United Nations

The UNDESA Division for Sustainable Development – Providing Leadership on Implementing Sustainable Development

By: Patricia Chaves, Senior Sustainable Development Officer, United Nations Department of Economic and Social Affairs — Division for Sustainable Development

Sustainable development has been of fundamental importance to the international community for over 20 years. Agreements on the implementation of this concept or guiding principle has been reflected in work programmes, United Nationsnational policies, development cooperation frameworks, outcome documents, regional strategies, Secretary-General’s reports and resolutions of the UN General Assembly agreed at various intergovernmental processes and summits of Heads of State and Government under the auspices of the United Nations.

The concept has evolved internationally from the time of the publication of the Brundtland Report in 1987, the UN Conference on Environment and Development (UNCED – Brazil – 1992), to the World Summit on Sustainable Development (WSSD – South Africa – 2002) and the recent UN Conference on Sustainable Development (Rio+20 – Brazil – 2012).

The three dimensions of sustainable development: Economic Growth, Social Equity and Environmental Protection.

Sustainable development benefited from broad based discussions among Member States, civil society, including the private sector, regional organizations and the UN system through the UN Commission on Sustainable Development which offered a platform for engagement and dialogue during the 20 years of its existence (1993 – 2013). The Commission was abolished in September 2013 to be replaced by the High Level Political Forum on Sustainable Development.

During a time of high expectations, hopes, enthusiasm and attentive interest on sustainable development after UNCED, the Division for Sustainable Development (DSD) was established in 1993. It aimed to give operational meaning to the concept of sustainable development by providing leadership in promoting and coordinating the implementation of the sustainable development agenda of the United Nations at the global, regional and national level.

The Division translates its responsibility as the primary UN office in support of intergovernmental sustainable development processes into five core functions:

  1. Support to UN intergovernmental processes on sustainable development;
  2. Analysis and policy development;
  3. Capacity development at the country level;
  4. Inter-agency coordination; and
  5. Knowledge management, communication and outreach.

In addition, the Division houses the Small Islands Developing States (SIDS) Unit mandated to support the implementation of the Mauritius Strategy of Implementation of the Barbados Programme of Action for Small Island Developing States. The Division also extends its work through overseas offices in Republic of Korea, Japan, Colombia, Kenya and Zaragoza, Spain. 

Support for the UN Intergovernmental processes includes preparing all substantive and organizational aspects of meetings of the General Assembly and ECOSOC, the High Level Political Forum on Sustainable Development as well as several processes launched at the Rio+20 Conference considered one of the largest conferences in the history of the United Nations. In particular, the Division is tasked with supporting member states’ deliberations of the open working group on the sustainable development goals, discussions at the intergovernmental committee on sustainable development finance, dialogues on the possible options for the establishment of a technology facilitation mechanism and the preparatory process of the 2014 Third International Conference of Small Island Developing States.

The Division also supports related regional processes and follows Member States’ implementation of commitments on sustainable development since the 1992 Earth Summit.

Through the Division’s analysis and policy development work, it provides an analytical and scientific basis for intergovernmental deliberations on sustainable development. It undertakes assessments of long-term sustainable development challenges, both new and intensifying ones.

The Division supports member states in translating decisions of UN intergovernmental bodies related to sustainable development.

Through its capacity development work, the Division supports member states in translating decisions of UN intergovernmental bodies related to sustainable development, specially agreements reached at Rio+20, into actual policies and actions at the country level. In particular, the Division endeavours to assist member states to develop policies that integrate the three dimensions of sustainable development, i.e. economic growth, social equity and environmental protection. These activities in turn allow the Division to inform intergovernmental bodies on the relevance and impact of normative and analytical efforts at the country level.

Through its interagency coordination responsibilities, the Division mobilizes the UN system and other relevant organizations to support sustainable development strategies. In particular, the Division houses Secretariats for key inter-agency mechanisms namely UN-Water and UN-Energy, and contributes closely to the inter-agency process on Oceans. It also chairs an informal mechanism called the Inter-Agency Consultative Group on SIDS.

Through the Division’s knowledge management, communication and outreach efforts, it aims to support the effective participation of Major Groups or civil society in the UN political processes and its analytical and capacity development work. It also provides wide access to information and knowledge on sustainable development, through its online Sustainable Development Knowledge Platform and social media: http://sustainabledevelopment.un.org/index.html

The Post 2015 Development Agenda
A
new, universal development agenda centered on sustainable development.

At present the Division is concentrating its efforts in supporting the follow up of the intergovernmental processes launched at the United Nations Conference on Sustainable Development (Rio+20 – Brazil – 2012) as enumerated previously. Most of these processes will have a direct bearing in the definition and shaping of a new, universal development agenda centered on sustainable development, known as the Post 2015 Development Agenda. Member States have agreed to launch a process of intergovernmental negotiations on this new development agenda in September 2014 which will last for a year and will culminate in the adoption of the post-2015 development agenda by a summit of Heads of State and Government in September 2015.

The year 2015 will mark an extraordinary moment in history for the international community in which challenging agreements must be reached on (a) a single framework for sustainable development supported by a new set of sustainable development goals as well as (b) on a meaningful legal agreement on climate change. The Millennium Development Goals (MDGs) framework launched in 2000 extended its life until 2015 and thus a new development framework needs to be agreed to continue the important gains achieved in 15 years of the implementation of the MDGs and envision emerging challenges for the next 15 years.

 

Why My Big Jar of Honey is So Small – The What/Who/How Principles of Social Measurement: A Message from the Chair

By Dr. Wanda Lopuch, Ph.D., MDA Associates; Global Sourcing Council Chairperson

Why is my big jar of honey so small? My favorite philosopher and the measurement expert-in-residence Winnie-the-Pooh poses his existential question while patting his soft belly.

Why is our talent development program, which so dramatically improves opportunities for our employees and their families, gained so little acceptance? – a frustrated manager of an innovative program raises concern to her team.

In my January address in The Source, I submitted to the GSC community, that we make 2014 a year to bring evidence-based measurement to the center stage of social responsibility and global citizenship.  That way we can present strong evidence-based business cases for programs that empower communities, or programs that enhance quality of work of employees, or programs that foster innovation among vendors for socially responsible products and services.  We need to develop a measurement framework which will enable us to distinguish between good investment and questionable investment.  I have also argued for balanced score cards, or BSC-like tools for socially responsible initiatives, so as per Winnie-the-Pooh’s mantra we will know where we are going and if we are there yet.

Seemingly simple, yet so little progress has been made in implementing social measurement matrices into the core of business enterprises.  There are reasons for that: when it comes to measurement there are challenging questions to be addressed.  Let’s explore.

In the first week of February, I had an opportunity to participate in the UN General Assembly Open Working Group on Sustainable Development Goals (OWGonSGD).  Any goals come with accountability, and accountability does not exist without measurement.  Measurement of social processes was discussed at the UN OWGonSGD in great detail.  The principles of measurement are universal.  They apply equally to the UN monumental task of setting up Global Sustainable Development Goals for the 21st Century (we will learn more about this task in this edition of The Source), as to global sourcing professionals setting up balanced score cards for their network of global partners and suppliers, or to Winnie-the-Pooh’s measurement question of why is the big jar of honey so small?

During the February 5th UN OWSonSGD meeting,  Professor Gita Sen from DAWN (Development Alternatives with Women for a New Era) brilliantly outlined these universal measurement and accountability principles in a simple 3-question format: WHAT? WHO? and HOW?

  1. WHAT is being measured: evidence-based content.
  2. WHO measures: governance of measurement process.
  3. HOW it is measured: budget and resource allocations.

These seemingly simple questions bring the complexity of social measurement challenges into focus when they are tackled together.

        1.  WHAT – or the content, is the cornerstone of the accountability process. 

My measurement expert-in-residence Winnie-the-Pooh, needs to make decisions regarding WHAT he is to measure:  the size of the honey jar or the amount of honey in the jar, or perhaps the taste and smell of honey – a quality of labor of  Maya-the-Bee and other hard-working laborers. 

The manager of a regional vendor supply chain needs to make a decision if she wants to track the amount of product applications submitted by vendors or a type of a vendor, or the innovative features of submitted products, or perhaps suggested pricing.

The sourcing professional, evaluating performance of a potential partner needs to make a decision if he will track personnel absenteeism or turnover within a partner enterprise, or hourly wages, or level of education, or hours employees are spending on non-project related tasks, such as community work or enhancing education.

        2.  WHO – or the governance of the measurement process. 

I suspect that my measurement expert-in-residence Winnie-the-Pooh may insist on doing the measurement by himself, and using his big tummy as “an objective measurement stick” to measure either the size of the honey jar or the amount of honey in the jar.

A manager of a vendor supply chain needs to make a decision, what data is to be self-reported by vendors and what information she or he is to collect through  internal systems.   Both methods have different “trust levels” and costs associated with such data collection.  The decision regarding: WHO, is strongly connected to the third principle: HOW– or budget.

        3.  HOW – or budgetary allocations required to support accountability goals.

According to Prof. Gita Sen, if there is no budget allocated to support the measurement process, there is no true accountability for goals.  This strong statement resonated with the audience.  I am certain that it also resonates with those who are responsible for the balanced score cards and who understand that setting goals may be half of the battle. Getting a realistic picture of the baseline and progression of the goals, however, takes real time and real resources. Which in budget terms translates into money.

Adopting measurement-based frameworks, such as WHAT/WHO/HOW,  to evaluate the social impact of business enterprises is a natural next step in implementing evidence-based decision-making systems that will enhance business processes in commercial, academia and non-profit enterprises alike.  It will even bring closure to the dilemma of my measurement expert-in-residence: why the big jar of honey is so small.

Implementing such frameworks is neither easy nor straightforward.  But, the progress takes place.  To contribute to that, we encourage you to share your experiences regarding the WHAT, WHO and HOW parts of the equation of measuring social impact.  Contribute your insight with other community members so we can share knowledge, learn from one another and build our skills in implementing measurement based programs.  Please submit your comments to editor@gscouncil.org, we will share your views with the community.

Editor’s Note: Standards Matter

The enduring quality of all endeavors relies, in part, on tangible actions and behaviors. To name a few: the application and adherence to ethics, principles, discipline, inventiveness, meeting unmet needs, positively impacting communities and improving social conditions.

At the GSC, we are dedicated to the advancement of Sustainable and Socially Responsible Sourcing. Through this digital publication as well as our companion media channels – discussion forums, conferences and symposia, web meetings, and social media we are committed to raising the level of knowledge-sharing and debate to effect changes on how sourcing business is done.

Successful socially responsible sourcing necessitates developing a global awareness, acceptance and adoption of standard frameworks for RFP’s, SLA’s and other contractual agreements. How this is adopted regionally and locally will depend on many factors. The reality, however, is incontrovertible. Standards set by third parties that define baseline metrics, ratings, and other measurements for Accountability, Transparency and Performance is a “must-have” in order to create meaningful change for the betterment of communities that is built to last.

Sustaining a meaningful dialogue towards that goal is the objective of The Source. Since its inception this newsletter has begun to amplify ways to define and improve the social role of business. We owe much to our outgoing Editor, Diana d’Ambra, for her stewardship and dedication to this mission.

Going forward The Source team and I will be focused on developing a more robust forum incorporating views from trading partners, policymakers, companies, not-for-profits and vested-businesses. Building social benefits on top of commercial profits requires inclusion, honest and respectful communication, and collaborative problem-solving amongst all stakeholders.

We welcome contributors to this discourse. Please share your insight and opinions at contactGSC@gscouncil.org, or contact me directly at jodeen@gscouncil.org.

JoDeen Urban
Editor In Chief

JoDeen is an independent management consultant working with established companies as well as start-ups on strategy, organizational capability and business model innovation.

Global Sourcing – Impacts on Socio-Economics of Developing Countries

By: Bobby Varanasi, COP, Chairman & CEO, Matryzel Consulting Inc.; Asia Ambassador – International Association of Outsourcing Professionals

Increasing pressure on Boards to defer or reduce capital expenditure, coupled by a lack of internal capabilities is pushing organizations to farm out complex and core services to third-party service providers. Sourcing methods are increasingly incorporating core services as inherent targets for sourcing, with the caveat that service providers need to take on more risks than they are either ready to, or have the experience with. Do such risk-sharing approaches align with national imperatives of provider nations?

Standard fee-for-service based business models are increasingly being seen as low value resulting in the demand that service providers put their “skin-in-the-game” through price entrenchment and ownership for the pass-through impact of such services. This is an inherently fundamental shift in the nature of global sourcing. While it is appreciable that customers are beginning to trust their global service providers more than they have done so before, it is also putting increased responsibility on service providers as they are taking on more business risk than ever. The focus on co-creation of solutions is putting the pressure on providers to transform the view of their businesses.

THE DAYS OF “VALUE-SCALE” HAVE ARRIVED AND ARE HERE TO STAY

While access to skills and talent has been touted for long in the industry, cost arbitrage still held the highest attention and focus in the minds of customers. It looks like the death of the mile-wide inch-deep outsourcing deals. Too many times has scale been touted as the biggest lever for winning in a fiercely competitive marketplace.  Not too much emphasis was placed on depth of capabilities. I think the days of “value-scale” are here now and here to stay. Providers are being forced to create value at the business layer within chosen industry verticals, either through technology or business solutions, and add scale to such value through a concerted spread of such value across industries.

Client organizations are pushing their products and services into new markets. Leveraging local partnerships, typically through sourcing models has become a key route that guarantees a fair amount of success with market penetration. In addition, borderless trading environments within various trading blocks – Asia, Latin America, and Europe – have created the ability of organizations to focus on their consumers’ real needs without having to deploy a one-size-fits-all model.

The underlying technologies that in the hitherto days provided the core support to offering services from a centralized location no longer hold true. The distinction between technology and technology-enabled services is becoming less important than the distinction between “values for end-consumer” vs. “low cost destination for non-core activities”.

Today in order to provide utility-based services it has become critically important for organizations to set up “centers of excellence” that focus either on creating a core competence with services for the entire global marketplace, or for a regional marketplace with localized specificities. These COEs are being created by companies through leveraging local expertise either in form of resources or corporations. Such is the nature of the demand that most developing and emerging nations are being evaluated on their ability to be perceived as “centers of excellence” and not just as nations with the base requirements to conduct business. This trend is true of most large multinationals and mid-sized players who are scouting for local capabilities that are aimed at “creating utility based services” for their end-consumers, regardless of the function or industry they are a part of.

The marketplace always engaged in the mainstay conversation surrounding core and non-core services. Today the tenor of such discussions is changing as there is a trend for companies to locate or distribute services from a utility standpoint, and not just a functional or technological standpoint. Hence companies are bundling back core and non-core so long as such services – in a combined manner – are considered key utility for a segment within a chosen marketplace. In such contexts, destinations and providers need to clearly morph their business models that address client organizations’ needs for bundled service capabilities. Here the distinction is not around technology or business processes, rather it is utility-driven.

One needs to only look at the telecommunications industry in Africa to realize the forward-thinking “utility” approach citizens from various nations have adopted. This goes to show that the continent, though quite behind other continents / nations in terms of the development index, is quite ready to create the value client organizations are looking for, so long as such value includes them as recipients. Nations like India, Philippines, Brazil and Chile have many success stories where ICT and services have enabled a deprived citizenry. Whether it is providing financing for non-muster poor Brazilians, or it is providing poor Indian farmers with technological access to identify which markets to sell their crops to, ICT solutions have been created and deployed because of a socio-economic need.

Along the way commercial imperatives have been addressed successfully as well. One needs to only read CK Prahlad’s thoughts on the large opportunity available at The Bottom of the Pyramid to realize the value that can be co-created via global sourcing when the drivers include “socio-economic needs” consistently. In this context it is heartwarming to note the work Leila Chariyath Janah from Samasource does to promote social sourcing in Africa or what Greg Branish does in offering sourcing services through NISH in the US. Unfortunately we don’t have too many such examples.

The Supply Side Conundrum

At the end of the year 2000 India, Philippines, Czech Republic, Canada and Ireland were the key sourcing destinations. Today, the composition has grown to more than 25 countries. The marketplace today has more choices than the ability to analyze such choices coherently. Brazil, Chile, Nicaragua, Jordan, Egypt, Singapore, Vietnam, Malaysia, Malta, Macedonia, El Salvador, Columbia, Sri Lanka, Barbados, Russia, Pakistan, Costa Rica, China, Jamaica, UAE, Romania, Slovakia, Kenya, Ghana, Mauritius, Uganda, and South Africa are all speaking the same language that only a few countries were hitherto well versed with. I would like to think this is a reflection of a maturing industry where many developing and emerging countries would benefit by creating much needed jobs and providing their economies with significant thrusts to move forward. I am also inclined to think whether the opportunity that these nations – and their industries – perceive is really available for them to tap into.

While the demand for global sourcing has grown at a healthy rate over the past decade, making available over $240 Billion in opportunity, is the nature of the opportunity understood well enough by the supply side? Is the demand side clearly articulating their needs appropriately?

I see a serious “supply clutter” around replicable, highly commoditized and cost-chasing services. With the plethora of location choices that client organizations today have, their expectations have transcended the need to look at a location or region “inclusively” – a term I use loosely here to encompass not just client needs but the needs of the supply companies and locations/ nations. Such lack of inclusivity is perhaps the key reason for the large clutter we see in the marketplace today.

THERE HAS NEVER BEEN A BETTER TIME
TO EMBARK ON CREATING ENABLING ENVIRONMENTS

Given almost zero entry barriers to creating service provider entities, and given the positive view governments are taking of the latent opportunity, there has never been a better time than now for many emerging and developing nations to embark on creating enabling environments that can attract investors and deals, and consequently create thousands of service jobs.

So is this positive view sustainable? Has it helped supply destinations realize their small goals so far? Is the view of the industry still positive? I don’t think so. We are not investing enough in understanding the key drivers of policies, and resultant  industries within these nations. We are also not spending sufficient time in thinking about the economic and social impact that nations desire to create, when they invest in specific industries.

The Socio-Economics Sourcing Playbook

Over recent years American consumers have grown more socially responsible and also reflects the fact that there are significant profits to be made in conjunction with such social imperatives. Similar stories exist across developing nations.

Today’s conversations around the attractiveness of global sourcing locations is largely a one-sided conversation – that of the client. I have been a witness to a host of conversations where clients compare the catalysts available in a developing and forward-looking service-oriented nation with another emerging nation that has a debt-burdened economy and flailing old industries. How reasonable is such a comparison?

It is commonplace for client recommendations to be centered around how a nation should focus on creating a highly qualified workforce when the existing citizenry is suffering from lack of basic jobs. Further these recommendations often touch upon how an emerging nation can benefit from offering high-value services – where the education system was barely sufficient to create a base level workforce.

The moot point of my argument here is the lack of readiness – and whether we see it. Taking expectations of demand and translating them into imperatives cannot be done using a “one-size-fits-all” approach.

In Bridging the Gap

Governments and trade promotion agencies are quite active in the global sourcing space. However, they don’t get the much needed attention they deserve. They have a story to tell – it is compelling, it is real, it has a base in co-creation of value, it incorporates significant flexibility at the highest levels of government, it has an impact that is collective, and it requires a commitment that is mutual.

Most nations have signed the Millennium Development Goals of the UN and are keen on investing in industries that can enhance the quality of life of their citizenry. Industries within such nations have the core responsibility to make it happen. The importance of ICT and its ability to create these positive impacts cannot be underscored enough. Likewise the amount of access global sourcing provides industries and companies cannot be underscored enough either.

It is time for the sourcing industry to rise to the challenge to create socio-economic value for its participants. The days when we only discussed client objective needs to be replaced by a set of collective goals – such inclusivity can only happen with industries that span borders and cultures. The global sourcing industry surely is one such industry where these expectations can be translated into reality.

Trends in IT Outsourcing

By: Jerry Luftman, Ph.D., Executive Director and Professor Global Institute for IT Management
and Barry Derksen, Ph.D. lec. MMC CISA CGEIT, Research Director of the Business & IT Trends Institute

The Society for Information Management (SIM) has been conducting surveys of senior IT executives for over 30 years to help IT and business leaders understand and prepare for important issues and trends. Started in 1980 the SIM survey focused solely on IT in the United States. Since 2010 the survey has been expanded by the lead author (who has been facilitating the survey since 2000) to include Europe, Asia/Australia and Latin America.

The 2013 survey sought the input of senior IT executives representing 1,232 organizations from these target regions. (See Table 1 and Table 2 for participant geographies and industry segments.)

The primary categories of the 2013 survey focused on:

  1. Management Concerns
  2. Application and Technology Investments
  3. IT Budget Allocation
  4. IT Organizational Considerations
  5. IT Outsourcing
  6. Cloud Computing

Generally, the survey reaffirmed that IT leaders globally have long been looking to outsourcing as a vehicle to reduce costs as well as to fill skills gaps (skills gap ranked 4th in the list that keeps IT managers awake at night).

Evaluating outsourcing as a whole, which includes offshoring, nearshoring and consulting of non-internal staff, the allocation of outsourcing in IT budgets has been notably increasing in Europe at 36% (compared to 26% in 2012), remaining static in Latin America at 32% (the same percentage as in 2012) and declining in Asia/Australia now totaling 35% (compared to 48% in 2012) and 20% in the U.S (26% in 2012).

Overall, global sourcing budgets as a percent of IT budget is decreasing. In 2009 the percent of the IT budget for sourcing was 67% as compared to 54.4% in 2013, with a further decline in 2014 projected at 53.5%. The 2013 breakdown by region is Europe: 58%, Asia/Australia: 56%, Latin America: 51%, and the U.S.: 54%.

Globally 58.7% of the IT budget is allocated in-house (non-outsourced) domestic. In the U.S. the figure is 73.2%, with Asia/Australia at 50.3%, Latin America at 53.8% and in Europe 53.4%. (See Figure 1.)

The percent of 2013 IT budgets allocated to offshore outsourcing in Asia/Australia (spending the most) is 10.4% of the IT budget; whereas U.S. and Europe both allocate 5.7% and Latin America allocated 7.7%. Of note, Europe has the highest percent of IT budget allocated to domestic outsourcing (32.2%), and the U.S. has the lowest with 17.2%.

Table 1 – Percentage of Respondents by Geography
Geography Total
United States

493

Europe

406

Asia

93

Latin America

178

Australia

50

 TOTAL

1232


Table 2: Percentage of Respondents by Industry  
Industry Frequency %
Agriculture

13

1.09%

Chemical Industry

29

2.36%

Aerospace / Defense

13

1.09%

Automative

56

4.54%

Business Professional Services

42

3.45%

Consumer Goods

24

2.00%

Construction

27

2.18%

Electronics / Semiconductor

13

1.09%

Education

125

10.16%

Energy

24

2.00%

Financial Services / Insurance

138

11.25%

Food Services

9

0.73%

Government – Federal

36

2.90%

Government -State

36

2.90%

Government – Local

22

1.81%

Government – other (specify)

16

1.27%

Healthcare / Medical

64

5.26%

Hospitality / Travel / Leisure / Tourism

13

1.09%

IT services / Consulting

182

14.88%

Manufacturing

62

5.08%

Media / Entertainment

24

2.00%

Medical Technology / BioMedical

9

0.73%

Mining / Minerals

24

2.00%

Printing / Publishing

13

1.09%

Real Estate

24

2.00%

Not-For-Profit – Public Sector

27

2.18%

Not-For-Profit – Charitable Institution

11

0.91%

Not-For-Profit – Other (specify)

16

1.27%

Retail / Wholesale

40

3.27%

Telecommunications

44

3.63%

Transportation / Distribution

24

2.00%

Utilities

22

1.81%

(other industry = 7 (0.6%)

1225

100.00%


Figure 1 – Allocation of 2013 IT Budget
Allocation of IT Budget Graph Luftman