normally pay the full costs of the environmental costs they inflict on our planet as a result of their business activities.  These environmental costs are largely "external" to the financial accounts of these businesses, and the lack of information means that markets and companies fail to account appropriately for the dependence of these businesses on ecosystems services, such as stable climate and access to water.

As long as these environmental costs are not being priced in to the transactions these companies participate in,  the market generates wrong decisions on resource allocation. We should all care, but some need to pay attention more than others. The latter are the group of global investors known as "Universal Owners" - large diversified institutional investors, such as pension funds, mutuals and insurance companies, whose holdings are broadly representative of global capital markets, but who also hold their investments for a long period of time. It is this group that are the targets of a new report, Universal Ownership: Why Externalities Matter to Institutional Investors, commissioned by UNPRI and UNEP FI, and written by Trucost. [Conflict of interest alert: I helped Trucost reshape its business strategy].

Here are some key take-aways from the report: