PA Consulting Group
Search our site
  • Phone
  • Contact us
  • Locations
  • Search
  • Menu

share

  • Add this article to your LinkedIn page
  • Add this article to your Twitter feed
  • Add this article to your Facebook page
View or print a PDF of this page
.

Making the green choice - because it makes business sense

Today, CIOs are being challenged to express their position regarding carbon footprint and how they will address ‘green’ issues. But, as this is a relatively new debate, the rules of the game are unclear and so it is hard for CIOs to articulate an acceptable strategy, let alone execute one.

Governments across the world have highlighted the importance of IT in tackling the green agenda, from Japan’s Green IT Promotion Council, the UK ’s Greening Government ICT strategy, the US Department of Energy’s Save Energy Now initiative to the development of data center efficiency programs in India and the beginnings of collaboration with China over industry standards.

Such a wide variety of messages all dressed up in the ‘let’s get green’ new business code leaves CIO s wondering what to do. How do you separate the facts from the hype, the action points from the sales messages and make effective decisions about what should and can be done? When considering changes, organizations need to assess both the financial investment and technological and organizational change. If the business rationale is not sound, green changes are unlikely to be pursued successfully. Our view is that ‘getting greener’ is a form of business transformation that organizations need to address in the same way as any other business change.

While the green issue provides an important source of benefit that the CIO should exploit, it is likely to be an additional benefit as the primary drivers for change remain cost reduction, revenue generation, or both. A real bonus of addressing the green imperatives, however, is the clarity it can bring to making choices between competing options. Approached appropriately, ‘getting greener’ can make difficult change management actions much easier to communicate  IT will, and must, play its own part in reducing the environmental impact of technology (for example by, prioritizing technology replacements using green selection criteria). IT transformation can also be an enabler to green business transformation. Green IT should not just be about low-energy IT.

Reducing the carbon footprint of IT basically covers three key areas: addressing proliferation, harnessing new developments in technology management and facilities, and factoring green into refresh programmes. In tackling our IT energy costs, we have to address proliferation. New technologies have lower power demands, but they are pervasive and as a result proliferate over a much greater number of users or sites. Office equipment is the fastest-growing energy user in the business world and the Carbon Trust in the UK estimates that it consumes around 15 percent of total office electricity and is expected to rise to 30 percent by 2020. Also, with technology comes the potential of standby. Nearly every electronic device has a standby setting where it is idle, but still drawing power, so we need to address this by reducing the amount of standby energy usage and by making it easier to switch the items off.

Looking at technology management, we can identify potential areas for substantial reductions in energy waste. Not all energy required to run a system is used productively. For example, industry practice is to run servers at 20 percent of capacity; however, when idle the server still requires 50-70% of its power. Therefore, better load balancing across servers, or using virtual servers could save investment and reduce power consumption. Rightsizing (not over-catering), intelligent use of cooling (HP estimates that over 50 percent of data center power is used for cooling the equipment), and intelligent management of capacity will be central to future data center design if greener business is to be a reality.

Gains can also be made by updating the data center itself, such as using excess data center energy (heat) to warm offices and water; by channeling in external air (sufficiently cleansed) to cool the data center; and by making greater use of natural energy sources (such as Google’s solar panel farms).

As we start to make technology change decisions, about updates and about possible redesigns for lower cost, the green perspective becomes an increasingly useful additional set of parameters for understanding the longevity and sustainability of the options we have to choose between. However, tackling proliferation, energy use, and energy waste, targeted in many environmental strategies for a demonstrable green impact, is still tackling a minority (albeit a rapidly growing, and heavily sector dependent, minority) of the organization’s total energy bill.

Smarter working and targeted use of new and existing technology are the real drivers for reducing an organization’s overall carbon footprint. This is something the CIO can be central to, with IT already a key part of helping the business to become more efficient through:

  • enhancing existing processes to make them more efficient (so that people can do the same things they already do but more efficiently)

  • enabling new processes (so that people can do things in different ways)

  • transforming behavior through virtualization (doing different things altogether and creating new, low-carbon business models)

  • enabling maximum use of information within the business to enable green choices to be made at every level (ensuring the ‘green’ value of information is made available to all business stakeholders).

Businesses will be going through change as they seek to reduce operating costs; the green perspective will provide an additional measure in the evaluation of key choices. One major IT services company recently canceled a senior management conference and held a half-day ‘virtual’ conference via web conference tools instead. This saved not only a considerable amount of CO 2 from reduced travel but also cost from travel expenses and lost time. Even as a one-off exercise this kind of initiative has value, but unless it is used as a catalyst for changing corporate behavior, its real green value is lost. 

The green aspect must become a tangible incentive that delivers behavioral change with measurable business benefit. Making sure these choices make sense requires a framework and a process for embedding green criteria into the design and decision process for business change initiatives. Figure 3 illustrates one such planning tool that can be used to provoke debate about what can and should be done. But because the trade-offs and must-do’s cannot be treated as binary answers, we need a mechanism comparison that can feed a balance scorecard to ensure future investment and change decisions include both the business and the green benefit. For example, should retailers switch off tills at night, or use the quiet business time to harvest customer data that is high value to their business? If we promote greater home working, do we significantly reduce our office space? Green choices can and will be made where the business rationale is sound.

Decisions need to be made about how business change can also make the organization greener. This means blending environmental, technological, and commercial insights to create a compelling case for change. This way, organizations can realize business benefits and become more sustainable at the same time, strengthening the business case by demonstrating that the smart use of IT will not only enhance efficiency, improve business performance, and control costs but it could also enhance the organization’s reputation from an environmental standpoint internally and externally.

The CIO who can harness both innovation and the intelligent use of technology will be seen to make a positive contribution to the challenges of climate change. Developing new ways of working may require new IT services that increase (or at least limit the scope of reduction in) the carbon footprint of the IT function, but if they reduce the overall carbon footprint of business activity, this is certainly a better business choice. 

For a copy of our entire CIO publication or to speak to a PA expert, please contact us now.