Make Sense of Strategic Portfolio Management

Separate what's new and valuable from bloated claims on the hype cycle.

Analyst Perspective

Do you need strategic portfolio management, or do you need to do portfolio management more strategically?

Travis Duncan
Research Director, PPM and CIO Strategy
Info-Tech Research Group

While the market is eager to get users into what they're calling "strategic portfolio management," there's a lot of uncertainty out there about what this market is and how it's different from other, more established portfolio disciplines – most significantly, project portfolio management.

Indeed, if you look at how the space is covered within the industry, you'll encounter a dog's breakfast of players, a comparison of apples and oranges: Jira in the same quadrants as Planisware, Smartsheets in the same profiles as Planview and ServiceNow. While each of the individual players is impressive, their areas of focus are unique and the extent to which they should be compared together under the category of strategic portfolio management is questionable.

It speaks to some of the grey area within the SPM space more generally, which is at a bit of a crossroads: Will it formally shed the guardrails of its antecedents to become its own space, or will it devolve into a bait and switch through which capabilities that struggled to gain much traction beyond IT settings seek to infiltrate the business and grow their market share under a different name?

Part of it is up to the rest of us as users and potential customers. Clarifying what we need before we jump into something simply because our prior attempts failed will help determine whether we need a unique space for strategic portfolio management or whether we simply need to do portfolio management more strategically.

Executive Summary

Info-Tech Insight
In the same way that it took many years for PPM to stabilize as a concept distinct from traditional enterprise project management, strategic portfolio management is experiencing a similar period of formational uncertainty. In a space that can be all things to all users, clarify your actual needs before jumping onto a bandwagon and ending up with something that you don't need, and that the organization can't adopt.

Strategic portfolio management is enterprise portfolio management

Evolved from various other capabilities and vendor solutions, strategic portfolio management (SPM) seeks to connect strategy to execution.

While the concept of 'strategic portfolio management' has been written about within project portfolio management circles for nearly 20 years, SPM, as a distinct organizational competence and software category, is a relatively new and largely vendor-driven capability.

First emerging in the discourse during the mid-to-late 2010s, SPM has evolved from its roots in traditional enterprise project portfolio management. Though, as we will discuss, it has other antecedents not limited to PPM.

In this publication, we'll unpack what SPM is, how it is distinct (and, in turn, how it is not distinct) from PPM and other capabilities, and we will consider the extent to which your organization can and should leverage an SPM application to help drive strategic outcomes.

–The increasing need to deliver value from digital initiatives is giving rise to strategic portfolio management, a digital investment management discipline that enables strategy realization in complex dynamic environments."
– OnePlan, "Is Strategic Portfolio Management the Future of PPM?"

Only 2% of business leaders are confident that they will achieve 80% to 100% of their strategic objectives.
Source: Smith, 2022

Put strategic portfolio management in context

SPM is a new stage in the history of project portfolio management more generally. While it's emerging as a distinct capability, and it borrows from capabilities beyond PPM, unpacking its distinctiveness is best done by first understanding its source.

Understand the recent triggers for strategic portfolio management

Triggers for the emergence of strategic portfolio management in the discourse include the pace of technology-introduced change, the waning of enterprise project management, and challenges around enterprise PPM tool adoption.

Spot the difference?

Scope, focus, and audience are just a few of the factors distinguishing what the market calls "SPM" from traditional PPM.

Info-Tech Insight
The distinction between the two capabilities is not necessarily as black and white as the table above would have it (some "PPM" tools offer what we're identifying above as "SPM" capabilities), but it can be helpful to think in these binaries when trying to distinguish the two capabilities. At the very least, SPM broadens its scope to target more executive and business users, and functions best when it's speaking at a higher level, to a business audience.

Strategic portfolio management offers a more holistic view of the enterprise

At its best, strategic portfolio management can accommodate various paradigms of work management and incorporate different types of portfolio management.

Perhaps the biggest evolution from traditional PPM that strategic portfolio management promises is that it casts a wider net in terms of the types of work it tracks (and how it tracks that work) and the types of portfolios it accommodates.

Not bound to the concepts of "projects" and a "project portfolio" specifically, SPM broadens its scope to encompass capabilities like product and product portfolio management, enterprise architecture management, security and risk management, and more.

• Where a PPM solution only shows one piece of the puzzle, SPM looks at the entire investment ecosystem, tracking strategic goals, the ideas generated to help achieve those goals, and all the various kinds of investments made in the service of those goals.
• what's more, where traditional PPM tools required users to adhere to a certain way of working and managing tasks, SPM is more flexible, relying on integrations across various ways of working to provide higher-level insight on the progress of work and the achievement of goals.

Deliver business strategy and change effectively

"An SPM tool will capture business strategy, business capabilities, operating models, the enterprise architecture and the project portfolio with unmatched visibility into how they all relate. This will give...a robust understanding of the impact of a proposed IT change " and enable IT and business to act like cocreators driving innovation."
– Paula Ziehr

You might need a strategic portfolio management tool if–

If you find yourself facing any of these situations, it might be time to step away from your PPM tool and into an SPM approach:

• Your organization is facing a large implementation that will cross multiple departmental units and requires alignment across senior leadership (e.g. a digital transformation initiative).
• You currently have disparate systems tracking different portfolios (project, product, applications, etc.) and types of investments, but lack insight into the whole in terms of how work efforts and investments tie back to strategy realization.
• You are an ePMO or a strategy realization office that doesn't manage work necessarily, but that rather ensures that the work, assets, and capabilities that are funded connect to strategy and drive the realization of strategy.

Sixty one percent of leaders acknowledge their companies struggle to bridge the gap between creating a strategy and executing on that strategy.
Source: StrategyBlocks, 2020

Get to know your strategic portfolio management stakeholders

In terms of users, SPM's focus is further up the org chart than most applications, relying on high-level but usable outputs to help drive decision making.

What should you look for in a strategic portfolio management tool? (1 of 2)

Standard features for SPM include:

What should you look for in a strategic portfolio management tool? (2 of 2)

Advanced features for SPM can include:

What's promising within the space?

As this space continues to stabilize, the following are some promising associations for business and IT enablement.

What's of concern within the space?

As a progeny from other capabilities, SPM has some risks and connotations potential users should be wary of.

Does your organization need a strategic portfolio management tool?

Use Info-Tech's Strategic Portfolio Management Needs Assessment to gauge your readiness for SPM.

• As noted in previous places in this deck, there is often a grey area in the market between project portfolio management tools and strategic portfolio management tools.
• Some PPM tools offer SPM functionality, while some SPM tools avoid traditional PPM outcomes and stay at a higher, strategic level.
• Depending on the scope of your PMO or portfolio optimization needs, you may need a tool that has just one, or both, of these capabilities.
• Use Info-Tech's Strategic Portfolio Management Needs Assessment to help you assess whether you require a high-level strategy management tool, a more low-level project portfolio management tool, or a mix of both.

Download Info-Tech's Strategic Portfolio Management Needs Assessment

1.1 Assess your needs

10 to 20 minutes

1. The Strategic Portfolio Management Needs Assessment is a 41-question survey broken up into three parts: (1) PMO Type, (2) Features and Functionality, (3) Roles.
2. Go through each section using the provided dropdowns to help identify the orientation of your PMO, the feature and functionality needs of your office, as well as the roles whose needs will need to be serviced through the potential tool implementation.

This screenshot shows a sample output from the assessment. Based upon your inputs, you'll be grouped within three ranges:

1. Green: Based upon your inputs, you will benefit from an SPM tool.
2. Yellow: You may benefit from an SPM tool, but you may also require something more traditional. Clarify your requirements before proceeding.
3. Red: you're unlikely to leverage many of the benefits of an SPM tool at this time. Look for a more tactical solution.

Explore the SPM vendor landscape

Use Info-Tech's application selection resources to help find the right solution for your organization.

If the analysis in the previous slides suggested you can benefit from an SPM tool, you can quick-start your vendor evaluation process with SoftwareReviews.

SoftwareReviews has extensive coverage of not just the SPM space, but of the project portfolio management (pictured to the top right) and project management spaces as well. So, from the tactical to the strategic, SoftwareReviews can help you find the right tools.

Further, as you settle in on a shortlist, you can begin your vendor analysis using our rapid application selection methodology (see framework on bottom right). For more information see our The Rapid Application Selection Framework blueprint.

Info-Tech's Rapid Application Selection Framework (RASF)

Related Info-Tech Research

Develop a Project Portfolio Management Strategy
Drive IT project throughput by throttling resource capacity.

Prepare an Actionable Roadmap for your PMO
Turn planning into action with a realistic PMO timeline.

Maintain an Organized Portfolio
Align portfolio management practices with COBIT (APO05: Manage Portfolio)

Bibliography

Angliss, Katy, and Pete Harpum. Strategic Portfolio Management: In the Multi-Project and Program Organization. Book. Routledge. 30 Dec. 2022.

Anthony, James. "95 Essential Project Management Statistics: 2022 Market Share & Data Analysis." Finance Online. 2022. Web. Accessed 21 March 2022

Banham, Craig. "Integrating strategic planning with portfolio management." Sopheon. Webinar. Accessed 6 Feb. 2023.

Garfein, Stephen J. "Executive Guide to Strategic Portfolio Management: roadmap for closing the gap between strategy and results." PMI. Conference Paper. Oct. 2007. Accessed 6 Feb. 2023.

Garfein, Stephen J. "Strategic Portfolio Management: A smart, realistic and relatively fast way to gain sustainable competitive advantage." PMI. Conference Paper. 2 March 2005. Accessed 6 Feb. 2023.

Hontar, Yulia. "Strategic Portfolio Management." PPM Express. Blog 16 June 2022. Accessed 6 Feb. 2023.

Milsom, James. "6 Strategic Portfolio Management Trends for 2023." i-nexus. Blog. 25 Jan. 2022. Accessed 6 Feb. 2023.

Milsom, James. "Strategic Portfolio Management 101." i-nexus. 8 Dec. 2021. Blog . Accessed 6 Feb. 2023.

OnePlan, "Is Strategic Portfolio Management the Future of PPM?" YouTube. 17 Nov. 2022. Accessed 6 Feb. 2023.

OnePlan. "Strategic Portfolio Management for Enterprise Agile." YouTube. 27 May 2022. Accessed 6 Feb. 2023.

Piechota, Frank. "Strategic Portfolio Management: Enabling Successful Business Outcomes." Shibumi. Blog . 31 May 2022. Accessed 6 Feb. 2023.

ServiceNow. "Strategic Portfolio Management—The Thing You've Been Missing." ServiceNow. Whitepaper. 2021. Accessed 6 Feb. 2023.

Smith, Shepherd, "50+ Eye-Opening Strategic Planning Statistics" ClearPoint Strategy. Blog. 13 Sept. 2022. Accessed 6 Feb. 2023.

SoftwareAG. "What is Strategic Portfolio Management (SPM)?" SoftwareAG. Blog. Accessed 6 Feb. 2023.

Stickel, Robert. "What It Means to be Adaptive." OnePlan. Blog. 24 May 2021. Accessed 6 Feb. 2023.

UMT360. "What is Strategic Portfolio Management?" YouTube. Webinar. 22 Oct. 2020. Accessed 6 Feb. 2023.

Wall, Caroline. "Elevating Strategy Planning through Strategic Portfolio Management." StrategyBlocks. Blog. 26 Feb. 2020. Accessed 6 Feb. 2023.

Westmoreland, Heather. "What is Strategic Portfolio Management." Planview. Blog. 19 Oct 2002. Accessed 6 Feb. 2023.

Wiltshire, Andrew. "Shibumi Included in Gartner Magic Quadrant for Strategic Portfolio Management for the 2nd Straight Year." Shibumi. Blog. 20 Apr. 2022. Accessed 6 Feb. 2023.

Ziehr, Paula. "Keep your eye on the prize: Align your IT investments with business strategy." SoftwareAG. Blog. 5 Jul. 2022. Accessed 6 Feb. 2023.

Develop an IT Infrastructure Services Playbook

Automation, SDI, and DevOps – build a cheat sheet to manage a changing Infrastructure & Operations environment.

Table of contents

Analyst Perspective

Executive Summary

Project Overview

• Phase 1: Define and Prioritize Infrastructure Services
  • 1.1: Define the services you own
  • 1.2: Prioritize infrastructure services
• Phase 2: Build Workflows and an Infrastructure Services Playbook
  • 2.1: Design workflow for service delivery
  • 2.2: Build a services playbook
• Phase 3: Identify Costs and Mature Service Delivery Capabilities
  • 3.1: Eliminate infrastructure service costs
  • 3.2: Mature your I&O organization into a service broker

Summary and Conclusion

ANALYST PERSPECTIVE

Technology is changing how infrastructure services are delivered.

"Managing a hybrid infrastructure environment is challenge enough. Add to this the pressure on IT Operations to deliver services faster and more continuously – it’s a recipe for boondoggle deployments, overcommitted staff, end-user frustration, and operational gridlock.

It’s not every service you provide that causes problems, so prioritize a few in-demand, painful services. Build and maintain durable, flexible processes that enable your team to provide consistent, repeatable services at a standard cost. Identify opportunities to improve service delivery.

You’ll save the business time and money and your own team significant grief." (Andrew Sharp, Research Manager, Infrastructure & Operations, Info-Tech Research Group)

Your infrastructure and operations team is a service provider; standardize, document, and communicate service capabilities

This Research is Designed For:

• CTOs and Infrastructure Managers
• Service Level Managers
• ITSM Managers and Process Owners

This Research Will Help You:

• Inventory services that IT Infrastructure & Operations (I&O) provides to the business (servers, storage, and network).
• Standardize services and track costs.
• Articulate the value of these services to business owners.
• Develop a catalog of infrastructure services.

This Research Will Also Assist:

• CIOs
• Application Development Managers
• Security Managers
• Auditors

This Research Will Help Them:

• Understand the complexities of technical service delivery.
• Make better strategic IT infrastructure decisions.

Executive summary

Situation

• Infrastructure and operations teams are managing deployments on- and off-premises and across multiple infrastructure service providers.
• Though automation tools speed up the delivery process, documentation is always pushed off so the team can meet urgent deadlines.

Complication

• Cloud providers have set the bar high for ease of access to stable infrastructure services.
• Without documented delivery processes, wait times are longer, controls are adequate but ad hoc, builds are non-standard, and errors are more likely to be introduced in production.

Resolution

• Prioritize in-demand services for documentation and standardization.
• Build service workflows and document service requirements in the services playbook.
• Create a costing model and track costs to deliver defined services.
• Leverage data on costs and service requirements to improve service delivery.

Info-Tech Insight

1. Keep it simple. Work through a few in-demand services to get early value from the project.
2. Don’t get lost in automation or tooling. You don’t need a complex tool or back-end automation to get value from standardized services.
3. Do then iterate. With a few completed service processes, it’s much easier to identify opportunities for service automation.

Create an infrastructure services playbook to improve efficiency, support DevOps, and streamline service delivery

Begin building an infrastructure services playbook by defining the services you provide. This will also help your team support changes to service delivery (e.g. more use of cloud services and the shift to DevOps).

In this blueprint, the first step will be to document infrastructure services to:

1. Clarify infrastructure capabilities and achievable service levels.

   Document infrastructure services to clarify achievable service levels with given resources and what you will need to meet service-level requirement gaps. Establishing your ability to meet customer demands is the first step toward becoming a broker of internal or external services.

2. Standardize infrastructure service delivery.

   Sometimes, it’s extremely important to do the exact same thing every time (e.g. server hardening). Sometimes, your team needs room to deviate from the script. Create a playbook that allows you to standardize service delivery as needed.

3. Make good strategic infrastructure decisions.

   Knowledge is power. Defined services and capabilities will help you make important strategic infrastructure decisions around capacity planning and when outsourcing is appropriate.

Review and optimize infrastructure service delivery as you shift to more cloud-based services

If you can’t standardize and streamline how you support cloud services, you risk AppDev and business leaders circumventing the I&O team.

	Example: Create a new server resource in a virtual environment vs. public cloud In a virtualized environment, provisioning processes can still be relatively siloed. In a software-defined environment, many steps require knowledge across the infrastructure stack. Better documentation will help your team deliver services outside their area of specialty.
Identify CPU requirements for a virtual machine (VM) Calculate VM memory requirements Configure the floppy drive for a VM Configure IDE devices for a VM Configure SCSI adapters for a VM Configure network adapters for a VM Configure VM priority for host CPU resources Server is live		Complete SDI code development & review, version control, build status, etc. Identify software and specifications for the instance you want to use Review configuration, storage, and security settings Secure the instance with an existing key pair or create a new key pair Update documentation – public IP address, physical & logical connections, data flows, etc. Launch and connect to instance Server is live

Strengthen DevOps with an infrastructure playbook

The purpose behind DevOps is to reduce friction and deliver faster, more continuous, more automated services through the use of cross-functional teams.

DevOps: bridging Applications Development and Infrastructure & Operations by embracing a culture, practices, and tools born out of Lean and Agile methodologies.

• Create a common language across functions.
• Ensure that all service steps are documented.
• Move towards more standard deployments.
• Increase transparency within the IT department.
• Cultivate trust across teams.
• Build the foundation for automated services.

"The bar has been raised for delivering technology products and services – what was good enough in previous decades is not good enough now." (Kim, Humble, Debois, Willis (2016))

Leverage an infrastructure services playbook to improve service delivery, one step at a time

Crawl Prioritize infrastructure services that are good candidates for standardization. Document the steps and requirements to deliver the service. Use the playbook and workflows internally as you gather requirements and deliver on requests. Track costs internally.	Walk Provide infrastructure clients with the playbook and allow them to make requests against it. Update and maintain existing documentation. Automate, where possible. Showback costs to the business.	Run Provide infrastructure customers with scripts to provision infrastructure resources. Audit requests before fulfilling them. Chargeback costs, as needed.

Focus on in-demand infrastructure services — PHASE 1

Standardize in-demand, repeatable services first.

Demand for infrastructure services is usually driven by external requests or operational requirements. Prioritize services based on criticality, durability, frequency, availability, and urgency requirements.

Scheduling Delays

• Dealing with a slew of capital projects driven by a major funding initiative, the IT team of a major US transit system is struggling to execute on basic operational tasks.

Action:
• A brainstorming and prioritization exercise identifies web server deployment as their most in-demand service.
• Identifying breakdowns in web server deployment helps free up resources for other tasks and addresses a serious pain point.

Think outside the box

• On a new project for a sporting goods client, the IT department for a marketing firm deploys and supports a “locker” kiosk that users engage with for a chance to win a gift.

Action:
• As the campaign proves successful, the I&O Manager creates a playbook to guide kiosk support and deployment in the future, including required skills, timelines, success metrics, and costs.

Keep it standard, keep it safe

• An IT audit at a higher education institution finds that no standard process for server hardening has been defined or documented by the infrastructure team.

Action:
• Improving IT security is a strategic priority for the department.
• The infrastructure team decides to standardize and document processes, guidelines, and configurations for hardening OS, SCCM, SaltStack, scripting, and patching.

Leverage service workflows to populate the playbook — PHASE 2

Infrastructure as Code is breaking down traditional infrastructure silos and support models.

1. Document the workflow to deliver the service. Identify pain points and target broken processes first.
   Provision –› Configure –› Run –› Quiesce –› Destroy
2. Define logical expected results and metrics for problematic steps in the process. Identify challenges and possible improvements to each problematic step.
   

   Building and deploying toolsets is taking a long time
   Start Create a baseline offering for common requests. Make clear that non-standard requests will take time to fulfil.	Stop Move to just one web server.	Continue Use weekly drop-ins to communicate the change.

3. Document skills and roles, approvers, and pre-requirements to fill out the documentation, as needed. Use the documented process to guide internal process and align with external expectations.

Cross-silo knowledge is needed: In a software-defined environment, building and launching a new server requires knowledge across the stack.

• Complete SDI code development & review, version control, build status, etc.
• Identify software and specifications for the instance you want to use
• Review configuration, storage, and security settings
• Secure the instance with an existing key pair, or create a new key pair
• Update documentation – public IP address, physical & logical connections, data flows, etc.
• Launch and connect to the instance

Server is live

Take a progressive approach to cost tracking — PHASE 3

Infrastructure & Operations are bound by two metrics:

1. Are systems up?
2. Is technology delivered as efficiently as possible?

Because tracking cost is integral to efficiency, cost and budget management, by proxy, is one of the most important Infrastructure & Operations metrics.

Cost management is not a numbers game. It is an indicator of how well infrastructure is managed.

Track costs in a practical way that delivers value to your organization:

1. Build and leverage an internal rate sheet to help estimate cost to serve.
2. Showback rate sheet to help managers and architects make better infrastructure decisions.
3. Chargeback costs to defined cost centers.

Project overview

Use Info-Tech’s methodology to get value faster from your infrastructure services playbook.

Use these icons to help direct you as you navigate this research

Use these icons to help guide you through each step of the blueprint and direct you to content related to the recommended activities.

This icon denotes a slide where a supporting Info-Tech tool or template will help you perform the activity or step associated with the slide. Refer to the supporting tool or template to get the best results and proceed to the next step of the project.

This icon denotes a slide with an associated activity. The activity can be performed either as part of your project or with the support of Info-Tech team members, who will come onsite to facilitate a workshop for your organization.

Info-Tech offers various levels of support to best suit your needs

Diagnostics and consistent frameworks used throughout all four options

Guided Implementation Overview

Your Trusted Advisor is just a call away.

Your Guided Implementation will pair you with an advisor from our analyst team for the duration of your infrastructure services project.

Workshop Overview

Develop an IT Infrastructure Services Playbook

PHASE 1

Define and Prioritize Infrastructure Services

Step 1.1: Define the services you own

This step will walk you through the following activities:

• Define “infrastructure service”
• Brainstorm service offerings
• Consolidate services with affinity map

This step involves the following participants:

• Infrastructure Manager
• I&O SMEs

Results & Insights

• Results: Consolidated list of end-to-end services
• Insights: Avoid analysis paralysis by brainstorming without restrictions. It is more effective to cut down in Step 1.2 rather than risk neglecting important services for the playbook.

Consider a range of infrastructure services

Your infrastructure team is a service provider to the applications team – and sometimes other users as well.

Service Requests

• A developer requests a new web server.
• The marketing department asks for a database to support a six-month digital marketing campaign.

Projects

• A new service is promoted to production.

Operations

• Firewall rules are updated to support server, network, or security posture changes.
• Standard practices are followed and maintained to harden a range of different operating systems.
• Engineers follow a standard process to integrate new tools and entitlements into Active Directory.
• Patches and firmware updates are applied to core infrastructure components as needed.

Problems

• A database batch job often breaks on overnight batch jobs and requires manual intervention to check and restart.

IT infrastructure & operations teams deliver services that fulfil requests, support projects, resolve problems, and operate systems.

Establish a Sustainable ESG Reporting Program

Strengthen corporate performance by implementing a holistic and proactive reporting approach.

Analyst Perspective

The shift toward stakeholder capitalism cannot be pinned on one thing; rather, it is a convergence of forces that has reshaped attitudes toward the corporation. Investor attention on responsible investing has pushed corporations to give greater weight to the achievement of corporate goals beyond financial performance.

Reacting to the new investor paradigm and to the wider systemic risk to the financial system of climate change, global regulators have rapidly mobilized toward mandatory climate-related disclosure.

IT will be instrumental in meeting the immediate regulatory mandate, but their role is much more far-reaching. IT has a role to play at the leadership table shaping strategy and assisting the organization to deliver on purpose-driven goals.

Delivering high-quality, relevant, and consistent disclosure is the key to unlocking and driving sustainable corporate performance. IT leaders should not underestimate the influence they have in selecting the right technology and data model to support ESG reporting and ultimately support top-line growth.

Yaz Palanichamy
Senior Research Analyst
Info-Tech Research Group

Donna Bales
Principal Research Director
Info-Tech Research Group

Executive Summary

Info-Tech Insight

Implementing a robust reporting program takes time. Start early, remain focused, and plan to continually improve data quality and collection and performance metrics

Putting “E,” “S,” and “G” in context

Corporate sustainability depends on managing ESG factors well

Environmental, social, and governance are the components of a sustainability framework that is used to understand and measure how an organization impacts or is affected by society as a whole.

Human activities, particularly fossil fuel burning since the middle of the twentieth century, have increased greenhouse gas concentration, resulting in observable changes to the atmosphere, ocean, cryosphere, and biosphere. The “E” in ESG relates to the positive and negative impacts an organization may have on the environment, such as the energy it takes in and the waste it discharges.

The “S” in ESG is the most ambiguous component in the framework, as social impact relates not only to risks but also to prosocial behavior. It’s the most difficult to measure but can have significant financial and reputational impact on corporations if material and poorly managed.

The “G” in ESG is foundational to the realization of “S” and “E.” It encompasses how well an organization integrates these considerations into the business and how well the organization engages with key stakeholders, receives feedback, and is transparent with its intentions.

The impact of ESG factors on investment decisions

Alleviate Investment Risk

Organizational Reputation: Seventy-four percent of those surveyed were concerned that failing to improve their corporate ESG performance would negatively impact their organization’s branding and overall reputation in the market (Intelex, 2022).

Ethical Business Compliance: Adherence to well-defined codes of business conduct and implementation of anti-corruption and anti-bribery practices is a great way to distinguish between organizations with good/poor governance intentions.

Shifting Consumer Preferences: ESG metrics can also largely influence consumer preferences in buying behavior intentions. Research from McKinsey shows that “upward of 70 percent” of consumers surveyed on purchases in multiple industries said they would pay an additional 5 percent for a green product if it met the same performance standards as a nongreen alternative (McKinsey, 2019).

Responsible Supply Chain Management: The successful alignment of ESG criteria with supply chain operations can lead to several benefits (e.g. producing more sustainable product offerings, maintaining constructive relationships with more sustainability-focused suppliers).

Environmental Stewardship: The growing climate crisis has forced companies of all sizes to rethink how they plan their corporate environmental sustainability practices.

Compliance With Regulatory Guidelines: An increasing emphasis on regulations surrounding ESG disclosure rates may result in some institutional investors taking a more proactive stance toward ESG-related initiatives.

Sustaining Competitive Advantage: Given today’s globalized economy, many businesses are constantly confronted with environmental issues (e.g. water scarcity, air pollution) as well as social problems (e.g. workplace wellness issues). Thus, investment in ESG factors is simply a part of maintaining competitive advantage.

Leaders increasingly see ESG as a competitive differentiator

The perceived importance of ESG has dramatically increased from 2020 to 2023

In a survey commissioned by Schneider Electric, researchers categorized the relative importance of ESG planning initiatives for global IT business leaders. ESG was largely identified as a critical factor in sustaining competitive advantage against competitors and maintaining positive investor/public relations.
Source: S&P Market Intelligence, 2020; N=825 IT decision makers

“74% of finance leaders say investors increasingly use nonfinancial information in their decision-making.”
Source: EY, 2020

Regulatory pressure to report on carbon emission is building globally

The Evolving Regulatory Landscape

Canada

• Canadian Securities Administrators (CSA) NI 51-107 Disclosure of Climate-related Matters

United States

• Securities and Exchange Commission (SEC) 33-11042 – The Enhancement and Standardization of Climate-Related Disclosures for Investors
• SEC 33-11038 Cybersecurity Risk Management, Strategy, Governance, and Incident Disclosure
• Nasdaq Board Diversity Rule (5605(f))

Europe

• European Commission Sustainable Finance Disclosure Regulation (SFDR)
• European Commission EU Supply Chain Act
• The German Supply Chain Act (GSCA)
• Financial Conduct Authority UK Proposal (DP 21/4) Sustainability Disclosure Requirements and investment labels
• UK Modern Slavery Act, 2015

New Zealand

• The Financial Sector (Climate-related Disclosures and Other Matters) Amendment Act 2021

Accurate ESG reporting will be critical to meet regulatory requirements

ESG reporting is the disclosure of environmental, social, and governance (ESG) data via qualitative and quantitative reports.

It is how organizations make their sustainability commitments and strategies transparent to stakeholders.

For investors it provides visibility into a company's ESG activities, enabling them to align investments to their values and avoid companies that cause damage to the environment or are offside on social and governance issues.

Despite the growing practice of ESG reporting, reporting standards and frameworks are still evolving and the regulatory approach for climate-related disclosure is inconsistent across jurisdictions, making it challenging for organizations to develop a robust reporting program.

However, organizations will struggle to meet reporting requirements

Despite the commitment to support an ESG Initiative, less than a quarter of IT professionals say their organization can accurately report on the impact of its ESG initiatives, and 44% say their reporting on impacts is not accurate.

Reporting accuracy was even worse for reporting on carbon footprint with 46% saying their organization could not report on its carbon footprint accurately. This despite most IT professionals saying they are working to support environmental mandates.

Global sustainability rankings based on ESG dimensions

Global Country Sustainability Ranking Map

Country Sustainability Scores (CSR) as of October 2021
Scores range from 1 (poor) to 10 (best)
Source: Robeco, 2021

ESG Performance Rankings From Select Countries

Top ESG and sustainability performer

Finland has ranked consistently as a leading sustainability performer in recent years. Finland's strongest ESG pillar is the environment, and its environmental ranking of 9.63/10 is the highest out of all 150 countries.

Significant score deteriorations

Brazil, France, and India are among the countries whose ESG score rankings have deteriorated significantly in the past three years.

Increasing political tensions and risks as well as aftershock effects of the COVID-19 pandemic (e.g. high inequality and insufficient access to healthcare and education) have severely impacted Brazil’s performance across the governance and social pillars of the ESG framework, ultimately causing its overall ESG score to drop to a CSR value of 5.31.

Largest gains and losses in ESG scores

Canada has received worse scores for corruption, political risk, income inequality, and poverty over the past three years.

Taiwan has seen its rankings improve in terms of overall ESG scores. Government effectiveness, innovation, a strong semiconductor manufacturing market presence, and stronger governance initiatives have been sufficient to compensate for a setback in income and economic inequality.

Source: Robeco, 2021

Establish a Sustainable Environmental, Social, and Governance (ESG) Reporting Program

Blueprint benefits

Business Benefits

• Clarity on technical and organizational gaps in the organization’s ability to deliver ESG reporting strategy.
• Transparency on the breadth of the change program, internal capabilities needed, and accountable owners.
• Reduced likelihood of liability.
• Improved corporate performance and top-line growth.
• Confidence that the organization is delivering high-quality, comprehensive ESG disclosure.

IT Benefits

• Understanding of IT’s role as strategic enabler for delivering high-quality ESG disclosure and sustainable corporate performance.
• Transparency on primary data gaps and technology and tools needed to support the ESG reporting strategy.
• Clear direction of material ESG risks and how to prioritize implementation efforts.
• Awareness of tool selection options.

Blueprint deliverables

Each step of this blueprint is accompanied by supporting deliverables to help you accomplish your goals:

Info-Tech offers various levels of support to best suit your needs

DIY Toolkit
"Our team has already made this critical project a priority, and we have the time and capability, but some guidance along the way would be helpful."

Guided Implementation
"Our team knows that we need to fix a process, but we need assistance to determine where to focus. Some check-ins along the way would help keep us on track."

Workshop
"We need to hit the ground running and get this project kicked off immediately. Our team has the ability to take this over once we get a framework and strategy in place."

Consulting
"Our team does not have the time or the knowledge to take this project on. We need assistance through the entirety of this project."

Diagnostics and consistent frameworks are used throughout all four options.

Guided Implementation

A Guided Implementation (GI) is a series of calls with an Info-Tech analyst to help implement our best practices in your organization.

A typical GI is 8 to 12 calls over the course of 4 to 6 months.

What does a typical GI on this topic look like?

Workshop Overview

Contact your account representative for more information.
workshops@infotech.com
1-888-670-8889

Phase 1

Explore ESG Reporting

This phase will walk you through the following:

• Define key stakeholders and material ESG factors.
• Identify material ESG issues.
• Develop SMART program metrics.
• List reporting obligations.
• Surface high-level data gaps.
• Record high-level implementation considerations.

This phase involves the following participants: CIO, CCO, CSO, business leaders, legal, marketing and communications, head of ESG reporting, and any dedicated ESG team members

Practical steps for ESG disclosure

Measuring and tracking incremental change among dimensions such as carbon emissions reporting, governance, and diversity, equity, and inclusion (DEI) requires organizations to acquire, analyze, and synthesize data from beyond their internal organizational ecosystems

1.1 Ensure your reporting requirements are comprehensive

This section will walk you through some key considerations for establishing your ESG reporting strategy. The first step in this process is to identify the scope of your reporting program.

Defining the scope of your reporting program

1. Stakeholder requirements: When developing a reporting program consider all your stakeholder needs as well as how they want to consume the information.
2. Materiality assessment: Conduct a materiality assessment to identify the material ESG issues most critical to your organization. Organizations will need to report material risks to internal and external stakeholders.
3. Purpose-driven goals: Your ESG reporting must include metrics to measure performance against your purpose-driven strategy.
4. Regulatory requirements & industry: Work with your compliance and legal teams to understand which reporting requirements apply. Don’t forget requirements under the “S” and “G” components. Some jurisdictions require DEI reporting, and the Securities and Exchange Commission (SEC) in the US recently announced cybersecurity disclosure of board expertise and management oversight practices.

Factor 1: Stakeholder requirements

Work with key stakeholders to determine what to report

Evaluate your stakeholder landscape

Consider each of these areas of the ESG Stakeholder Wheel and identify your stakeholders. Once stakeholders are identified, consider how the ESG factors might be perceived by delving into the ESG factors that matter to each stakeholder and what drives their behavior.

Determine ESG impact on stakeholders

Review materiality assessment frameworks for your industry to surface ESG factors for your segment and stakeholder group(s).

Perform research and analysis of the competition and stakeholder trends, patterns, and behavior

Support your findings with stakeholder interviews.

Stakeholders will prioritize ESG differently. Understanding their commitment is a critical success factor.

Many of your stakeholders care about ESG commitments…

27%: Support for social and environmental proposals at shareholder meetings of US companies rose to 27% in 2020 (up from 21% in 2017).
Source: Sustainable Investments Institute, 2020.

79%: of investors consider ESG risks and opportunities an important factor in investment decision making.
Source: “Global Investor Survey,” PwC, 2021.

...Yet

33%: of survey respondents cited that a lack of attention or support from senior leadership was one of the major barriers preventing their companies from making any progress on ESG issues.
Source: “Consumer Intelligence Survey,” PwC, 2021.

Info-Tech Insight

To succeed with ESG reporting it is essential to understand who we hold ourselves accountable to and to focus ESG efforts in areas with the optimal balance between people, the planet, and profits

Activity 1: Define stakeholders

Input: Internal documentation (e.g. strategy, annual reports), ESG Stakeholder Wheel
Output: List of key stakeholders and applicable ESG factors
Materials: Whiteboard/flip charts, ESG Reporting Workbook
Participants: Chief Sustainability Officer, Chief Compliance Officer, Head of ESG Reporting, Business leaders

2 hours

1. Using the ESG Stakeholder Wheel as a baseline, consider the breadth of your organization’s value chain and write down all your stakeholders.
2. Discuss what drives their behavior. Be as detailed as you can be. For example, if it’s a consumer, delve into their age group and the factors that may drive their behavior.
3. List the ESG factors that may be important to each stakeholder.
4. Write down the communication channels you expect to use to communicate ESG information to this stakeholder group.
5. Rate the priority of this stakeholder to your organization.
6. Record this information in ESG Reporting Workbook.
7. Optional – consider testing the results with a targeted survey.

Download the ESG Reporting Workbook

Activity 1: Example

Factor 2: Materiality assessments

Conduct a materiality assessment to inform company strategy and establish targets and metrics for risk and performance reporting

The concept of materiality as it relates to ESG is the process of gaining different perspectives on ESG issues and risks that may have significant impact (both positive and negative) on or relevance to company performance.

The objective of a materiality assessment is to identify material ESG issues most critical to your organization by looking at a broad range of social and environmental factors. Its purpose is to narrow strategic focus and enable an organization to assess the impact of financial and non-financial risks aggregately.

It helps to make the case for ESG action and strategy, assess financial impact, get ahead of long-term risks, and inform communication strategies.

Organizations can use assessment tools from Sustainalytics or GRI, SASB Standards, or guidance and benchmarking information from industry associations to help assess ESG risks .

Info-Tech Insight

The materiality assessment informs your risk management approach. Material ESG risks identified should be integrated into your organization’s risk reporting framework.

Supplement your materiality assessment with stakeholder interviews

Steps to determine material ESG factors

Materiality assessment

The materiality assessment is a strategic tool used to help identify, refine, and assess the numerous ESG issues in the context of your organization.

There is no universally accepted approach to materiality assessments. Although the concept of materiality is often embedded within a reporting standard, your approach to conducting the materiality assessment does not need to link to a specific reporting standard. Rather, it can be used as a baseline to develop your own.

To arrive at the appropriate outcome for your organization, careful consideration is needed to tailor the materiality assessment to meet your organization’s objectives.

When defining the scope of your materiality assessment consider:

• Your corporate ESG purpose and sustainability strategy
• Your audience and what drives their behavior
• The relevance of the ESG issues to your organization. Do they impact strategy? Increase risk?
• The boundaries of your materiality assessment (e.g. regions or business departments, supply chains it will cover)
• Whether you want to assess from a double materiality perspective

Consider your stakeholders and your industry when selecting your materiality assessment tool – this will ensure you provide relevant disclosure information to the stakeholders that need it.

Double materiality is an extension of the financial concept of materiality and considers the broader impact of an organization on the world at large – particularly to people and climate.

Prioritize and categorize

Using internal information (e.g. strategy, surveys) and external information (e.g. competitors, industry best practices), create a longlist of ESG issues.

Discuss and narrow down the list. Be sure to consider opportunities – not just material risks!

Group the issues under ESG components or defined strategic goals for your organization. Another option is to use the UN’s Sustainable Development Goals to categorize.

Differentiate ESG factors that you already measure and report.

The benefit of clustering is that it shows related topics and how they may positively or negatively influence one another.

Internal risk disclosure should not be overlooked

Bank of America estimates ESG disputes have cost S&P companies more than $600 billion in market capitalization in the last seven years alone.

ESG risks are good predictors of future risks and are therefore key inputs to ensure long-term corporate success.

Regardless of the size of your organization, it’s important to build resilience against ESG risks.

To protect an organization against an ESG incident and potential liability risk, ESG risks should be treated like any other risk type and incorporated into risk management and internal reporting practices, including climate scenario analysis.

Some regulated entities will be required to meet climate-related financial disclosure expectations, and sound risk management practices will be prescribed through regulatory guidance. However, all organizations should instill sound risk practices.

ESG risk management done right will help protect against ESG mishaps that can be expensive and damaging while demonstrating commitment to stakeholders that have influence over all corporate performance.

Source: GreenBiz, 2022.

IT has a role to play to provide the underlying data and technology to support good risk decisions.

Visualize your material risks

Leverage industry frameworks or use Info-Tech’s materiality map to visualize your material ESG risks.

Activity 2: Materiality assessment

Input: ESG corporate purpose or any current ESG metrics; Customer satisfaction or employee engagement surveys; Materiality assessment tools from SASB, Sustainalytics, GRI, or industry frameworks; Outputs from stakeholder outreach/surveys
Output: Materiality map, a list of material ESG issues
Materials: Whiteboard/flip charts, ESG Reporting Workbook
Participants: Chief Sustainability Officer, Chief Compliance Officer, Head of ESG Reporting, Business leaders, Participants from marketing and communications

2-3 hour

1. Begin by reviewing various materiality assessment frameworks to agree on a baseline framework. This will help to narrow down a list of topics that are relevant to your company and industry.
2. As a group, discuss the potential impact and start listing material issues. At first the list will be long, but the group will work collectively to prioritize and consolidate the list.
3. Begin to combine and categorize the results by aligning them to your ESG purpose and strategic pillars.
4. Treat each ESG issue as a risk and map against the likelihood and impact of the risk.
5. Map the topics on your materiality map. Most of the materiality assessment tools have materiality maps – you may choose to use their map.
6. Record this information in the ESG Reporting Workbook.

Download the ESG Reporting Workbook

Case Study: Novartis

• INDUSTRY: Pharmaceuticals
• SOURCE: Novartis, 2022

Novartis, a leading global healthcare company based in Switzerland, stands out as a leader in providing medical consultancy services to address the evolving needs of patients worldwide. As such, its purpose is to use science and technologically innovative solutions to address some of society’s most debilitating, challenging, and ethically significant healthcare issues.

The application of Novartis’ materiality assessment process in understanding critical ESG topics important to their shareholders, stakeholder groups, and society at large enables the company to better quantify references to its ESG sustainability metrics.

Novartis applies its materiality assessment process to better understand relevant issues affecting its underlying business operations across its entire value chain. Overall, employing Novartis’s materiality assessment process helps the company to better manage its societal, environmental, and economic impacts, thus engaging in more socially responsible governance practices.

Novartis’ materiality assessment is a multitiered process that includes three major elements:

1. Identifying key stakeholders, which involves a holistic analysis of internal colleagues and external stakeholders.
2. Collecting quantitative feedback and asking relevant stakeholders to rank a set of issues (e.g. climate change governance, workplace culture, occupational health and safety) and rate how well Novartis performs across each of those identified issues.
3. Eliciting qualitative insights by coordinating interviews and workshops with survey participants to better understand why the issues brought up during survey sessions were perceived as important.

Results

In 2021, Novartis had completed its most recent materiality assessment. From this engagement, both internal and external stakeholders had ranked as important eight clusters that Novartis is impacting on from an economic, societal, and environmental standpoint. The top four clusters were patient health and safety, access to healthcare, innovation, and ethical business practices.

Factor 3: ESG program goals

Incorporate ESG performance metrics that support your ESG strategy

Another benefit of the materiality assessment is that it helps to make the case for ESG action and provides key information for developing a purpose-led strategy.

An internal ESG strategy should drive toward company-specific goals such as green-house gas emission targets, use of carbon neutral technologies, focus on reusable products, or investment in DEI programs.

Most organizations focus on incremental goals of reducing negative impacts to existing operations or improving the value to existing stakeholders rather than transformative goals.

Yet, a strategy that is authentic and aligned with key stakeholders and long-term goals will bring sustainable value.

The strategy must be supported by an accountability and performance measurement framework such as SMART metrics.

A fulsome reporting strategy should include performance metrics

Activity 3: SMART metrics

Input: ESG corporate purpose or any current ESG metrics, Outputs from activities 1 and 2, Internally defined metrics (i.e. risk metrics or internal reporting requirements)
Output: SMART metrics
Materials: Whiteboard/flip charts, ESG Reporting Workbook
Participants: Chief Sustainability Officer, Chief Compliance Officer, Chief Risk officer/Risk leaders, Head of ESG Reporting, Business leaders, Participants from marketing and communications

1-2 hours

1. Document a list of appropriate metrics to assess the success of your ESG program.
2. Use the sample metrics listed in the table on the next slide as a starting point.
3. Fill in the chart to indicate the:
   1. Name of the success metric
   2. Method for measuring success
   3. Baseline measurement
   4. Target measurement
   5. Actual measurements at various points throughout the process of improving the risk management program
   6. A deadline for each metric to meet the target measurement
4. Record this information in the ESG Reporting Workbook.

Download the ESG Reporting Workbook

Sample ESG metrics

Leverage industry resources to help define applicable metrics

Environmental

• Greenhouse gas emissions – total corporate
• Carbon footprint – percent emitted and trend
• Percentage of air and water pollution
• Renewable energy share per facility
• Percentage of recycled material in a product
• Ratio of energy saved to actual use
• Waste creation by weight
• Circular transition indicators

Social

• Rates of injury
• Lost time incident rate
• Proportion of spend on local suppliers
• Entry-level wage vs. local minimum wage
• Percentage of management who identify with specific identity groups (i.e. gender and ethnic diversity)
• Percentage of suppliers screened for accordance to ESG vs. total number of suppliers
• Consumer responsiveness

Governance

• Annual CEO compensation compared to median
• Percentage of employees trained in conflict-of-interest policy
• Number of data breaches using personally identifiable information (PII)
• Number of incidents relating to management corruption
• Percentage of risks with mitigation plans in place

Activity 3: Develop SMART project metrics

1-3 hours

Attach metrics to your goals to gauge the success of the ESG program.

Sample Metrics

Factor 4: Regulatory reporting obligations

Identify your reporting obligations

High-level overview of reporting requirements:

Refer to your legal and compliance team for the most up-to-date and comprehensive requirements.

The focus of regulators is to move to mandatory reporting of material climate-related financial information.

There is some alignment to the TCFD* framework, but there is a lack of standardization in terms of scope across jurisdictions.
*TCFD is the Task Force on Climate-Related Financial Disclosures.

Activity 4: Regulatory obligations

Input: Corporate strategy documents; Compliance registry or internal governance, risk, and compliance (GRC) tool
Output: A list of regulatory obligations
Materials: Whiteboard/flip charts, ESG Reporting Workbook
Participants: Chief Sustainability Officer, Chief Compliance Officer, Chief Legal Officer, Head of ESG Reporting, Business leaders

1-2 hours

1. Begin by listing the jurisdictions in which you operate or plan to operate.
2. For each jurisdiction, list any known current or future regulatory requirements. Consider all ESG components.
3. Log whether the requirements are mandatory or voluntary and the deadline to report.
4. Write any details about reporting framework; for example, if a reporting framework such as TCFD is prescribed.
5. Record this information in the ESG Reporting Workbook.

Download the ESG Reporting Workbook

1.2 Assess impact and weigh options

Once the scope of your ESG reporting framework has been identified, further assessment is needed to determine program direction and to understand and respond to organizational impact.

Key factors for further assessment and decisions include

1. Reporting framework options. Consider mandated reporting frameworks and any industry standards when deciding your baseline reporting framework. Strive to have a common reporting methodology that serves all your reporting needs: regulatory, corporate, shareholders, risk reporting, etc.
2. Perform gap analysis. The gap analysis will reveal areas where data may need to be sourced or where tools or external assistance may be needed to help deliver your reporting strategy.
3. Organizational impact and readiness. The gap analysis will help to determine whether your current operating model can support the reporting program or whether additional resources, tools, or infrastructure will be needed.

1.2.1 Decide on baseline reporting framework

1. Determine the appropriate reporting framework for your organization

Reporting standards are available to enable relevant, high-quality, and comparable information. It’s the job of the reporting entity to decide on the most suitable framework for their organization.

The most established standard for sustainability reporting is the Global Reporting Initiative (GRI), which has supported sustainability reporting for over 20 years.

The Task Force on Climate-Related Financial Disclosures (TCFD) was created by the Financial Stability Board to align ESG disclosure with financial reporting. Many global regulators support this framework.

The International Sustainability Standards Board (ISSB) is developing high-quality, understandable, and enforceable global standards using the Sustainability Accounting Standards Board (SASB) as a baseline. It is good practice to use SASB Standards until the ISSB standards are available.

2. Decide which rating agencies you will use and why they are important

ESG ratings are provided by third-party agencies and are increasingly being used for financing and transparency to investors. ESG ratings provide both qualitative and quantitative information.

However, there are multiple providers, so organizations need to consider which ones are the most important and how many they want to use.

Some of the most popular rating agencies include Sustainalytics, MSCI, Bloomberg, Moody's, S&P Global, and CDP.

Reference Appendix Below

1.2.2 Determine data gaps

The ESG reporting mandate is built on the assumption of consistent, good-quality data

To meet ESG objectives, corporations are challenged with collecting non-financial data from across functional business and geographical locations and from their supplier base and supply chains.

One of the biggest impediments to ESG implementation is the lack of high-quality data and of mature processes and tools to support data collection.

An important step for delivering reporting requirements is to perform a gap analysis early on to surface gaps in the primary data needed to deliver your reporting strategy.

The output of this exercise will also inform and help prioritize implementation, as it may show that new data sets need to be sourced or tools purchased to collect and aggregate data.

Conduct a gap analysis to determine gaps in primary data

Activity 5: Gap analysis

Input: Business (ESG) strategy, Data inventory (if exists), Output from Activity 1: Key stakeholders, Output from Activity 2: Materiality map, Output of Activity 3: SMART metrics, Output of Activity 4: Regulatory obligations
Output: List of high-priority data gaps
Materials: Whiteboard/flip charts, ESG Reporting Workbook
Participants: Chief Sustainability Officer, Chief Compliance Officer, Chief Legal Officer, Head of ESG Reporting, Business leaders, Data analysts

1-3 hours

1. Using the outputs from activities 1-4, list your organization’s ESG issues in order of priority. You may choose to develop your priority list by stakeholder group or by material risks.
2. List any defined SMART metric from Activity 3.
3. Evaluate data availability and quality of the data (if existing) as well as any impediments to sourcing the data.
4. Make note if this is a common datapoint, i.e. would you disclose this data in more than one report?
5. Record this information in the ESG Reporting Workbook.

Download the ESG Reporting Workbook

1.3 Take a holistic implementation approach

Currently, 84 percent of businesses don’t integrate their ESG performance with financial and risk management reporting.

Source: “2023 Canadian ESG Reporting Insights,” PwC.

When implementing an ESG reporting framework, it is important not to implement in silos but to take a strategic approach that considers the evolving nature of ESG and the link to value creation and sound decision making.

Key implementation considerations include

1. Setting clear metrics and targets. Key performance indicators (KPIs) and key risk indicators (KRIs) are used to measure ESG factor performance. It’s essential that they are relevant and are constructed using high-quality data. Your performance metrics should be continually assessed and adapted as your ESG program evolves.
2. Data challenges. Without good-quality data it is impossible to accurately measure ESG performance, generate actionable insights on ESG performance and risk, and provide informative metrics to investors and other stakeholders. Design your data model to be flexible and digital where possible to enable data interoperability.
3. Architectural approach. IT will play a key role in the design of your reporting framework, including the decision on whether to build, buy, or deliver a hybrid solution. Every organization will build their reporting program to suit their unique needs; however, taking a holistic and proactive approach will support and sustain your strategy long term.

1.3.1 Metrics and targets for climate-related disclosure

“The future of sustainability reporting is digital – and tagged.”
Source: “XBRL Is Coming,” Novisto, 2022.

In the last few years, global regulators have proposed or effected legislation requiring public companies to disclose climate-related information.

Yet according to Info-Tech’s 2023 Trends and Priorities survey, most IT professionals expect to support environmental mandates but are not prepared to accurately report on their organization’s carbon footprint.

IT groups have a critical role to play in helping organizations develop strategic plans to meet ESG goals, measure performance, monitor risks, and deliver on disclosure requirements.

To future-proof your reporting structure, your data should be readable by humans and machines.

eXtensible Business Reporting Language (XBRL) tagging is mandated in several jurisdictions for financial reporting, and several reporting frameworks are adopting XBRL for sustainability reporting so that non-financial and financial disclosure frameworks are aligned.

Example environmental metrics

• Amount of scope 1, 2, or 3 GHG emissions
• Total energy consumption
• Total water consumption
• Progress toward net zero emission
• Percentage of recycled material in a product

1.3.1 Metrics and targets for social disclosure

“59% of businesses only talk about their positive performance, missing opportunities to build trust with stakeholders through balanced and verifiable ESG reporting.”
Source: “2023 Canadian ESG Reporting Insights,” PwC.

To date, regulatory focus has been on climate-related disclosure, although we are beginning to see signals in Europe and the UK that they are turning their attention to social issues.

Social reporting focuses on the socioeconomic impacts of an organization’s initiatives or activities on society (indirect or direct).

The “social” component of ESG can be the most difficult to quantify, but if left unmonitored it can leave your organization open to litigation from consumers, employees, and activists.

Although organizations have been disclosing mandated metrics such as occupational health and safety and non-mandated activities such as community involvement for years, the scope of reporting is typically narrow and hard to measure in financial terms.

This is now changing with the recognition by companies of the value of social reporting to brand image, traceability, and overall corporate performance.

Example social metrics

• Rate of injury
• Lost time incident rate
• Proportion of spend on local suppliers
• Entry-level wage versus local minimum wage
• Percentage of management within specific identity groups (i.e. gender and ethnic diversity)
• Number of workers impacted by discrimination

Case Study: McDonald’s Corporation (MCD)

• INDUSTRY: Food service retailer
• SOURCE: RBC Capital Markets, 2021; McDonald’s, 2019

McDonald’s Corporation is the leading global food service retailer. Its purpose is not only providing burgers to dinner tables around the world but also serving its communities, customers, crew, farmers, franchisees, and suppliers alike. As such, not only is the company committed to having a positive impact on communities and in maintaining the growth and success of the McDonald's system, but it is also committed to conducting its business operations in a way that is mindful of its ESG commitments.

McDonald’s Better Together: Gender Balance & Diversity strategy and Women in Tech initiative

In 2019, MCD launched its Better Together: Gender Balance & Diversity strategy as part of a commitment to improving the representation and visibility of women at all levels of the corporate structure by 2023.

In conjunction with the Better Together strategy, MCD piloted a “Women in Tech” initiative through its education and tuition assistance program, Archways to Opportunity. The initiative enabled women from company-owned restaurants and participating franchisee restaurants to learn skills in areas such as data science, cybersecurity, artificial intelligence. MCD partnered with Microsoft and Colorado Technical University to carry out the initiative (McDonald’s, 2019).

Both initiatives directly correlate to the “S” of the ESG framework, as the benefits of gender-diverse leadership continue to be paramount in assessing the core strengths of a company’s overreaching ESG portfolio. Hence, public companies will continue to face pressure from investors to act in accordance with these social initiatives.

Results

MCD’s Better Together and Women in Tech programs ultimately helped improve recruitment and retention rates among its female employee base. After the initialization of the gender balance and diversification strategy, McDonald’s signed on to the UN Women’s Empowerment Principles to help accelerate global efforts in addressing the gender disparity problem.

1.3.1 Metrics and targets for governance disclosure

Do not lose sight of regulatory requirements

Strong governance is foundational element of a ESG program, yet governance reporting is nascent and is often embedded in umbrella legislation pertaining to a particular risk factor.

A good example of this is the recent proposal by the Securities and Exchange Commission in the US (CFR Parts 229, 232, 239, 240, and 249, Cybersecurity Risk Management, Strategy, Governance, and Incident Disclosure), which will require public companies to:

• Disclosure of board oversight of cyber risk.
• Disclose management’s role in managing and accessing cybersecurity-related risks.

The "G” component includes more than traditional governance factors and acts as a catch-all for other important ESG factors such as fraud, cybersecurity, and data hygiene. Make sure you understand how risk may manifest in your organization and put safeguards in place.

Example governance metrics

• Annual CEO compensation compared to median
• Percentage of employees trained in conflict-of-interest policy
• Completed number of supplier assessments
• Number of data breaches using PII
• Number of material cybersecurity breaches

Info-Tech Insight

The "G" in ESG may not be capturing the limelight under ESG legislation yet, but there are key governance factors that are that are under regulatory radar, including data, cybersecurity, fraud, and DEI. Be sure you stay on top of these issues and include performance metrics into your internal and external reporting frameworks.

1.3.2 Conquering data management challenges

Due to the nascent nature of climate-related reporting, data challenges such as the availability, usability, comparability, and workflow integration surface early in the ESG program journey when sourcing and organizing data:

• It is challenging to collect non-financial data across functional business and geographical locations and from supplier base and supply chains.
• The lack of common standards leads to comparability challenges, hindering confidence in the outputs.

In addition to good, reliable inputs, organizations need to have the infrastructure to access new data sets and convert raw data into actionable insights.

The establishment of data model and workflow processes to track data lineage is essential to support an ESG program. To be successful, it is critical that flexibility, scalability, and transparency exist in the architectural design. Data architecture must scale to capture rapidly growing volumes of unstructured raw data with the associated file formats.

Download Info-Tech’s Create and Manage Enterprise Data Models blueprint

1.3.3 Reporting architecture

CIOs play an important part in formulating the agenda and discourse surrounding baseline ESG reporting initiatives

Building and operating an ESG program requires the execution of a large number of complex tasks.

IT leaders have an important role to play in selecting the right technology approach to support a long-term strategy that will sustain and grow corporate performance.

The decision to buy a vendor solution or build capabilities in-house will largely depend on your organization’s ESG ambitions and the maturity of in-house business and IT capabilities.

For large, heavily regulated entities an integrated platform for ESG reporting can provide organizations with improved risk management and internal controls.

Example considerations when deciding to meet ESG reporting obligations in-house

• Size and type of organization
• Extent of regulatory requirements and scrutiny
• The amount of data you want to report
• Current maturity of data architecture, particularly your ability to scale
• Current maturity of your risk and control program – how easy is it to enhance current processes?
• The availability and quality of primary data
• Data set gaps
• In-house expertise in data, model risk, and change management
• Current operating model – is it siloed or integrated?
• Implementation time
• Program cost
• The availability of vendor solutions that may address gaps

Info-Tech Insight

Executive leadership should take a more holistic and proactive stance to not only accurately reporting upon baseline corporate financial metrics but also capturing and disclosing relevant ESG performance metrics to drive alternative streams of valuation across their respective organizational environments.

Activity 6: High-level implementation considerations

Input: Business (ESG) strategy, Data inventory (if exists), Asset inventory (if exists), Output from Activity 5
Output: Summary of high-level implementation considerations
Materials: Whiteboard/flip charts, ESG Reporting Workbook
Participants: Chief Sustainability Officer, Head of ESG Reporting, Business leaders, Data analysts, Data and IT architect/leaders,

2-3 hours

1. Review the implementation considerations on the previous slide to help determine the appropriate technology approach.
2. For each implementation consideration, describe the current state.
3. Discuss and draft the implications of reaching the desired future state by listing implications and organizational gaps.
4. Discuss as a group if there is an obvious implementation approach.
5. At this point, further analysis may be needed. Form a subcommittee or assign a leader to conduct further analysis.
6. Record this information in the ESG Reporting Workbook.

Download the ESG Reporting Workbook

1.3.4 Ensure your implementation team has a high degree of trust and communication

If external partners are needed, dedicate an internal resource to managing the vendor and partner relationships.

Communication: Teams must have some type of communication strategy. This can be broken into:

• Regularity: Having a set time each day to communicate progress and a set day to conduct retrospectives.
• Ceremonies: Injecting awards and continually emphasizing delivery of value to encourage relationship building and constructive motivation.
• Escalation: Voicing any concerns and having someone responsible for addressing those concerns.

Proximity: Distributed teams create complexity as communication can break down. This can be mitigated by:

• Location: Placing teams in proximity to close the barrier of geographical distance and time zone differences.
• Inclusion: Making a deliberate attempt to pull remote team members into discussions and ceremonies.
• Communication tools: Having the right technology (e.g. videoconference) to help bring teams closer together virtually.

Trust: Members should trust other members are contributing to the project and completing their required tasks on time. Trust can be developed and maintained by:

• Accountability: Having frequent quality reviews and feedback sessions. As work becomes more transparent, people become more accountable.
• Role clarity: Having a clear definition of what everyone’s role is.

1.4 Clear effective communication

Improving investor transparency is one of the key drivers behind disclosure, so making the data easy to find and consumable is essential

Your communication of ESG performance is intricately linked to corporate value creation. When designing your communications strategy, consider:

• Your message – make it authentic and tell a consistent story.
• How data will be used to support the narrative.
• How your ESG program may impact internal and external programs and build a communication strategy that is fit for purpose. Example programs are:
  • Employee recruitment
  • New product rollout
  • New customer campaign
• The design of the communication and how well it suits the audience. Communications may take the form of campaigns, thought leadership, infographics, etc.
• The appropriateness of communication channels to your various audiences and the messages you want to convey. For example, social media, direct outreach, shareholder circular, etc.

1.5 Continually evaluate

A recent BDC survey of 121 large companies and public-sector buyers found that 82% require some disclosure from their suppliers on ESG, and that's expected to grow to 92% by 2024.
Source: BDC, 2023

ESG's link to corporate performance means that organizations must stay on top of ESG issues that may impact the long-term sustainability of their business.

ESG components will continue to evolve, and as they do so will stakeholder views. It is important to continually survey your stakeholders to ensure you are optimally managing ESG risks and opportunities.

To keep ESG on the strategy agenda, we recommend that organizations:

• Appoint a chief sustainability officer (CSO) with a seat on executive leadership committees.
• Embed ESG into existing governance and form a tactical ESG working group committee.
• Ensure ESG risks are integrated into the enterprise risk management program.
• Continually challenge your ESG strategy.
• Regularly review risks and opportunities through proactive outreach to stakeholders.

Download The ESG Imperative and Its Impact on Organizations

Phase 2

Streamline Requirements and Tool Selection

This phase will walk you through the following activities:

• Assess technology and tooling opportunities.
• Prepare ESG reporting implementation plan.
• Write ESG reporting presentation document.

This phase involves the following participants: CIO, CCO, CSO, EA, IT application and data leaders, procurement, business leaders, marketing and communications, head of ESG reporting, and any dedicated ESG team members

2.1 Streamline your requirements and tool section

Spend the time up front to enable success and meet expectations

Before sourcing any technology, it’s important to have a good understanding of your requirements.

Key elements to consider:

1. ESG reporting scope. Large enterprises will have more complex workflow requirements, but they also will have larger teams to potentially manage in-house. Smaller organizations will need easy-to-use, low-cost solutions.
2. Industry and value chain. Look for industry-specific solutions, as they will be more tailored to your needs and will enable you to be up and running quicker.
3. Coverage. Ensure the tool has adequate regulatory coverage to meet your current and future needs.
4. Gap in functionality. Be clear on the problem you are trying to solve and/or the gap in workflow. Refer to the reporting lifecycle and be clear on your needs before sourcing technology.
5. Resourcing. Factor in capacity during and after implementation and negotiate the appropriate support.

Industry perspective

The importance of ESG is something that will need to be considered for most, if not every decision in the future, and having reliable and available information is essential. While the industry will continue to see investment and innovation that drives operational efficiency and productivity, we will also see strong ESG themes in these emerging technologies to ensure they support both sustainable and socially responsible operations.

With the breadth of technology Datamine already has addressing the ESG needs for the mining industry combined with our new technology, our customers can make effective and timely decisions through incorporating ESG data into their planning and scheduling activities to meet customer demands, while staying within the confines of their chosen ESG targets.

Chris Parry
VP of ESG, Datamine

Activity 7: Brainstorm tooling options

Use the technology feature list below to identify areas along the ESG workflow where automated tools or third-party solutions may create efficiencies

2.2 Vendors tools and technologies to support ESG reporting

In a recent survey of over 1,000 global public- and private-sector leaders, 87% said they see AI as a helpful tool to fight climate change.
Source: Boston Consulting Group

Technology providers are part of the solution and can be leveraged to collect, analyze, disclose, track, and report on the vast amount of data.

Increasingly organizations are using artificial intelligence to build climate resiliency:

• AI is useful for the predictive modelling of potential climate events due to its ability to gather and analyze and synthesize large complete data sets.

And protect organizations from vulnerabilities:

• AI can be used to identify and assess vulnerabilities that may lead to business disruption or risks in production or the supply chain.

2.3 ESG reporting software selection

What Is ESG Reporting Software?

Our definition: ESG reporting software helps organizations improve the transparency and accountability of their ESG program and track, measure, and report their sustainability efforts.

Key considerations for reporting software selection:

• While there are boutique ESG vendors in the market, organizations with existing GRC tools may first want to discuss ESG coverage with their existing vendor as it will enable better integration.
• Ensure that the vendors you are evaluating support the requirements and regulations in your region, industry, and geography. Regulation is moving quickly – functionality needs to be available now and not just on the roadmap.
• Determine the level of software integration support you need before meeting with vendors and ensure they will be able to provide it – when you need it!

Adoption of ESG reporting software has historically been low, but these tools will become critical as organizations strive to meet increasing ESG reporting requirements.

In a recent ESG planning and performance survey conducted by ESG SaaS company Diligent Corporation, it was found that over half of all organizations surveyed do not publish ESG metrics of any kind, and only 9% of participants are actively using software that supports ESG data collection, analysis, and reporting.

Source: Diligent, 2021.

2.3.1 Elicit and prioritize granular requirements for your ESG reporting software

Understanding business needs through requirements gathering is the key to defining everything about what is being purchased. However, it is an area where people often make critical mistakes.

Download Info-Tech's Improve Requirements Gathering blueprint

2.3.1 Identify critical and nice-to-have features

Central Data Repository: Collection of stored data from existing databases merged into one location that can then be shared, analyzed, or updated.

Automatic Data Collection: Ability to automate data flows, collect responses from multiple sources at specified intervals, and check them against acceptance criteria.

Automatic KPI Calculations, Conversions, and Updates: Company-specific metrics can be automatically calculated, converted, and tracked.

Built-In Indicator Catalogs and Benchmarking: Provides common recognized frameworks or can integrate a catalog of ESG indicators.

Custom Reporting: Ability to create reports on company emissions, energy, and asset data in company-branded templates.

User-Based Access and Permissions: Ability to control access to specific content or data sets based on the end user’s roles.

Real-Time Capabilities: Ability to analyze and visualize data as soon as it becomes available in underlying systems.

Version Control: Tracking of document versions with each iteration of document changes.

Intelligent Alerts and Notifications: Ability to create, manage, send, and receive notifications, enhancing efficiency and productivity.

Audit Trail: View all previous activity including any recent edits and user access.

Encrypted File Storage and Transfer: Ability to encrypt a file before transmitting it over the network to hide content from being viewed or extracted.

Activity 7: Technology and tooling options

Input: Business (ESG) strategy, Data inventory (if exists), Asset inventory (if exists), Output from Activity 5, Output from Activity 6,
Output: List of tooling options
Materials: Whiteboard/flip charts, ESG Reporting Workbook
Participants: Chief Sustainability Officer, Head of ESG Reporting, Business leaders, Data analysts, Data and IT architect/leaders

1-2 hours

1. Begin by listing key requirements and features for your ESG reporting program.
2. Use the outputs from activities 5 and 6 and the technology feature list on the previous slide to help brainstorm technology and tooling options.
3. Discuss the availability and readiness of each option. Note that regulatory requirements will have an effective date that will impact the time to market for introducing new tooling.
4. Discuss and assign a priority.
5. At this point, further analysis may be needed. Form a subcommittee or assign a leader to conduct further analysis.
6. Record this information in the ESG Reporting Workbook.

Download the ESG Reporting Workbook

Activity 8: Implementation plan

Input: Business (ESG) strategy, Output from Activity 5, Output from Activity 6, Output from Activity 7
Output: ESG Reporting Implementation Plan
Materials: Whiteboard/flip charts, ESG Reporting Implementation Plan Template
Participants: Chief Sustainability Officer, Head of ESG Reporting, Business leaders, Data analysts, PMO, Data and IT architect/leaders

1-2 hours

1. Use the outputs from activities 5 to 7 and list required implementation tasks. Set a priority for each task.
2. Assign the accountable owner as well as the group responsible. Larger organizations and large, complex change programs will have a group of owners.
3. Track any dependencies and ensure the project timeline aligns.
4. Add status as well as start and end dates.
5. Complete in the ESG Reporting Implementation Plan Template.

Download the ESG Reporting Implementation Plan Template

Activity 9: Internal communication

Input: Business (ESG) strategy, ESG Reporting Workbook, ESG reporting implementation plan
Output: ESG Reporting Presentation Template
Materials: Whiteboard/flip charts, ESG Reporting Presentation Template, Internal communication templates
Participants: Chief Sustainability Officer, Head of Marketing/ Communications, Business leaders, PMO

1-2 hours

Since a purpose-driven ESG program presents a significant change in how organizations operate, the goals and intentions need to be understood throughout the organization. Once you have developed your ESG reporting strategy it is important that it is communicated, understood, and accepted. Use the ESG Reporting Presentation Template as a guide to deliver your story.

1. Consider your audience and discuss and agree on the key elements you want to convey.
2. Prepare the presentation.
3. Test the presentation with smaller group before communicating to senior leadership/board

Download the ESG Reporting Presentation Template

Phase 3

Select ESG Reporting Software

This phase will provide additional material on Info-Tech’s expertise in the following areas:

• Info-Tech’s approach to RFPs
• Info-Tech tools for software selection
• Example ESG software assessments

3.1 Leverage Info-Tech’s expertise

Develop an inclusive and thorough approach to the RFP process

The Info-Tech difference:

1. The secret to managing an RFP is to make it as manageable and as thorough as possible. The RFP process should be like any other aspect of business – with a standard process in place, you are better able to handle whatever comes your way, because you know the steps you need to follow to produce a top-notch RFP.
2. The business then identifies the need for more information about a product/service or determines that a purchase is required.
3. A team of stakeholders from each area impacted gather all business, technical, legal, and risk requirements. What are the expectations of the vendor relationship post-RFP? How will the vendors be evaluated?
4. Based on predetermined requirements, either an RFI or an RFP is issued to vendors with a due date.

Info-Tech Insight

Review Info-Tech’s process and understand how you can prevent your organization from leaking negotiation leverage while preventing vendors from taking control of your RFP.

Software Selection Engagement

5 Advisory Calls Over a 5-Week Period to Accelerate Your Selection Process

Expert Analyst Guidance over5 weeks on average to select and negotiate software.

Save Money, Align Stakeholders, Speed Up the Process & make better decisions.

Use a Repeatable, Formal Methodology to improve your application selection process.

Better, Faster Results, guaranteed, included in membership.

CLICK HERE to Book Your Selection Engagement

Leverage the Contract Review Service to level the playing field with your shortlisted vendors

You may be faced with multiple products, services, master service agreements, licensing models, service agreements, and more.

Use the Contract Review Service to gain insights on your agreements.

Consider the aspects of a contract review:

1. Are all key terms included?
2. Are they applicable to your business?
3. Can you trust that results will be delivered?
4. What questions should you be asking from an IT perspective?

Validate that a contract meets IT’s and the business’ needs by looking beyond the legal terminology. Use a practical set of questions, rules, and guidance to improve your value for dollar spent.

Click here to book The Contract Review Service

Download blueprint Master Contract Review and Negotiation for Software Agreements

3.2 Vendor spotlight assessments

See above for a vendor landscape overview of key ESG reporting software providers

The purpose of this section is to showcase various vendors and companies that provide software solutions to help users manage and prioritize their ESG reporting initiatives.

This section showcases the core capabilities of each software platform to provide Info-Tech members with industry insights regarding some of the key service providers that operate within the ESG vendor market landscape.

Info-Tech members who are concerned with risks stemming from the inability to sort and disseminate unstructured ESG data reporting metrics or interested in learning more about software offerings that can help automate the data collection, processing, and management of ESG metrics will find high-level insights into the ESG vendor market space.

Vendor spotlight

The establishment of the Datamine ESG unit comes at the same time the mining sector is showing an increased interest in managing ESG and its component systems as part of a single scope.

With miners collecting and dealing with ever-increasing quantities of data and looking for ways to leverage it to make data-driven decisions that enhance risk management and increase profitability, integrated software solutions are – now more than ever – essential in supporting continuous improvement and maintaining data fidelity and data integrity across the entire mining value chain.

Key Features:

• Discover GIS for geochemical, water, erosion, and vegetation modelling and management.
• Qmed for workforce health management, COVID testing, and vaccine administration.
• MineMarket and Reconcilor for traceability and auditing, giving visibility to chain of custody and governance across the value chain, from resource modelling to shipping and sales.
• Centric Mining Systems – intelligence software for real-time transparency and governance across multiple sites and systems, including key ESG performance indicator reporting.
• Zyght – a leading health, safety, and environment solution for high-impact industries that specializes in environment, injury, risk management, safe work plans, document management, compliance, and reporting.
• Isystain – a cloud-based platform uniquely designed to support health, safety & environment, sustainability reporting, compliance and governance, and social investment reporting. Designed for seamless integration within an organization’s existing software ecosystems providing powerful analytics and reporting capabilities to streamline the production of sustainability and performance reporting.

Vendor spotlight

Benchmark ESG provides industry-leading ESG data management and reporting software that can assist organizations in managing operational risk and compliance, sustainability, product stewardship, and ensuring responsible sourcing across complex global operations.

Key Features:

• Benchmark ESG™ Analytics by Tableau provides multidimensional analytics and interactive visualization displays to help easily share insights and intelligence for more careful interpretation of ESG reporting metrics.
• Benchmark provides support for Scope 1, 2, and 3 emissions calculation and tracking capabilities.
• Benchmark is a CDP-accredited solutions provider. Thus, the platform strongly aligns itself with mainstream ESG reporting frameworks.

Vendor spotlight

PwC’s ESG Management Solution provides quick insights into ways to improve reporting transparency surrounding your organization’s ESG commitments.

According to PwC’s most recent CEO survey, the number one motivator for CEOs in mitigating climate change risks is their own desire to help solve this global problem and drive transparency with stakeholders.
Source: “Annual Global CEO Survey,” PwC, 2022.

Key Features:

• Streamlined data mining capabilities. PwC’s ESG solution provides the means to streamline, automate, and standardize the input of sustainability data based on non-financial reporting directive (NFRD) and corporate sustainability reporting directive (CSRD) regulations.
• Company and product carbon footprint calculation and verification modules.
• Robust dashboarding capabilities. Option to create custom-tailored sustainability monitoring dashboards or integrate existing ESG data from an application to existing dashboards.
• Team management functionalities that allow for more accessible cross-departmental communication and collaboration. Ability to check progress on tasks, assign tasks, set automatic notifications/deadlines, etc.

Vendor spotlight

ServiceNow ESG Management (ESGM) and reporting platform helps organizations transform the way they manage, visualize, and report on issues across the ESG spectrum.

The platform automates the data collection process and the organization and storage of information in an easy-to-use system. ServiceNow’s ESGM solution also develops dashboards and reports for internal user groups and ensures that external disclosure reports are aligned with mainstream ESG standards and frameworks.

We know that doing well as a business is about more than profits. One workflow at a time, we believe we can change the world – to be more sustainable, equitable, and ethical.
Source: ServiceNow, 2021.

Key Features:

1. An executive dashboard to help coherently outline the status of various ESG indicators, including material topics, goals, and disclosure policies all in one centralized hub
2. Status review modules. Ensure that your organization has built-in modules to help them better document and monitor their ESG goals and targets using a single source of truth.
3. Automated disclosure modules. ESGM helps organizations create more descriptive ESG disclosure reports that align with industry accountability standards (e.g. SASB, GRI, CDP).

Other key vendors to consider

Related Info-Tech Research

Definitions

Reporting and standard frameworks

Bibliography

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"2023 Canadian ESG Reporting Insights." PwC, Nov. 2022. Accessed Dec. 2022.

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Bizo, Daniel. "Multi-Tenant Datacenters and Sustainability: Ambitions and Reality." S&P Market Intelligence, Sept. 2020. Web.

Bolden, Kyle. "Aligning nonfinancial reporting with your ESG strategy to communicate long-term value." EY, 18 Dec. 2020. Web.

Carril, Christopher, et al. "Looking at Restaurants Through an ESG Lens: ESG Stratify – Equity Research Report." RBC Capital Markets, 5 Jan. 2021. Accessed Jun. 2022.

"Celebrating and Advancing Women." McDonald’s, 8 March 2019. Web.

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Courtnell, Jane. “ESG Reporting Framework, Standards, and Requirements.” Corporate Compliance Insights, Sept. 2022. Accessed Dec. 2022.

“Country Sustainability Ranking. Country Sustainability: Visibly Harmed by Covid-19.” Robeco, Oct. 2021. Accessed June 2022.

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“Digital Assets: Laying ESG Foundations.” Global Digital Finance, Nov. 2021. Accessed April 2022.

“Dow Jones Sustainability Indices (DJCI) Index Family.” S&P Global Intelligence, n.d. Accessed June 2022.

"ESG in Your Business: The Edge You Need to Land Large Contracts." BDC, March 2023, Accessed April 2023.

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“ESG Use Cases. IoT – Real-Time Occupancy Monitoring.” Metrikus, March 2021. Accessed April 2022.

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Flynn, Hillary, et al. “A guide to ESG materiality assessments.” Wellington Management, June 2022, Accessed September 2022

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Martini, A. “Socially Responsible Investing: From the Ethical Origins to the Sustainable Development Framework of the European Union.” Environment, Development and Sustainability, vol. 23, Nov. 2021. Web.

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Vaughan-Smith, Gary. “Navigating ESG data sets and ‘scores’.” Silverstreet Capital, 23 March 2022. Accessed Dec. 2022.

Waters, Lorraine. “ESG is not an environmental issue, it’s a data one.” The Stack, 20 May 2021. Web.

Wells, Todd. “Why ESG, and Why Now? New Data Reveals How Companies Can Meet ESG Demands – And Innovate Supply Chain Management.” Diginomica, April 2022. Accessed July 2022.

“XBRL is coming to corporate sustainability Reporting.” Novisto, Aug. 2022. Accessed Dec. 2022.

Research Contributors and Experts

Chris Parry
VP of ESG, Datamine

Chris Parry has recently been appointed as the VP of ESG at Datamine Software. Datamine’s dedicated ESG division provides specialized ESG technology for sustainability management by supporting key business processes necessary to drive sustainable outcomes.

Chris has 15 years of experience building and developing business for enterprise applications and solutions in both domestic and international markets.

Chris has a true passion for business-led sustainable development and is focused on helping organizations achieve their sustainable business outcomes through business transformation and digital software solutions.

Datamine’s comprehensive ESG capability supports ESG issues such as the environment, occupational health and safety, and medical health and wellbeing. The tool assists with risk management, stakeholder management and business intelligence.

z/Series Modernization and Migration

The biggest migration is yet to come.

Executive Summary

Info-Tech Insight

“A number of market conditions have coalesced in a way that is increasingly driving existing mainframe customers to consider running their application workloads on alternative platforms. In 2020, the World Economic Forum noted that 42% of core skills required to perform existing jobs are expected to change by 2022, and that more than 1 billion workers need to be reskilled by 2030.” – Dale Vecchio

Review

We help IT leaders make the most of their z/Series environment

Analyst Perspective

Good Luck.

Modernize the mainframe … here we go again. Prior to 2020, most organizations were muddling around in “year eleven of the four-year plan” to exit the mainframe platform where a medium-term commitment to the platform existed. Since 2020, it appears the appetite for the mainframe platform changed. Again. Discussions mostly seem to be about what the options are beyond hardware outsourcing or re-platforming to “cloud” migration of workloads – mostly planning and strategy topics. A word of caution: it would appear unwise to stand in front of the exit door for fear of being trampled. Hardware expirations between now and 2025 are motivating hosting deployments. Others are in migration activities, and some have already decommissioned and migrated but now are trying to rehab the operations team now lacking direction and/or structure. There is little doubt that modernization and “digital transformation” trends will drive more exit traffic, so IT leaders who are still under pressure to get off the platform need to assess their options and decide. Being in a state of perpetually planning to get off the mainframe handcuffs your ability to invest in the mainframe, address deficiencies, and improve cost-effectiveness.

Darin Stahl Principal Research Advisor, Infrastructure & Operations Research Info-Tech Research Group

The mainframe “fidget spinner”

Thinking of modernizing your mainframe can cause you angst so grab a fidget spinner and relax because we have you covered!

External Business Pressures:

• Digital transformation
• Modernization programs
• Compliance and regulations
• TCO

Internal Considerations:

• Reinvest
• Migrate to a new platform
• Evaluate public and vendor cloud alternatives
• Hosting versus infrastructure outsourcing

Info-Tech Insight

With multiple control points to be addressed, care must be taken to simplify your options while addressing all concerns to ease operational load.

The analyst call review

“Who has Darin talked with?” – Troy Cheeseman

Scale out versus scale up

Consider your resourcing

Understand your options

Migrate

Having perpetual plans to migrate handcuffs your ability to invest in your mainframe, extend its value, and improve cost effectiveness.

Hosting

Using a hosting provider is typically more cost-effective than running your mainframe in-house.

Potential for reduced costs

• Hosting enables you to reduce or eliminate your mainframe staff.
• Economies of scale enable hosting providers to reduce software licensing costs. They also have more buying power to negotiate better terms.
• Power and cooling costs are also transferred to the hosting provider.

Reliable infrastructure and experienced staff

• A quality hosting provider will have 24/7 monitoring, full redundancy, and proven disaster recovery capabilities.
• The hosting provider will also have a larger mainframe staff, so they don’t have the same risk of suddenly being without those advanced critical skills.

So, what are the risks?

• A transition to a hosting provider usually means eliminating or significantly reducing your in-house mainframe staff. With that loss of in-house expertise, it will be next to impossible to bring the mainframe back in-house, and you become highly dependent on your hosting provider.

Outsourcing

Re-platform – z/Series COBOL Cloud

Re-platforming is not trivial.

Re-platform – z/Series (Non-COBOL)

But what if it's not COBOL?

Reinvest

By contrast, reducing the use of your mainframe makes it less cost-effective and more challenging to retain in-house expertise.

• For organizations that have migrated applications off the mainframe (at least partly to reduce dependency on the platform), inevitably there remains a core set of mission critical applications that cannot be moved off for reasons described on the “Migrate” slide. This is when the mainframe becomes a costly burden:
  • TCO is relatively high due to low utilization.
  • In-house expertise declines as workload declines and current staffing allocations become harder to justify.
• Organizations that are instead adding capacity and finding new ways to use this platform have lower cost concerns and resourcing challenges. The charts below illustrate this correlation. While some capacity growth is due to normal business growth, some is also due to new workloads, and it reflects an ongoing commitment to the platform.

*92% of organizations that added capacity said TCO is lower than for commodity servers (compared to 50% of those who did not add capacity)	*63% of organizations that added capacity said finding resources is not very difficult (compared to 42% of those who did not add capacity)

*Maximize the Value of IBM Mainframes in My Business

An important thought about data migration

Mainframe data migrations – “VSAM, IMS, etc.”

Enterprise class job scheduling

Job scheduling or data center automation?

• Enterprise class job scheduling solutions enable complex unattended batched programmatically conditioned task/job scheduling.
• Data center automation (DCIM) software automates and orchestrates the processes and workflow for infrastructure operations including provisioning, configuring, patching of physical, virtual, and cloud servers, and monitoring of tasks involved in maintaining the operations of a data center or Infrastructure environment.
• While there maybe some overlap and or confusion between data center automation and enterprise class job scheduling solutions, data center automation (DCIM) software solutions are least likely to have support for non-commodity server platforms and lack robust scheduling functionality.

Note: Enterprise job scheduling is a topic with low member interest or demand. Since our published research is driven by members’ interest and needs, the lack of activity or member demand would obviously be a significant influence into our ability to aggregate shared member insight, trends, or best practices in our published agenda.

Data Center Automation (DCIM) Software

Orchestration/Provisioning Software

Enterprise class job scheduling features

The feature set for these tools is long and comprehensive. The feature list below is not exhaustive as specific tools may have additional product capabilities. At a minimum, the solutions offered by the vendors in the list below will have the following capabilities:

Understand your vendors and tools

List and compare the job scheduling features of each vendor.

• This is not presented as an exhaustive list.
• The list relies on observations aggregated from analyst engagements with Info-Tech Research Group members. Those member discussions tend to be heavily tilted toward solutions supporting non-commodity platforms.
• Nothing is implied about a solution suitability or capability by the order of presentation or inclusion or absence in this list.

Info-Tech Insight

Creating vendor profiles will help quickly filter the solution providers that directly meet your z/Series needs.

Advanced Systems Concepts

ActiveBatch

*Advanced Systems Concepts, Inc.

BMC

Control-M

*BMC

Broadcom

Atomic Automation

Autosys Workload Automation

*Broadcom

HCL

Workload Automation

*HCL Software

Fortra

JAMS Scheduler

*JAMS

Redwood

Redwood SaaS

*Redwood

Fortra

Robot Scheduler

*Fortra

SMA Technologies

OpCon

*SMA Technologies

StoneBranch

Universal Automation Center (UAC)

*Stonebranch

Tidal Software

Workload Automation

*Tidal

Vinzant Software

Global ECS

*Vizant Software

Activity

Scale Out or Scale Up

Activities:

1. Complete the Scale Up vs. Scale Out TCO Tool.
2. Compare total lifecycle costs to determine TCO.

This activity involves the following participants:

IT strategic direction decision makers

IT managers responsible for an existing z/Series platform

Organizations evaluating platforms for mission critical applications

Outcomes of this step:

• Completed Scale Up vs. Scale Out TCO Tool

Info-Tech Insight

This checkpoint process creates transparency around agreement costs with the business and gives the business an opportunity to re-evaluate its requirements for a potentially leaner agreement.

Scale out versus scale up activity

The Scale Up vs. Scale Out TCO Tool provides organizations with a framework for estimating the costs associated with purchasing and licensing for a scale-up and scale-out environment over a multi-year period. Use this tool to: Compare the pre-populated values. Insert your own amounts to contrast possible database decisions and determine the TCO of each.
Info-Tech Insight Watch out for inaccurate financial information. Ensure that the financials for cost match your maintenance and contract terms.	Use the Scale Up vs. Scale Out TCO Tool to determine your TCO options.

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Improve your RFPs to gain leverage and get better results.

Research Authors

Darin Stahl, Principal Research Advisor, Info-Tech Research Group Darin is a Principal Research Advisor within the Infrastructure Practice, and leveraging 38+ years of experience, his areas of focus include: IT Operations Management, Service Desk, Infrastructure Outsourcing, Managed Services, Cloud Infrastructure, DRP/BCP, Printer Management, Managed Print Services, Application Performance Monitoring/ APM, Managed FTP, non-commodity servers (z/Series, mainframe, IBM i, AIX, Power PC).

Troy Cheeseman, Practice Lead, Info-Tech Research Group Troy has over 25 years of IT management experience and has championed large enterprise-wide technology transformation programs, remote/home office collaboration and remote work strategies, BCP, IT DRP, IT Operations and expense management programs, international right placement initiatives, and large technology transformation initiatives (M&A). Additionally, he has deep experience working with IT solution providers and technology (cloud) start-ups.

Bibliography

“AWS Announces AWS Mainframe Modernization.” Business Wire, 30 Nov. 2021.
de Valence, Phil. “Migrating a Mainframe to AWS in 5 Steps with Astadia?” AWS, 23 Mar. 2018.
Graham, Nyela. “New study shows mainframes still popular despite the rise of cloud—though times are changing…fast?” WatersTechnology, 12 Sept. 2022.
“Legacy applications can be revitalized with API.” MuleSoft, 2022.
Vecchio, Dale. “The Benefits of Running Mainframe Applications on LzLabs Software Defined Mainframe® & Microsoft Azure.” LzLabs Sites, Mar. 2021.

Build a Better Manager

Support IT success with a solid management foundation.

Analyst Perspective

Training that delivers results.

Ninety-eight percent of managers say they need more training, but 93% of managers already receive some level of manager training. Unfortunately, the training typically provided, although copious, is not working. More of the same will never get you better outcomes. How many times have you sat through training that was so long, you had no hope of implementing half of it? How many times have you been taught best practices, with zero guidance on how to apply them? To truly support our managers, we need to rethink manager training. Move from fulfilling an HR mandate to providing truly trainee-centric instruction. Teach only the right skills – no fluff – and encourage and enable their application in the day to day.

Jane Kouptsova Research Director, People & Leadership Info-Tech Research Group

Executive Summary

Info-Tech Insight

When it comes to manager training, more is not more. Attending training is not equal to being trained. Even good information is useless when it doesn’t get applied. If your role hasn’t required you to use your training within 48 hours, you were not trained on the most relevant skills.

Effective managers drive effective departments by engaging their teams

Engaged teams are: 52% more willing to innovate* 70% more likely to be at the organization a year from now** 57% more likely to exceed their role’s expectations** Engaged teams are driven by managers: 70% of team-level engagement is accounted for by managers***

*McLean & Company; N=3,395; **McLean & Company; N=5,902; ***Gallup, 2018

Despite the criticality of their role, IT organizations are failing at supporting new managers

87% of middle managers wish they had more training when they were first promoted

98% of managers say they need more training

Source: Grovo, 2016

IT must take notice:

IT as an industry tends to promote staff on the basis of technical skill. As a result, new managers find themselves suddenly out of their comfort zone, tasked with leading teams using management skills they have not been trained in and, more often than not, having to learn on the job. This is further complicated because many new IT managers must go from a position of team member to leader, which can be a very complex transition.

The truth is, many organizations do try and provide some degree of manager training, it just is not effective

*Grovo, 2016; **Chief Executive, 2016

Info-Tech’s Management & Governance Diagnostic, N=337 CIOs

There are three key reasons why manager training fails

1. Information Overload

Seventy-five percent of managers report that their training was too long to remember or to apply in their day to day (Grovo, 2016). Trying to cover too much useful information results in overwhelm and does not deliver on key training objectives.

2. Limited Implementation

Thirty-three percent of managers find that their training had insufficient follow-up to help them apply it on the job (Grovo, 2016). Learning is only the beginning. The real results are obtained when learning is followed by practice, which turns new knowledge into reliable habits.

3. Lack of departmental alignment

Implementing training without a clear link to departmental and organizational objectives leaves you unable to clearly communicate its value, undermines your ability to secure buy-in from attendees and executives, and leaves you unable to verify that the training is actually improving departmental effectiveness.

Overcome those common training pitfalls with tactical solutions

This research combats common training challenges by focusing on building habits, not just learning ideas

Info-Tech Insight

When it comes to manager training, stop thinking about learning, and start thinking about practice. In difficult situations, we fall back on habits, not theoretical knowledge. If a manager is only as good as their habits, we need to support them in translating knowledge into practice.

This research focuses on building good management habits to drive enterprise success

Set up your first-time managers for success by leveraging Info-Tech’s training to focus on three key areas of management:

• Managing people as a team
• Managing people as individuals
• Managing yourself as a developing leader

Each of these areas:

• Is immediately important for a first-time manager
• Includes practical, tactical skills that can be implemented quickly
• Translates to departmental and organizational benefits

Info-Tech Insight

There is no such thing as “effective management training.” Various topics will be effective at different times for different roles. Delivering only the highest-impact learning at strategic points in your leadership development program will ensure the learning is retained and translates to results.

This blueprint covers foundational training in three key domains of effective management

Effective Managers

• Self
  • Conflict & Difficult Conversations
  • Your Role in the Organization
  • Your Role in Decisions
• Team
  • Communication
  • Feedback & Coaching
  • Performance Management
• People
  • Master Time
  • Delegate
  • Accountability

Each topic corresponds to a module, which can be used individually or as a series in any order.

Choose topics that resonate with your managers and relate directly to their day-to-day tasks. Training on topics that may be useful in the future, while interesting, is less likely to generate lasting skill development.

Info-Tech Best Practice

This blueprint is not a replacement for formal leadership or management certification. It is designed as a practical, tactical, and foundational introduction to key management capabilities.

Info-Tech’s training tools guide participants through successful skill building

Measure the effectiveness of your manager training with outcomes-focused metrics

Linking manager training with measurable outcomes allows you to verify that the program is achieving the intended benefits, course correct as needed, and secure buy-in from stakeholders and participants by articulating and documenting value.

Use the metrics suggested below to monitor your training program’s effectiveness at three key stages:

Info-Tech offers various levels of support to best suit your needs

Diagnostics and consistent frameworks used throughout all four options

Guided Implementation

What does a typical GI on this topic look like?

A Guided Implementation (GI) is a series

of calls with an Info-Tech analyst to help implement our best practices in your organization.

A typical GI is 1 to 3 calls over the course of several months, depending on training schedule.

Workshop Overview

Contact your account representative for more information.
workshops@infotech.com 1-888-670-8889

Pool of topics:

• Master Time
• Accountability
• Your Role in the Organization
• Your Role in Decision Making
• Manage Conflict Constructively
• Effective Communication
• Performance Management
• Coaching & Feedback

Phase 1

Prepare to facilitate training

Outcomes of this phase:

• Training facilitation deck customized to organizational norms
• Training workbook distributed to participants
• Training dates and facilitator finalized

1.1 Select training modules

1-3 hours

1. Review the module descriptions on the following slides.
2. Identify modules that will address managers’ most pressing development needs.
   To help make this decision, consult the following:
   • Trainees’ development plans
   • Trainees’ supervisors

Effective Communication

Effective communication is the cornerstone of good management

Effective communication can make or break your IT team’s effectiveness and engagement and a manager’s reputation in the organization. Effective stakeholder management and communication has a myriad of benefits – yet this is a key area where IT leaders continue to struggle.

There are multiple ways in which you communicate with your staff. The tactics you will learn in this section will help you to:

1. Understand communication styles. Every staff member has a predisposition in terms of how they give, receive, and digest information. To drive effective communication new managers need to understand the profiles of each of their team members and adjust their communicate style to suit.
2. Understand what your team members want communicated to them and how. Communication is highly personal, and a good manager needs to clearly understand what their team wants to be informed about, their desired interactions, and when they need to be involved in decision making. They also must determine the appropriate channels for communication exchanges.
3. Make meetings matter. Many new managers never receive training on what differentiates a good and bad meeting. Effective meetings have a myriad of benefits, but more often than not meetings are ineffective, wasting both the participants’ and organizer’s time. This training will help you to ensure that every team meeting drives a solid outcome and gets results.

Benefits:

• Better buy-in, understanding, and communication.
• Improved IT reputation with the organization.
• Improved team engagement.
• Improved stakeholder satisfaction.
• Better-quality decision making.
• Improved transparency, trust, and credibility.
• Less waste and rework.
• Greater ability to secure support and execute the agenda.
• More effective cooperation on activities, better quality information, and greater value from stakeholder input.
• Better understanding of IT performance and contribution.

Effective Communication

Effective manager communication has a direct impact on employee engagement

35% Of organizations say they have lost an employee due to poor internal communication (project.co, 2021).

59% Of business leaders lose work time to mistakes caused by poor communication (Grammarly, 2022).

$1.2 trillion Lost to US organizations as a result of poor communication (Grammarly, 2022).

Effective Communication

Effective communication is crucial to all parts of the business

Effective Communication

The Communicate Effectively Facilitation Guide covers the following topics:

• Understand Communication Styles
• Tailor Communication Methods to Activities
• Make Meetings Matter

Learning outcomes:

Main goal: Become a better communicator across a variety of personal styles and work contexts.

Key objectives:

• Reaffirm why effective communication matters.
• Work with people with different communication styles.
• Communicate clearly and effectively within a team.
• Make meetings more effective.

Info-Tech Insight

First-time IT managers face specific communication challenges that come with managing people for the first time: learning to communicate a greater variety of information to different kinds of people, in a variety of venues. Tailored training in these areas helps managers focus and fast-track critical skill development.

Performance Management

Meaningful performance measures drive employee engagement, which in turn drives business success

Meaningful performance measures help employees understand the rationale behind business decisions, help managers guide their staff, and clarify expectations for employees. These factors are all strong predictors of team engagement:

Performance Management

Clear performance measures benefit employees and the organization

Performance Management

The Performance Management Facilitation Guide covers the following topics:

• Develop Meaningful Goals
• Set Meaningful Metrics

Learning outcomes:

Main goal: Become proficient in setting, tracking, and communicating around performance management goals.

Key objectives:

• Understand the role of managers and employees in the performance management process.
• Learn to set SMART, business-aligned goals for your team.
• Learn to help employees set useful individual goals.
• Learn to set meaningful, holistic metrics to track goal progression.
• Understand the relationship between goals, metrics, and feedback.

Info-Tech Insight

Goal and metric development holds special significance for first-time IT managers because it now impacts not only their personal performance, but that of their employees and their team collectively. Training on these topics with a practical team- and employee-development approach is a focused way to build these skills.

Coaching & Feedback

Coaching and feedback are effective methods to influence employees and drive business outcomes

1. Administrative Sciences, 2022

2. International Review of Management and Marketing, 2020

3. Current Psychology, 2021

4. Quantum Workplace, 2021

5. Issues and Perspectives in Business and Social Sciences, 2022

6. Sustainability, 2021

Coaching & Feedback

The Coaching & Feedback Facilitation Guide covers the following topics:

• The 4 A’s of Coaching
• Effective Feedback

Learning outcomes:

Main goal: Get prepared to coach and offer feedback to your staff as appropriate.

Key objectives:

• Understand the difference between coaching and feedback and when to apply each one.
• Learn the importance of a coaching mindset.
• Learn effective coaching via the 4 A’s framework.
• Understand the actions that make up feedback and the factors that make it successful.
• Learn to deal with resistance to feedback.

Info-Tech Insight

First-time managers often shy away from giving coaching and feedback, stalling their team’s performance. A focused and practical approach to building these skills equips new managers with the tools and confidence to tackle these challenges as soon as they arise.

Your Role in the Organization

IT managers who understand the business context provide more value to the organization

Managers who don’t understand the business cannot effect positive change. The greater understanding that IT managers have of business context, the more value they provide to the organization as seen by the positive relationship between IT’s understanding of business needs and the business’ perception of IT value.

Source: Info-Tech Research Group

Your Role in the Organization

Knowing your stakeholders is key to understanding your role in the business and providing value to the organization

To understand your role in the business, you need to know who your stakeholders are and what value you and your team provide to the organization. Knowing how you help each stakeholder meet their wants needs and goals means that you have the know-how to balance experience and outcome-based behaviors. This is the key to being an attentive leader.

The tactics you will learn in this section will help you to:

1. Know your stakeholders. There are five key stakeholders the majority of IT managers have: management, peers, direct reports, internal users, and external users or customers. Managers need to understand the goals, needs, and wants of each of these groups to successfully provide value to the organization.
2. Understand the value you provide to each stakeholder. Stakeholder relationship management requires IT managers to exhibit drive and support behaviors based on the situation. By knowing how you drive and support each stakeholder, you understand how you provide value to the organization and support its mission, vision, and values.
3. Communicate the value your team provides to the organization to your team. Employees need to understand the impact of their work. As an IT manager, you are responsible for communicating how your team provides value to the organization. Mission statements on how you provide value to each stakeholder is an easy way to clearly communicate purpose to your team.

Benefits:

• Faster and higher growth.
• Improved team engagement.
• Improved stakeholder satisfaction.
• Better quality decision making.
• More innovation and motivation to complete goals and tasks.
• Greater ability to secure support and execute on goals and tasks.
• More effective cooperation on activities, better quality information, and greater value from stakeholder input.
• Better understanding of IT performance and contribution.

Your Role in the Organization

The Your Role in the Organization Facilitation Guide covers the following topics:

• Know Your Stakeholders
• Understand the Value You Provide to the Organization
• Develop Learnings Into Habits

Learning outcomes:

Main goal: Understand how your role and the role of your team serves the business.

Key objectives:

• Learn who your stakeholders are.
• Understand how you drive and support different stakeholder relationships.
• Relate your team’s tasks back to the mission, vision, and values of the organization.
• Create a mission statement for each stakeholder to bring back to your team.

Info-Tech Insight

Before training first-time IT managers, take some time as the facilitator to review how you will serve the wants and needs of those you are training and your stakeholders in the organization.

Decision Making

Bad decisions have tangible costs, so managers must be trained in how to make effective decisions

To understand your role in the decision-making process, you need to know what is expected of you and you must understand what goes into making a good decision. The majority of managers report they have no trouble making decisions and that they are good decision makers, but the statistics say otherwise. This ease at decision making is due to being overly confident in their expertise and an inability to recognize their own ignorance.1

The tactics you will learn in this section will help you to:

1. Effectively communicate decisions. Often, first-time managers are either sharing their decision recommendations with their manager or they are communicating a decision down to their team. Managers need to understand how to have these conversations so their recommendations provide value to management and top-down decisions are successfully implemented.
2. Provide valuable feedback on decisions. Evaluating decisions is just as critical as making decisions. If decisions aren’t reviewed, there is no data or feedback to discover why a decision was a success or failure. Having a plan in place before the decision is made facilitates the decision review process and makes it easier to provide valuable feedback.
3. Avoid common decision-making mistakes. Heuristics and bias are common decision pitfalls even senior leaders are susceptible to. By learning what the common decision-making mistakes are and being able to recognize them when they appear in their decision-making process, first-time managers can improve their decision-making ability.

20% Of respondents say their organizations excel at decision making (McKinsey, 2018).

87% “Diverse teams are 87% better at making decisions” (Upskillist, 2022).

86% of employees in leadership positions blame the lack of collaboration as the top reason for workplace failures (Upskillist, 2022).

Decision Making

A decision-making process is imperative, even though most managers don’t have a formal one

1. Identify the Problem and Define Objectives
2. Establish Decision Criteria
3. Generate and Evaluate Alternatives
4. Select an Alternative and Implement
5. Evaluate the Decision

Managers tend to rely on their own intuition which is often colored by heuristics and biases. By using a formal decision-making process, these pitfalls of intuition can be mitigated or avoided. This leads to better decisions.

First-time managers are able to apply this framework when making decision recommendations to management to increase their likelihood of success, and having a process will improve their decisions throughout their career and the financial returns correlated with them.

Decision Making

Recognizing personal heuristics and bias in the decision-making process improves more than just decision results

Employees are able to recognize bias in the workplace, even when management can’t. This affects everything from how involved they are in the decision-making process to their level of effort and productivity in implementing decisions. Without employee support, even good decisions are less likely to have positive results. Employees who perceive bias:

Decision Making

The Decision Making Facilitation Guide covers the following topics:

• Effectively Communicate Decisions
• Provide Valuable Feedback on Decisions
• Avoid Common Decision-Making Mistakes

Learning outcomes:

Main goal: Understand how to successfully perform your role in the decision process.

Key objectives:

• Understand the decision-making process and how to assess decisions.
• Learn how to communicate with your manager regarding your decision recommendations.
• Learn how to effectively communicate decisions to your team.
• Understand how to avoid common decision-making errors.

Info-Tech Insight

Before training a decision-making framework, ensure it is in alignment with how decisions are made in your organization. Alternatively, make sure leadership is on board with making a change.

Manage Conflict Constructively

Enable leaders to resolve conflicts while minimizing costs

If you are successful in your talent acquisition, you likely have a variety of personalities and diverse individuals within your IT organization and in the business, which means that conflict is inevitable. However, conflict does not have to be negative – it can take on many forms. The presence of conflict in an organization can actually be a very positive thing: the ability to freely express opinions and openly debate can lead to better, more strategic decisions being made.

The effect that the conflict is having on individuals and the work environment will determine whether the conflict is positive or counterproductive.

As a new manager you need to know how to manage potential negative outcomes of conflict by managing difficult conversations and understanding how to respond to conflict in the workplace.

The tactics you will learn in this section will help you to:

1. Apply strategies to prepare for and navigate through difficult conversations.
2. Expand your comfort level when handling conflict, and engage in constructive conflict resolution approaches.

Benefits:

• Relieve stress for yourself and your co-workers.
• Save yourself time and energy.
• Positively impact relationships with your employees.
• Improve your team dynamic.
• Remove roadblocks to your work and get things done.
• Save the organization money.
• Improve performance.
• Prevent negative issues from reoccurring.

Manage Conflict Constructively

Addressing difficult conversations is beneficial to you, your people, and the organization

When you face a difficult conversation you…

• Relieve stress on you and your co-workers.
• Save yourself time and energy.
• Positively impact relationships with your employees.
• Improve your team dynamic.
• Remove roadblocks to your work
• Save the organization money.
• Improve performance.
• Prevent negative issues from reoccurring.

40% Of employees who experience conflict report being less motivated as a result (Acas, 2021).

30.6% Of employees report coming off as aggressive when trying to resolve a conflict
(Niagara Institute, 2022).

Manage Conflict Constructively

The Manage Conflict Constructively Facilitation Guide covers the following topics:

• Know Your Ideal Time Mix
• Calendar Diligence
• Effective Delegation
• Limit Interruptions

Learning outcomes:

Main goal: Effectively manage your time and know which tasks are your priority and which tasks to delegate.

Key objectives:

• Understand common reasons for difficult conversations.
• Learn Info-Tech’s six-step process to best to prepare for difficult conversations.
• Follow best practices to approach difficult conversations.
• Learn the five approaches to conflict management.
• Practice conflict management skills.

Info-Tech Insight

Conflict does not have to be negative. The presence of conflict in an organization can actually be a very positive thing: the ability to freely express opinions and openly debate can lead to better, more strategic decisions being made.

Master Time

Effective leaders spend their time in specific ways

Source: Info-Tech, N=85

Master Time

Signs you struggle with time management

Master Time

The Master Time Facilitation Guide covers the following topics:

• Understand Communication Styles
• Tailor Communication Methods to Activities
• Make Meetings Matter

Learning outcomes:

Main goal: Become a better communicator across a variety of personal styles and work contexts.

Key objectives:

• Understand how you spend your time.
• Learn how to use your calendar effectively.
• Understand the actions to take to successfully delegate.
• Learn how to successfully limit interruptions.

Info-Tech Insight

There is a right and wrong way to manage your calendar as a first-time manager and it has nothing to do with your personal preference.

Accountability

Accountability creates organizational and team benefits

Source: Forbes, 2019

Accountability

Accountability increases employee empowerment

Employee empowerment is the number one driver of employee engagement. The extent to which you can hold employees accountable for their own actions and decisions is closely related to how empowered they are and how empowered they feel; accountability and empowerment go hand in hand. To feel empowered, employees must understand what is expected of them, have input into decisions that affect their work, and have the tools they need to demonstrate their talents.

Source: McLean & Company Engagement Database, 2018; N=71,794

Accountability

The Accountability Facilitation Guide covers the following topics:

• Create Clarity and Transparency
• Articulate Expectations and Evaluation
• Help Your Team Remove Roadblocks
• Clearly Introduce Accountability to Your Team

Learning outcomes:

Main goal: Create a personal accountability plan and learn how to hold yourself and your team accountable.

Key objectives:

• Understand why accountability matters.
• Learn how to create clarity and transparency.
• Understand how to successfully hold people accountable through clearly articulating expectations and evaluation.
• Know how to remove roadblocks to accountability for your team.

Info-Tech Insight

Accountability is about focusing on the results of a task, rather than just completing the task. Create team accountability by keeping the team focused on the result and not “doing their jobs.” First-time managers need to clearly communicate expectations and evaluation to successfully develop team accountability.

Use the Build a Better Manager Participant Workbooks to help participants set accountabilities and track their progress

A key feature of this blueprint is built-in guidance on transferring your managers’ new knowledge into practical skills and habits they can fall back on when their job requires it.

The Participant Workbooks, one for each module, are structured around the three key principles of learning transfer to help participants optimally structure their own learning:

• Track your learning. This section guides participants through conducting self-assessments, setting learning goals, recording key insights, and brainstorming relapse-prevention strategies
• Establish your personal commitment. This section helps participants record the actions they personally commit to taking to continually practice their new skills
• Secure organizational support. This section guides participants in recording the steps they will take to seek out support from their supervisor and peers.

Info-Tech Insight

Participants should use this workbook throughout their training and continue to review it for at least three months after. Practical skills take an extended amount of time to solidify, and using the workbook for several months will ensure that participants stay on track with regular practice and check-ins.

Set your trainees up for success by reviewing these training best practices

Info-Tech Insight

Participants should use this workbook throughout their training and continue to review it for at least three months after. Practical skills take an extended amount of time to solidify, and using the workbook for several months will ensure that participants stay on track with regular practice and check-ins.

1.2 Customize the facilitation guides

1-3 hours

Prior to facilitating your first session, ensure you complete the following steps:

1. Read through all the module content, including the speaker’s notes, to familiarize yourself with the material and ensure the tactics presented align with your department’s culture and established best practices.
2. Customize the slides with a pencil icon with information relevant to your organization.
3. Ensure you are comfortable with all material to be presented and are prepared to answer questions. If you require clarification on any of the material, book a call with your Info-Tech analyst for guidance.
4. Ensure you do not delete or heavily customize the self-assessment activities and the activities in the Review and Action Plan section of the module. These activities are structured around a skill building framework and designed to aid your trainees in applying their new knowledge in their day to day. If you have any concerns about activities in these sections, book a call with your Info-Tech analyst for guidance.

1.3 Prepare to deliver training

1-3 hours

Complete these steps in preparation for delivering the training to your first-time managers:

1. Select a facilitator.
   • The right person to facilitate the meeting depends on the dynamics within your department. Having a senior IT leader can lend additional weight to the training best practices but may not be feasible in a large department. In these cases, an HR partner or external third party can be asked to facilitate.
2. Distribute the workbooks to attendees before the first training session.
   • Change the header on the workbook templates to your own organization’s, if desired.
   • Email the workbooks to attendees prior to the first session. There is no pre-work to be completed.

Phase 2

Deliver training

Outcomes of this phase:

• Training delivered
• Development goals set by attendees
• Action plan created by attendees

2.1 Deliver training

3 hours

When you are ready, deliver the training. Ensure you complete all activities and that participants record the outcomes in their workbooks.

Tips for activity facilitation:

• Encourage and support participation from everyone. And be sure no one on the team dismisses anyone’s thoughts or opinions – they present the opportunity for further discussion and deeper insight.
• Debrief after each activity, outlining any lessons learned, action items, and next steps.
• Encourage participants to record all outcomes, key insights, and action plans in their workbooks.

Phase 3

Enable long-term skill development

Outcomes of this phase:

• Attendees reminded of action plan and personal commitment
• Supervisors reminded of the need to support trainees' development

3.1 Email trainees with action steps

0.5 hours

After the training, send an email to attendees thanking them for participating and summarizing key next steps for the group. Use the template below, or write your own:

“Hi team,

I want to thank you personally for attending the Communicate Effectively training module. Our group led some great discussion.

A reminder that the next time you will reconvene as a group will be on [Date] to discuss your progress and challenges to date.

Additionally, your manager is aware and supportive of the training program, so be sure to follow through on the commitments you’ve made to secure the support you need from them to build your new skills.

I am always open for questions if you run into any challenges.

Regards,

[Your name]”

3.2 Secure support from trainees’ supervisors

0.5 hours

An important part of the training is securing organizational support, which includes support from your trainees’ supervisors. After the trainees have committed to some action items to seek support from their supervisors, it is important to express your support for this and remind the supervisors of their role in guiding your first-time managers. Use the template below, or write your own, to remind your trainees’ supervisors of this at the end of training (if you are going through all three modules in a short period of time, you may want to wait until the end of the entire training to send this email):

“Hi team,

We have just completed Info-Tech’s first-time manager training with our new manager team. The trainees will be seeking your support in developing their new skills. This could be in the form of coaching, feedback on their progress, reviewing their development plan, etc.

Supervisor support is a crucial component of skill building, so I hope I can count on all of you to support our new managers in their learning. If you are not sure how to handle these requests, or would like a refresher of the material our trainees covered, please let me know.

I am always open for questions if you run into any challenges.

Regards,

[Your name]”

Contributors

Brad Armstrong, Senior Engineering Manager, Code42 Software I am a pragmatic engineering leader with a deep technical background, now focused on building great teams. I'm energized by difficult, high-impact problems at scale and with the cloud technologies and emerging architectures that we can use to solve them. But it's the power of people and organizations that ultimately lead to our success, and the complex challenge of bringing all that together is the work I find most rewarding.

We thank the expert contributors who chose to keep their contributions anonymous.

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