Monday, November 26, 2012

Critique of Methodology for Buyer’s Guide for ECA and Sustainability Software. Report May Under Represent Strength of Some Vendors for Heavy Emitters.

This fall we updated our Buyer's guide for Enterprise Carbon Accounting and Sustainability Software, our fifth update. For each report we analyze 75+ vendors, profile 25 vendors and name a handful of vendors as ECA Leaders. Our methodology rates vendors in several categories with a strong weight for the number of existing and new customers. We believe in general and especially with this product category that the needed functionality is the same across many industries and the leading vendors will have the largest number of customers.   We utilize press releases, case studies and other sources to determine the number of customers for each vendor. While not always easy, we find our approach practical and valuable.

Our methodology does not take into account differences in deal size or total revenue generated. In our report, vendors with a higher number of customers rank higher, regardless of deal size. Vendors who may have larger deal size but fewer customers rank lower.

A number of vendors have critiqued this methodology saying that it may mislead some companies when shortlisting vendors.  After analysis, we do agree there is potential for this in certain verticals, especially “heavy emitters” or companies in oil and gas, chemical, and energy-related industries. These companies usually need very comprehensive solutions for tracking air emissions, water, and a wide variety of regulatory-based items, for which GHG emissions is only a small one. While the number of deals for heavy emitters is lower, the average deal size is typically higher.

We continue believe that our methodology based on the total number of customers by vendor is the best for the overall market, companies who are very heavy emitters of carbon emissions should also consider EHS vendors with strong sustainability solutions. For heavy emitters, we are impressed with the sustainability solutions from IHS, Enviance, Enablon, and SAP.

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