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Dual Materiality for a Global Energy Leader: Efficiency and Regulatory Compliance with AWS and Avvale

While they expertly deliver innovation and quality to their customers, Callaway Golf’s previous planning and reporting tool wasn’t making the cut. To evolve their enterprise, the sports giant decided to replace their outdated planning software with SAP Analytics Cloud for planning.

Together with Avvale, Callaway Golf successfully implemented SAP Analytics Cloud across their global enterprise in just 6 months. Now, Callaway Golf has a single, consolidated planning solution that has enabled streamlined expense and asset plans so they can focus on what they do best– revolutionizing the sporting world with cutting edge equipment.

Founded in Italy in 1962, our client is now the largest electric company in the country and a global leader in the energy and renewable sources production sector. With a strong focus on sustainability and innovation, the company extends its influence across a broad landscape, operating in 30 countries, with the aim of delivering increasingly sustainable and reliable energy to over 75 million end-users worldwide.

The Challenge

Our client engaged Avvale as a technology partner to address a significant challenge related to improving sustainability efforts: translating its materiality analysis model, a benchmark in the energy sector, into a computer application supporting the Sustainability Planning function.Two primary factors drove this need: constantly evolving ESG regulations and the opportunity to steer innovation in an increasingly sustainable direction. 
These factors highlighted the necessity of establishing a more robust and structured governance in the materiality analysis process.

The project aimed to revamp the "Innovation and Sustainability" and "Digital Hub" areas by introducing a customized solution designed to replace the previous, less efficient and intuitive one. Until then, the information collection and processing process had been lengthy and cumbersome: surveys were sent to suppliers through an online platform; the results, initially collected and organized in spreadsheets, were then manually input into the existing platform, whose processing times had become challenging to sustain.

To streamline this process, there was a need to implement a single integrated solution capable of centralizing all materiality-related data, allowing for a more coherent approach to regulatory sustainability requirements.

The Approach

Building on a strong client relationship and well-established expertise in sustainability matters, Avvale guided the company in selecting the most suitable technology for this innovation process.

Following a detailed analysis of the client's needs, Avvale translated them into macro and micro functional applications, developing a tailor-made application based on AWS cloud services. The result is a high-performing and intuitive platform enabling the company to efficiently conduct materiality and dual materiality analysis, generating part of the reporting destined for the DNF. An essential aspect is related to the timelines of the previous application, reduced through integrating surveys into the platform, ensuring real-time reporting.

To further enhance the process, Avvale implemented a Machine Learning algorithm that analyzes content in stakeholder-related documents, providing a materiality ranking for the company. This text analysis algorithm complements more traditional stakeholder interviews, reducing time spent on reading and analyzing documents helpful in defining the materiality matrix.

All of this has allowed our client to achieve effective governance of the entire ESG process and, more specifically, the following phases:

  • identification of material themes;
  • identification and weighting of stakeholders;
  • involvement of internal and external stakeholders;
  • production of reporting in materiality, with a view of both classic and dual materiality.

The Challenge

Before integrating SAP Analytics Cloud, Callaway Golf's planning landscape centered around SAP's legacy planning solution, Business Planning and Simulation (BPS). While BPS met Callaway Golf's planning needs for many years, the enterprise began to experience limitations with their old solution:

  • Disconnected plans across the board: As Callaway Golf expanded and acquired new brands, planning processes greatly differed across the enterprise with some business units using Excel spreadsheets and others using legacy solutions for planning.
  • Outdated planning functionalities: The existing legacy planning solution lacked many modern functionalities. Among them, salary calculations and asset depreciation automation needed improvement. As a result, it became difficult to create detailed and accurate forecasts across the globe.
  • Significant IT support: The legacy solution required continuous management from IT to maintain runtime. IT had to carve out a full day every week to manually maintain the solution.
  • No single source of truth: Various departments and brands used different data sources, which led to data silos across the organization, making it difficult to gain a clear picture of the enterprise's planned expenses.
  • Rigid user interface: Legacy forecasting system was difficult to navigate and lacked working functions and calculations across the board, such as planning on depreciation and existing assets, adding vendors or members on the fly, and breaking down their cost center expense planning forecasts.

The Approach

With Avvale experts on their side, Callaway Golf laid out the following goals for their new planning landscape with SAP Analytics Cloud:

  • Crowdsource and consolidate plans across the enterprise to gain a global overview of their planned expenses and expand the input capabilities to each responsible owner.
  • Leverage elevated planning functionalities to create faster and more accurate forecast cost center expense and asset reports. The ability to customize calculations enhances and automates the reporting metrics.
  • Harness the power of self-service analytics to alleviate IT from the burden of simple maintenance and data entry requests, so they can focus on high-ROI tasks.
  • Maximize user-driven admin capabilities to control the management of calculations and forms.
  • Create new KPls driven by the business needs.

When SEM-BPS was the center of Callaway Golf's planning landscape, flexibility was a huge factor that was missing. SAP Analytics Cloud contains powerful scenario planning capabilities that help organizations quickly uncover actionable insights to make data-driven decisions. For Callaway Golf, SAP Analytics Cloud's modern planning functionalities provided users with the ability to:

  • Add members on the fly
  • Plan on existing as well as planned assets and automatically calculate the depreciation of values
  • Test "what-if" scenarios for deeper analysis by creating private versions of plans
  • Customize the solution based on their current business process
  • Perform driver-based calculations
  • Empower users to execute end-to-end planning scenarios, without the help of IT

The Impact

Introducing a new platform has revolutionized the company's materiality process governance, providing a high-performing and user-friendly application that has allowed for scheduling the various phases of the process, managing openings and closures, as well as functionalities and activities.

Sharing best practices has facilitated alignment across the entire group with the holding, ensuring the adoption of a common approach in engaging internal and external stakeholders through a customized common matrix regarding engagement methods and assessment content.

The integration of questionnaires has increased speed and efficiency, enabling real-time report generation and drastically reducing timelines compared to previous processes. Furthermore, thanks to the use of the machine learning algorithm, the analysis of stakeholder documents has been optimized, replacing detailed manual document analysis with a tool capable of automatically providing reliable classification.

In broader terms, materiality analysis has identified the most relevant aspects related to the client's sustainable business model and the needs of its stakeholders, highlighting their interconnections with the 17 Sustainable Development Goals of the 2030 Agenda. This constant monitoring of stakeholder expectations, known as "dynamic materiality," helps understand how relevant themes change over time, identify targeted ESG objectives for long-term value creation, and determine the content to include in corporate disclosure documents.