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Accounting and Modeling as Design Metaphors for CEMIS

Andreas Moeller,

2013 ITEE conference, Lueneburg, Germany

Motivation

ITEE

=

Information Technologies for Environmental Engineering

Motivation

Wegstein Tearing

Strategies Simultaneous

Modular

Approach

Local Material Properties

&

Components

Steady-State

Material Flow Analysis

Example

Sequential Modular Approach – Tearing & Convergence

5

Initial guess x, so

I can calculate

[1], then [2],

[3] and [4]

1

4

3 2

If [4] results in a quantity g(x),

which is equal to the estimation

(g(x) = x): success,

otherwise another

iteration (fixed point iterations)

Convergence methods:

Determination von

estimation for the next

iteration, in particular:

+ Direct Substitution,

+ Wegstein’s method

Feed Stream

Example

Sequential Modular Approach – Tearing & Convergence

6

Calculation:

Solving systems of

non-linear algebraic

equations

Motivation

• Improvement of already existing modeling approaches

(Sequential Modular Approach in case of Material Flow Networks)

• Modeling and planning of complex industrial metabolism

(Eco-Industrial Parks, Verbund-Production etc.)

• Future-oriented

• Ad-hoc

• Environmental & economic impacts

• But …

• not as a component of an integrated system (ERP system)

• no relevant (direct) data import from other IT systems

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Classification – EMA Framework

Environmental Management Accounting (EMA)

Monetary EMA (MEMA) Physical EMA (PEMA)

Short Term Focus Long Term Focus Short Term Focus Long Term Focus

Fu

ture

Orie

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d

Pa

st O

rie

nte

d

Ad

ho

c

info

rma

tio

n

Ro

utin

ely

ge

ne

rate

d

info

rma

tio

n

Ad

ho

c

info

rma

tio

n

Ro

utin

ely

ge

ne

rate

d

info

rma

tio

n

Environmental cost

accounting (e.g. variable

costing, absorption costing

and activity based costing)

Environmental induced

capital expenditure and

revenues

Ex post assessment of

relevant environmental

costing decisions

Environmental life cycle

(and target) costing

Post investment

assessment of individual

projects

Monetary environmental

operational budgeting (flows)

Monetary environmental capital

budgeting (stocks)

Environmental long term

financial planning

Relevant environmental

costing (e.g. special orders,

product mix with capacity

constraints)

Monetary environmental

project investment appraisal

Environmental life cycle

budgeting and target pricing

Material and energy flow

accounting (short term

impacts on the environment

– product, division and

company levels)

Ex post assessment of short

term environmental impacts

(e.g. of a site or product)

Physical environmental

budgeting (flows and stocks)

(e.g. material and energy

flos activity based

budgeting)

Relevant environmental

impacts (e.g. given short run

constraints on activities)

Environmental (or natural)

capital impact accounting

Life cycle inventories

Post investment assessment

of physical environmental

investment appraisal

Long term physical

environmental planning

Physical environmental

investement appraisal

Life cycle analysis of specific

project

Source: Burritt, Hahn & Schaltegger 2002

We are here!

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Classification – EMA Framework

Environmental Management Accounting (EMA)

Monetary EMA (MEMA) Physical EMA (PEMA)

Short Term Focus Long Term Focus Short Term Focus Long Term Focus

Fu

ture

Orie

nte

d

Pa

st O

rie

nte

d

Ad

ho

c

info

rma

tio

n

Ro

utin

ely

ge

ne

rate

d

info

rma

tio

n

Ad

ho

c

info

rma

tio

n

Ro

utin

ely

ge

ne

rate

d

info

rma

tio

n

Environmental cost

accounting (e.g. variable

costing, absorption costing

and activity based costing)

Environmental induced

capital expenditure and

revenues

Ex post assessment of

relevant environmental

costing decisions

Environmental life cycle

(and target) costing

Post investment

assessment of individual

projects

Monetary environmental

operational budgeting (flows)

Monetary environmental capital

budgeting (stocks)

Environmental long term

financial planning

Relevant environmental

costing (e.g. special orders,

product mix with capacity

constraints)

Monetary environmental

project investment appraisal

Environmental life cycle

budgeting and target pricing

Material and energy flow

accounting (short term

impacts on the environment

– product, division and

company levels)

Ex post assessment of short

term environmental impacts

(e.g. of a site or product)

Physical environmental

budgeting (flows and stocks)

(e.g. material and energy

flos activity based

budgeting)

Relevant environmental

impacts (e.g. given short run

constraints on activities)

Environmental (or natural)

capital impact accounting

Life cycle inventories

Post investment assessment

of physical environmental

investment appraisal

Long term physical

environmental planning

Physical environmental

investement appraisal

Life cycle analysis of specific

project

Source: Burritt, Hahn & Schaltegger 2002

We are here!

Main application domain of

CEMIS

Type 1

Type 2

What makes the Difference?

• Past-oriented CMIS, based routinely generated data (type 2):

– Controlling: Optimization of already existing work-flows, resource consumption etc.

(Eco-controlling)

– Efficiency of machienery, production processes etc.

– Reporting (communication to stakeholders)

• Future-oriented CEMIS, based on ad-hoc data collection (type 1):

– Old structures and mechanisms are not compatible with new challenges

– New ways, work-flows, solutions and images are required

• Hypotheses:

– Sustainability is such a new challenge

– Design of sustainable industrial metabolism requires new thinking, modeling approaches

– CEMIS become an instrument for organizational learning

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What makes the Difference?

Sustainable Development as a Transition Phase in Our Societies

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100% Degree of Formalization

Time Transformation Phase

What makes the Difference?

Sustainable Development as a Transition Phase in Our Societies

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100% Degree of Formalization

Time Transformation Phase

Organizational Learning

New Insights

Communication

New Values

2

What makes the Difference?

Sustainable Development as a Transition Phase in Our Societies

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100% Degree of Formalization

Time Transformation Phase

Accelerated formalization

of new mechanisms and

structures (eco-controlling),

integration into standard IT,

integrated System

1

Possible Design Images, Perspectives and Metaphors

• Past-oriented CMIS, based routinely generated data (direct data import):

– Integrated System

– Eco-Controlling

– Decision-Support

– Accounting

• Future-oriented CEMIS, based on ad-hoc data collection (indirect data import):

– Tool

– New languages

– Learning, communication, discourse

– New orientations and values

– Modeling

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Integration of Perspectives:

Modeling and Accounting

• No integration necessary:

– In the next years we test and apply tools

(LCA, water footprints, steady-state MFA, MFCA…)

– Step by step integration takes place

(EH&S components & carbon footprint components of ERP systems etc.)

• Transformation processes are effective, if they prepare the formalization steps*:

– Tools as long-term customizing instruments

– Transfer of structures

(e.g. material flow networks as an accounting system)

– Substitution of equation systems by compiled data sets of other IT components

– Support of operations management

– Future of the tools: Customizing

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*Conclusion of Habermas:

Communication processes are successful, if they contribute to replace communication

by non-linguistic mechanisms and rules

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Data Mapper ERP System

Modeling Component

Accounting Component (Structure, Accounts)

KPI KPI KPI

Direct Data Input from

ERP System Components

Indirect Manual Data Input:

Modeling

Pe

rsp

ectiv

e: M

od

elin

g T

oo

l P

ers

pective

: In

tegra

ted S

yste

m

Perspective: Accounting

Conclusions

• It is necessary to have distinguish two different

application domains (remember EMA framework)

• Difference design metaphors should guide the software

development process, proposed metaphors are:

– Modeling (CEMIS Type 1)

– Accounting (CEMIS Type 2)

• Integration of the two orientations or perspectives useful!

(e.g. network structure as an account system)

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