Microsoft is putting its Dynamics AX Enterprise Resource Planning (ERP) offerings on the green IT bandwagon, this week unveiling its free Environmental Sustainability Dashboard that aims to cut businesses' environmental impact.

The dashboard promises to reduce fuel costs, track carbon emissions and add value to ERP systems.

But Microsoft stands to benefit as well: Industry insiders said the move is highly strategic for the company's positioning in the ERP market.

"By releasing this now, they are signaling to the market that they can fully compete with [competitors] since they don't even need other developers to create modules their clients need and want," said Esteban Kolsky, vice president and practice leader at software integrator eVergance.

Microsoft's new toolset enables midsized businesses to capture data needed to measure energy consumption and greenhouse gas emissions. It also makes that data available within their enterprise resource planning solution, helping them pinpoint ways to cut their energy consumption and costs.

"There's a massive paradigm shift in business practices and sustainability," Jennifer Pollard, senior product manager at Microsoft Dynamics, told InternetNews.com. "Shareholder value is no longer squandered. Now there is a new perspective behind how business is done."

Pollard said the dashboard enables companies to meet a dual objective: reducing fuel costs while reducing carbon emissions.

"With the new dashboard, companies can 'do good' by doing well," she said.

The new dashboard harnesses Microsoft Dynamics' RoleTailored client, which employees use for a personalized Role Center interface based on the information they need to do their job. At the same time, the dashboard itself serves as the Role Center interface for a business's environmental manager.

Reports can be displayed within employees' individual Role Centers in Microsoft Dynamics AX 2009, or other productivity tools, such as Microsoft Office SharePoint Server.

The aim is to increase internal transparency, drive employee engagement and rapidly raise awareness for environmental initiatives.

That might be the goal, but does Microsoft score the win?

"On one side, they are showing their system to be very flexible, dynamic and easy to change," Kolsky said. "This should please the mid-market that is their target customer, as well as impress others."

"On the other hand ... they are creating a new module in response to a probably passing fad or change in the culture," he added.

But players in this space argue that fuel costs are likely to remain a concern to companies, and that carbon emission tracking is becoming more of a compliance issue.

"There's a lot going on in the European Union and Australia, for example," Pollard said. "France, for example, has made emissions a compliance issue as of 2010. Companies are preparing for stronger requirements in the U.S. as well. Wal-Mart and Dell, for example, are already moving to require their supply chains to provide emission reporting."

Adoption by U.S. giants like Wal-Mart may have the same reverberating effect on the market as the retail giant's radio frequency identification, or RFID (define), requirement for suppliers did a few years ago -- thanks to its endorsement by Wal-Mart, RFID, an old technology, became hot over night.

ERP competitors have taken note and are quickly positioning to seize this new market driver. In recent weeks, SAP announced an agreement with Landis+Gyr to integrate its advanced metering infrastructure with SAP's business application portfolio for utilities. A day later, Oracle hyped new customers for its Meter Data management product and an update to its Utility Quotations Management software.

Utility companies have built their own systems to enable companies to respond proactively to fuel costs, but these are normally not easy to integrate into existing AX systems.

"Between ever-increasing compliance needs and wildly fluctuating fuel costs, companies cannot afford not to have the info in real-time and integrated into their ERP," Pollard said.

Correction updates Dynamics AX product details.