Managing Sustainability With Eco-business Intelligence Instruments

Description
Managing Sustainability With Eco-business Intelligence Instruments

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Management of Sustainable Development Sibiu, Romania, Volume 6, No.1, June 2014

DOI 10.2478/msd-2014-0003
MANAGING SUSTAINABILITY WITH ECO-BUSINESS INTELLIGENCE
INSTRUMENTS
Valentin, GRECU
1
and Silviu, NATE
2

“Lucian Blaga” University of Sibiu, Romania, [email protected]
“Lucian Blaga” University of Sibiu, Romania, [email protected]
ABSTRACT: In response to increasing concerns of society about environmental degradation and increasing demands for a
transition to a more sustainable society, the business companies are increasingly active in aligning their processes and services with
a sustainability agenda. Production, distribution and supply of goods and services require material and energy consumption, having
an impact on natural resources both quantitatively and qualitatively, generating waste, pollution and disrupting ecosystems. Eco-
business intelligence is the capacity of people, processes and applications / tools to organize business information, to facilitate
consistent access to them and analyse them in order to improve management decisions, for better performance management of the
organizations that are increasingly pressed to synchronize their processes and services with a sustainable development agenda,
through the development, testing and implementation of decision support software. This paper advances the idea that BI methods
and tools have an important but as yet not well studied role to play in helping organizations implement and monitor sustainable and
socially responsible business practices.
KEY WORDS: sustainable management, business intelligence, eco-BI systems.
1. INTRODUCTION
Planet Earth has a limited capacity to meet the growing
demand for natural resources made by socio-economic systems
and to absorb the destructive effects of their use. The impacts
of overconsumption of resources have begun to have
measurable negative effects both on socio-economic
development and people’s quality of life in vast areas of the
planet [1].
A good management of environmental services has now
become the focus of many business strategies tending to the
aspiration of ‘greening’ their infrastructures and product
deliveries. The growing demand for "green" products has
created major new markets in which visionary entrepreneurs
reap the rewards of approaching sustainability [2]. Hence, by
adopting sustainable practices, companies can gain competitive
advantage, increase market share and boost shareholder value.
During 1960-1970, marketing and strategic management broke
into management thinking, both being based on the theory of
"turmoil in the business" by Igor Ansoff. Thus, companies have
started to collect information about competitors, initially
focusing on tactical and operational sales and marketing. As a
result, information about competitors, although limited, have
become part of business plans.
The competitive intelligence process continually seeks to
detect any signs of change, analysis, trends and responses,
opportunities and new threats to hold at any given time updated
information. If we were to consider competitive intelligence as
a tool that will increase competitiveness, we see that it brings
significant improvements to the products and services offered
by the company.
Business Intelligence (BI) has an important role to play in
helping organizations implement and monitor sustainable
practices. The focus should be on one phase of any BI project,
the information planning phase, i.e., the systematic way of
defining relevant information in order to integrate it in
reporting activities.
2. UNDERSTANDING INTELLIGENCE
2.1. Competitive Intelligence
From the point of view of Craig S. Fleisher and David L.
Blenkhorn [3, p.7], competitive intelligence can be understood
from two perspectives. The first perspective is that of looking
like a progression from raw inputs to final outputs. In this case,
it starts from the raw data chunks, which are then organized by
experts and processed into information. This information
becomes intelligence products when placed in decision making.
Thus, competitive intelligence is the intelligence refined
product that meets the needs of a decision maker to understand
a competitive aspect of the internal and / or external
environment.
The second perspective of understanding the competitive
intelligence is seen as an organizational function. Effective
intelligence activities range from the wider business
intelligence area to the narrowest analysis of competitors. They
can provide the foundation upon which are built market
strategies and tactics. As a function mainly staff oriented,
competitive intelligence will overlap and reduce other
functions, particularly those associated with marketing and
planning.
So competitive intelligence plays an extremely important role
in the strategic management of a company. This is mainly due
to the fact that it has the function of early warning regarding
threats to the interests and objectives of business organizations.
But it must be emphasized that the information collected can
not be of real use only when administered in an intelligent way.

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In order to address competitive intelligence and all that it
entails in a private organization, it is necessary to understand
the meaning of terms such as business intelligence,
counterintelligence, information flow, and benchmarking.
These processes are closely interconnected, and their
implementation in an appropriate manner can lead to a better
positioning.
2.2. Business Intelligence
One of the best definitions of business intelligence was
provided by the American consulting and IT research company
Gartner. According to its experts, such a concept can be
defined as "the ability of people, processes and applications /
tools to organize information, to facilitate access to them and
analyze them to improve decisions, for better performance
management" [4].
Large companies, under increasing pressure of chaotic changes
that occur in the market and increasing competition, are
increasingly required to develop a system of external data
collection and processing them into intelligence, leading to a
better functioning of the decision-making process, and
therefore success in business.
Therefore, business intelligence cannot be considered a system
or a product, but a concept that spans strategy, databases, and
applications. Collection, recovery and analysis helps to
understand trends, to highlight the strengths and weaknesses of
both the own company and competitors.
Business intelligence is not addressed only big companies but
also small and medium enterprises, i.e. everyone who need
information to better development.
2.3. Competitive Counter - Intelligence
Another component of business intelligence community is the
protection of the company, known in technical terms as the
competitive counter - intelligence.
Counterintelligence "aims to neutralize the collection efforts of
a competitor through a series of imaginative, flexible and
active measures" [5, p.5].
Counterintelligence "deals with intrusions that are not illegal.
There can be used barriers to prevent an exodus of information,
but they must be placed in company procedures and in the
minds of employees, not on points of entry sites" [6, p.184].
The counterintelligence action is a multi-layered protection that
hides own weaknesses from those who, knowing them, can get
benefits. Counterintelligence is also used to limit exposure to
those strengths that will let them know. "It's an ongoing
process by which an organization sees itself from its
competitors’ perspective, in order to lock the exposure to
economic terrorism, cyber and industrial, fraud, negligence,
unlawful acquisition of information and other security risks"
[7, p.79].
3. BACKGROUND: ECONOMIC GROWTH
VERSUS SUSTAINABILITY
Sustainability and sustainable development belong to the
category of contested concepts which hold different meanings
for different actors and bring forth a variety of different ways
of framing the problem at stake. An important and strongly
debated aspect in sustainability is the relationship between
economic development and the environment. As reported by
Cole [8], on the one hand global institutions and national
governments typically argue that only economic growth can
provide the resources with which to tackle environmental
problems. Along with this idea, there is the belief in
technological innovation that would lead to the discovery of
new resources and thus an improvement of other dimensions
such as life expectancy, housing, nutrition, and education
levels in both the developed and the developing world [8, 9].
However, industrial expansion has also been identified at the
root cause of environmental and social degradation and should
therefore be restrained [1].
In the paper “Economic growth—the essence of sustainable
development” [9], Anderson and Huggins argue that “this
gloom-and-doom theory has been resurrected under the guise
of sustainable development, calling for changes in virtually
every aspect of our consumption and production.” The
amorphous nature of the concept ‘sustainability’ [10] means
that it is impossible to state the precise relationship between
sustainable development and economic growth.
Regardless the viewpoint that one may agree with, evidence of
Planet’s degradation is mounting. Concerns for resources
depletion go hand in hand with concerns about resource quality
and general systemic changes of the natural systems’ services.
Our overconsumption and fixation for more and more growth
is killing our planet [11]. The largely empirical focus of this
emerging literature can be understood by taking into account
the needs of short-term exchange of information in a fast
changing environment and hybrid scientist-practitioner
perspective of many people involved in, and evaluating
sustainability initiatives in higher education. Given the early
stage of this area of research, the emerging body of research
seems to have a minimum of cohesion and a degree of
repetition and redundancy. In addition, a strong base of
theoretical research agenda has not been established.
4. SUSTAINABLE BUSINESS PRACTICES
In a world facing increasing environmental, social and
economic challenges, business companies have been charged
with the task of aligning their processes and services with a
sustainability agenda. However, the concept of sustainability is
complex, interdisciplinary and contested. Approaches to
sustainable businesses may range from the development of new
technologies for increased efficiency to reframing
technological uses and pursuing more fundamental changes
within the ingrained culture of the organization. Furthermore,
while all business enterprises can make a contribution towards
sustainability, the ability to make a difference varies greatly by
sector and organization size.
Many business strategies aspiring to ‘greening’ their
infrastructures and product deliveries focus on the management
of environmental services. The growing demand for "green"
products has created major new markets in which visionary
entrepreneurs reap the rewards of approaching sustainability
[2]. Hence, by adopting sustainable practices, companies can
gain competitive advantage, increase market share and boost
shareholder value.
There has been an increased pressure on enterprises to broaden
the focus of sustainability and accountability in business
performance beyond that of financial performance. Demands
for sustainability management spring from a variety of sources,
including societal mandates incorporated into regulations, fear
of loss of sales, and a potential decline in reputation if a firm
does not have a tangible commitment to corporate
sustainability management [12, 13].

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Corporate sustainability is not just a buzzword—for many
industry leaders and corporations, it has become an invaluable
tool for exploring ways to reduce costs, manage risks, create
new products, and drive fundamental internal changes in
culture and structure. However, integrating sustainability
thinking and practice into organizational structure is not a
trivial task and it requires a vision, commitment and leadership.
It also requires a systems approach with an appropriate
management framework that enables design, management and
communication of corporate sustainability policies [14].
Industrial systems cause and determine flows of material and
energy in society and are therefore an important part of the
human economy. Although industry is sometimes seen as a
source of environmental degradation and social concerns, it is
widely recognized that it is an essential part of development
and wealth creation. Therefore, as an important social actor,
industry must play a prominent role in creating a sustainable
future [15].
The challenge of sustainable development for any business is
to ensure that it contributes to a better quality of life today
without compromising the quality of life of future generations.
If industry is to respond to this challenge, it needs to
demonstrate a continuous improvement of its triple bottom
line, i.e. economic, social, and environmental performance,
within new and evolving governance systems [14].
Furthermore, environmental (e.g. climate change) and social
(e.g. accountability) demands from shareholders and
stakeholders are contributing to the pressure for companies to
consider sustainability issues more seriously. However, the
major challenge to companies and industries is to demonstrate
their current contribution to the society as a whole without
compromising the potential for continuing to deliver
improvements or future generations. In short, sustainability
management practices at a firm level may help the
management board to align its corporate and business strategy
and to meet key sustainability challenges [16].
However, increasingly, a second major reason for
incorporating sustainability into business practice is starting to
emerge: it makes business sense to be more sustainable. In
their recent report, the World Business Council for Sustainable
Development (WBCSD) and the International Institute for
Sustainable Development (IISD) identify a number of business
benefits of addressing sustainable development concerns [17]:
• Cost savings due to cleaner production methods and
innovation—innovation and technology can improve
material, energy and product efficiencies;
• Lower health and safety costs - a safe and healthy
environment for workers and the community improves
wellbeing, which translates into higher productivity,
reduced compensation and damage suits, and reduced
costs for social services and medication;
• Lower labour costs and innovative solutions - providing
good working conditions can improve motivation and
productivity, lower labour absenteeism or turnover and
result in fewer union disputes;
• Easy access to lenders, insurers, preferential loans and
insurance rates - lower risks achieved through
implementation of a sustainable development strategy may
lead to lower loan rates or insurance costs;
• Best practice influence on regulation—companies that
follow best practice are much better placed than their
competitors to influence how standards are set and the
direction of regulatory change;
• Company’s reputation—a commitment to sustainable
development may enhance a company’s reputation and
secure its social licence to operate, also helping to attract
the best people to join the company;
• Market advantage—a move towards integrated supply
chain management may allow building deeper
relationships with customers and capturing more value by
providing service rather than selling products only;
• Ethical investors—the rapid expansion of the ethical and
socially responsible investment movement poses a new
challenge for companies as investors screen out those
associated with unacceptable social and environmental
performance.
Despite urgent calls for the adoption of corporate sustainability
management practices [18, 12, 13], its incorporation into
corporate organizational management often remains more
superficial than effective [18]. One of the reasons for this lack
of integration is, according to Briassoulis [19], both that
companies do not know how to measure and address the issues
in a systematic way, as well as the shortfall of available tools to
support sustainability management practices in concrete and
operational terms.
5. THE NECESSITY OF ECO-BUSINESS
INTELLIGENCE TOOLS
The business environment is not static, and companies that fail
to see the dynamics of change and adapt, are finally defeated
by those that succeed. Failure to identify risks is not related to
a particular area, however failure can be identified with the
mentality / culture within companies. The most likely to fail
are large and arrogant companies that become cumbersome to
change and unable to adapt to market developments. On the
other hand, studies show that surprise attacks were not
successful due to the skills of misleading the competitor or the
lack of early warning signals. They were unsuccessful due to
lack of accountability and believe as they happen, which led to
ignoring the signs of risk. Due to lack of discernment and a
formal system to overcome the deadlock in time, certain
managers are waking up only when crisis strikes and the
performance is low. At this point, it is already too late for
recovery, both for themselves and for the company, employees
and investors, which ultimately end up paying the price of
management errors.
It is necessary for senior management to demand not only the
information you want to possess and those that need to know.
This principle applies to structures for collecting and
processing information, which should provide not only
information management needs (specific information required
by management) and those that represent or may represent a
point of utmost importance for management structures.
The flow of information and decision should be one fluid, in
both senses of the chain of command, to prevent formation of
undesirable vacuum. Stagnation at the decision flow of
information and response is partial or total closure of the
system.
Openness to new ideas, new information for decision
calculated and filtered, not just focus on tradition and

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innovation can create a system capable of self-sustaining at
risk. Intuition management becomes valuable when it is
supported by values well aware, however, intuition turned
spectrum of cognitive dissonance will certainly lead to a failure
predetermined side effects.
Knowing the vulnerabilities and threats, risk assessment
strategies based on tradition and innovation, monitoring
information internally and externally, using internal and
external tools for collecting and processing information,
facilitate a continuous flow of information (flow obstructions
may lead the partial or total collapse of the system) - are
elements necessary for the operation management through
business intelligence system
6. A DECISION SUPPORT SYSTEM FOR
MANUFACTURING – A TOOL FOR
SUSTAINABLE MANAGEMENT
Making decisions by intuition, knowing that the decision will
affect the whole production process or the whole company, it’s
not the best way of management. That’s why it’s important to
have a computer-based information system that supports
organizational or business decision-making activities. Decision
Support Systems (DSS) serve the management, operations and
planning level of an organization and are helpful for making
decisions, which may be rapidly changing and not easily
specified in advance.
A computer-based decision support system can be easily
integrated in the operational management process, assuring a
fast and waste-reducing solution for issues that are often
encountered in manufacturing organizations. As stated before,
many organizations try to adapt to the dynamics and trends of
the business environment and “greening” the production
process has become a must. The following example shows the
utility of such a tool that can generate competitive advantages
and improve the company’s image in the eyes of its clients who
are increasingly demanding eco-production of goods and
services.
The proposed decision support system allows the decision
maker to choose the best alternative out of a set of possible
interventions, based on a group of custom-defined criteria.
The system allows the use of an indefinite number of
alternatives and criteria. Underlying the DSS is an innovative
approach that combines two well-known algorithms: the
hierarchic-analytic process, used mainly in operations
management, and the advanced multi-criteria analysis based on
the FRISCO formula. A detailed description of this combined
algorithm may be found in the work of Grecu and Denes [20].
The developed algorithm requires good mathematical abilities
from the user, and this can therefore limit the real-life
applicability of the proposed decision support system. In order
to make it easier to use the DSS and increase the number of
potential users, the DSS was implemented online with a user-
friendly interface. For this purpose, an extension for the
content management system Joomla! 1.5 was developed. It can
be easily integrated into any website created with Joomla! 1.5
[21]. The purpose of our approach is to offer a finite tool to
decision makers by leaving the computational part to the
server. We are thus allowing users to concentrate on planning
issues rather than having to understand the formulas that lie
behind the algorithm.
6.1. Deciding which metal-cutting system is best
There are so many variables to be considered when making a
decision on the right cutting system to use, it is often a difficult
analysis. The metal processor and, to some degree the end-user
of the material, must consider at least some of the following
issues:
• Cutting speed
• Edge cleanliness
• Degree of tolerance required
• Number and types of metal to be cut
• Capital investment
• Operating costs
• Size of heat affected zone
• Access to secondary machining processes
There is no one overall answer to the question “Which metal
cutting system is best?" The factors that are important to one
metal processor will be different from those of another
depending on their customers’ needs. The “best" metal cutting
process depends on the material to be cut and the final
application of the material. There is no cutting system that is
superior to another in all major comparison categories.
6.2. The working principle of the DSS
For exemplification it is used a hypothetical situation for a
decision in a situation for choosing the best cutting method of a
material, with five decision alternatives and five selection
criteria. First, the user is requested to enter the number of
criteria (Figure 1) and specify (Figure 2) the name of each
criterion (C1 – C5).
Then a quadratic matrix is generated and the user has to
compare each criterion against the others. One can choose
whether each criterion is more important, equally important or
less important than other criteria (Figure 3). It is important to
remember that the relationships between criteria are the choice
of the decision maker.
This choice can be based on experience, literature review,
statistic evidence or other specific needs. This step basically
establishes a hierarchy of the chosen criteria and each criterion
is given a weight.

Figure 1. Choosing the number of criteria

Figure 2. Naming the criteria

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Figure 3. Comparing the criteria
Then, the user is asked to enter the number of decision
alternatives (Figure 4), to define/name them (Figure 5) and
then to compare each alternative against the others based on
how they satisfy each criterion (Figure 6). For example, when
the alternatives are compared considering the criterion “Cost”,
the cheaper alternative is considered “more important”.

Figure 4. Choosing the number of alternatives

Figure 5. Naming the alternatives

Figure 6. Comparing the alternatives based on each criterion

Figure 7. The solution has been generated

Figure 8. The ranking of the alternatives
The software then uses the encoded mathematical algorithm
and returns the optimal solution, as shown in figures 7 and 8.
This allows the decision maker to make an informed decision,
based on specific needs and the particularities of each cutting
method, rather than intuition.
6.3. Other applications of the DSS
The proposed DSS allows the decision maker to define his/her
own set of decision alternatives and selection criteria, it has a
virtually ubiquitous applicability, being adaptable for all
decision scenarios where it is required to choose from a list of
alternatives, based on a set of criteria. The proposed decision
support system speeds up the decision making process and
increases the quality of the management process.
Underlying the proposed DSS is an innovative approach that
combines two well-known algorithms: the hierarchic-analytic
process, used mainly in operations management, and the
advanced multi-criteria analysis based on the FRISCO formula.
The developed algorithm requires good mathematical abilities
from the user, and this can therefore limit the real-life
applicability of the proposed decision support system. In order
to make it easier to use the DSS and increase the number of
potential users, it was implemented online with a user-friendly
interface.
Further research may mean creating a series of databases with
recommendations based on knowledge, in order to guide the
user when choosing the decision criteria and their importance
for the project.
7. CONCLUSIONS
After years of significant investment in putting in place a
technological platform that supports business processes and
strengthens the efficiency of operational structure, most
organizations have reached a point where the use of tools to
support the decision making process at the strategic level
emerges as more important than ever. Herein lies the
importance of the area known as business intelligence (BI),
seen as a response to current needs in terms of access to
relevant information through intensive use of information
technology (IT) [22]. BI systems have the potential to
maximize the use of information by improving the company’s
capacity to structure a large volume of information and make it
accessible, thereby creating competitive advantage, what
Davenport calls ‘‘competing on analytics” [23].
Sustainability topics are influencing the economic success of
companies more than ever. Sustainability has become a driver
for both risks and opportunities in business. Strategic
management and information management are thus challenged
to take into account sustainability information. Independent of
the strength of their influence, elements of sustainability can
work through market or non-market processes to have an effect
on business success [24].
The starting point for an effective management of elements of
sustainability relevant to business success is an understanding
of their interrelationships. Building a sustainable business is a
long-term and multilevel challenge which requires strategic
thinking and a systems approach. Corporate sustainability is
not an ‘add on’ but must be an integral part of business and,
like all other business activities, it must be managed in an
appropriate way.
Although business responses to corporate sustainability issues
are varied, the core message is simple: corporate sustainability

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is a managerial issue as well as a strategic issue. Researches
also indicate that a company’s decision to engage in corporate
sustainability management is a strategic choice [13].
The managerial approach sees BI as a process in which data
gathered from inside and outside the company are integrated in
order to generate information relevant to the decision-making
process. The role of BI here is to create an informational
environment in which operational data gathered from
transactional systems and external sources can be analyzed, in
order to reveal ‘‘strategic” business dimensions for the
transition towards the sustainable organization.
8. ACKNOWLEDGEMENTS
This work was supported by the strategic grant
POSDRU/159/1.5/S/133255, Project ID 133255 (2014), co-
financed by the European Social Fund within the Sectorial
Operational Program Human Resources Development 2007 –
2013.
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