All business is digital, yet digital for its own sake is not enough. Environmental, social, and governance (ESG) factors have evolved from compliance to market imperative, all around the world, including India. Now the focus shifts to tech for good and an integrated digital and ESG strategy, as enterprises face an uncertain but hopeful future. Profit with purpose is an organization’s appreciation of addressing sustainable value creation for all its stakeholders, including shareholders, employees, clients, vendors, environment, and the society at large.
As per Infosys Digital Radar 2022, which surveyed more than 2600 technology and business leaders across industries this technological approach to ESG works; and works well. The more effective a firm’s technology is at meeting its goals, the more likely it is to be profitable. Even further, and this is the clincher, it turns out that if a firm does ESG well, their technology is even more effective. The culture, methods, and skills required to do ESG well match up to those that deliver effective technology implementations.
Regardless of country, industry, or company size, the report found that ESG commitment significantly impacts transformation effectiveness. With purpose pointing the way for digital transformation, leaders consider ever-changing customer and employee expectations, and an increasing list of ESG-minded stakeholders. A strong ESG commitment undoubtedly provides the people-focused framework to steer technology in the right direction.
Technology with purpose delivers better results, but challenges to optimization remain
Technology built with human-centric purposes in mind is a key part of the ESG equation. And there are numerous firms that back up this claim that a deep commitment to real humans provides profit, purpose and direction for today’s powerful tech tools. Companies around the world, are moving past customer metrics such as “well-priced quality, quickly” to deliver “rich technology experiences, with purpose”. That purpose includes customer perception of corporate practices, and in the case of employees, additional dimensions of opportunities and support.
Digital alone is not living up to its promise. Intended technology outcomes, such as improving customer engagement, are not comprehensive enough and not always delivered. As seen in the report higher levels of tech adoption do not lead to higher profits. Taking a micro change approach ensures continuous and incremental value realization.
The challenges of a federated, decentralized tech estate that challenge optimization are coming into focus, as well. For example, a novice programmer using low-code/no-code tools could add security holes to a company’s codebase. Technology experts remain relevant by guarding against these risks in a world where business and tech borders have faded. While the rise of citizen developers is a good thing — no more “us” and “them” — companies are struggling to govern assets without bogging them down in bureaucracy. Also, they are developing standards to qualify citizen developers and ensure they are educated to be responsible with the technology.
The four pillars to leverage tech for purpose
Companies have made tremendous strides in digital transformation over the past decade, and especially the past two years. They can build on these successes, applying the same basic ingredients for successful transformation to ESG initiatives: good science, solid engineering, and human commitment. To do the same, executives should leverage technology across the four pillars of experience, project delivery, talent and “quantifiable” ESG.
1. Integrate experience into the operating model: The modern operating model values interactions over transactions, and human experiences must be adaptable, inclusive, and measurable. Technology solutions need to be adaptable so organizations can react to change in a fast, frictionless, and cost-effective way.
2. Elevate the human element across the product lifecycle: Data privacy, cloud access, and inclusive systems have one thing in common. They focus on the human element throughout project delivery. Good products are built with ethics in mind, with careful thought given to human fears and anxieties.
3. Build diverse, dedicated teams: In a purpose-driven culture, solutions are designed through different lenses, meeting the needs of all people.
4. Measure initiatives using ESG targets: To prove that ESG is driving profits, firms must formally measure attributes like carbon emissions and ethical governance. This scientific approach gives rise to results-oriented, actional programmes linked to operational and financial goals.
Building for a human-centric approach
A strong link between ESG and effectiveness has been revealed. Those that capitalize on this link are best placed to succeed in the decade ahead, from actual business value and by anticipating regulatory requirements. An evolution from compartmental corporate social responsibility and “do good while making money” to integrated ESG and “generate impact through a single sustainable bottom line” is inevitable. The message for the future is clear – transformation criteria and capabilities have evolved, and ESG practices have become an integral component of transformation success. Adopt new technology with a human focus, and transformation effectiveness — and greater profitability — will follow.
by Narsimha Rao Mannepalli, Executive Vice President, Head – Cloud Infrastructure and Security Solutions, Infosys
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