Against a backdrop of new legal requirements, such as the EU Taxonomy, modern data architecture holds the key to a sustainable supply chain transformation, says Tim Srock, CEO of Lobster
In recent years, companies have been facing growing pressure to implement sustainable business practices transparently and efficiently. This is now expected of data management. The requirements companies must abide by when managing ESG data not only affects internal processes, but impacts the entire supply chain.
The added challenge is that many companies stick to legacy systems, dealing with outdated IT solutions that are cumbersome and costly. These make the collection of sustainability data difficult. Issues, such as different systems, missing interfaces, heterogeneous data formats, and manual processes lead to inconsistencies, significant costs, and inefficiencies. As a result, important key figures – such as Scope 1 to Scope 3 carbon emissions – are not accurate and cannot be displayed transparently.
Against this backdrop, new legal requirements such as the EU Taxonomy or the Corporate Sustainability Reporting Directive (CSRD) are being ushered in. These require comprehensive and standardised data collection to present sustainability performance in an accessible manner.
For companies not well-versed in tracking sustainability performance and relying on legacy systems, this presents a huge problem. Therefore, a solution is required – such as adopting modern data architecture. This integrates all data sources and makes it available in real-time, something that will become of the utmost central importance – not only for in-house processes but also for reporting along the entire supply chain.
Why strive for a modern and collaborative data architecture?
Modern architecture approaches in data management require more than just consolidating information. They provide the foundations for collaborative cooperation between all the parties involved in the supply chain – from internal departments to external partners and suppliers. Only through a neutral network provider that acts as a central hub can heterogeneous data from different systems be unified and made available in real-time. This ensures that companies can make well-founded, data-based decisions, and also proactively manage a sustainable supply chain.
A key consideration here is the development of a clear database that maps all processes – from production, to logistics, to sales. Thanks to state-of-the-art technologies such as no-code integration and automated workflows, companies can modernise their existing systems without losing functionality they are familiar with.
Modern data architecture enables seamless integration of all relevant data sources. It takes legacy systems, ERP and CRM applications, IoT devices, and modern cloud services all into a unified data platform.
An essential component of this architecture is data processing and synchronisation. Automated processes and intelligent interfaces ensure continuous data harmonisation in real-time, which can help react to supply chain disruptions.
In addition, modern data platforms can standardise processes and enable automation. Using no-code solutions, complex business processes – from ordering to quality control – can be digitally mapped and automated. This minimises manual intervention and drastically reduces error rates.
A neutral data exchange via a common platform lets stakeholders benefit from a uniform, reliable data source. These collaborative network solutions are particularly important for recording Scope 3 emissions, which account for a company’s indirect greenhouse gas emissions emitted through its supply chain.
“The first advantage it provides is transparency across all processes”
Strategic advantages
Companies that invest in modern data architectures have significant advantages, and a differentiating edge from their competitors. The first advantage it provides is transparency across all processes – from internal operations to supplier relationships. This unlimited access to centralised data effectively strengthens decision-making and risk management for companies, giving them unparalleled insight.
Companies that embrace this new data architecture also benefit from reduced manual effort. Because automation can complete tedious and time-consuming tasks, employee time is freed up, leading to significant cost savings as well as better employee satisfaction, as they can focus on more business-critical and rewarding tasks. In parallel, this scalable architecture allows businesses to adapt to changing market conditions and events as they happen.
A modern data architecture forms the basis for an effective sustainability strategy. Companies can precisely measure, optimise, and transparently report their environmental impact – a crucial factor in meeting the expectations of investors, customers, and regulatory authorities.
Modern data architecture is more than just technology – it is a decisive competitive factor in a world where ESG and sustainability have become all important. Companies that collaboratively optimise their supply chains and embrace future-proof IT systems set themselves up with solid foundations for a sustainable, efficient, and sustainable future.
Tim Srock, CEO of Lobster
Further reading
This article was first published in Business 4.0