The money trees

The money trees

A big bang green project is hard to sell unless there are cost benefits. Here is how CIOs can make a business case for green computing.

A big bang green project is hard to sell unless there are cost benefits. But from little things, big things grow. So small incremental gains are a good way to start people thinking. Green computing had to happen. But how a chief information officer makes a business case for green IT, or how they pitch the importance of green computing to the business, is another matter.

If there is more profit to be made in pushing a green agenda and environmentally-friendly operations, then it is logical that a business model will follow suit.

Information technology hardware, it seems, is caught in the middle. Accused of being a voracious consumer of electricity and pumping out carbon emissions on a massive scale, it is no wonder data centres have come under growing scrutiny. And if the data centre is not consuming electricity at an unprecedented rate, then the air conditioners cooling it are adding their bit to global warming.

Data centres do have a large energy footprint and virtualisation tools are being marketed as the answer to reducing the number of servers held in them, and thereby lowering an organisation's environmental load.

But before being green became sexy, virtualisation - grouping several servers onto a single machine - was sold as the way to cut costs and free-up real estate.

Money is also Green

What's the CIO to believe? Can a budget for anything be approved if it's shrouded in a green cloak?

Sue Mortimer, CIO for listed Australian pharmaceuticals company, says it is the small process changes that gain the most rewards initially. "Virtualisation is good from a systems resource point of view but IT has to work smarter not harder for an environmental bent. There are teenage kids out there more green than I am, but I am learning," Mortimer says.

"There are small process changes that can be done in the entire organisation - we have increased the ambient temperature in the data centre by two degrees to save on cooling, with no ill effects, and now run the entire organisation on seven multi-function devices.

"We do have congestion periods now, but people are normally happy."

Small change

Minor changes, such as consolidating printers, switching off desktop PCs (or going to a low-power state) every night, are the easy wins and reduce the environmental load as much as ripping out a data centre. Recycling used desktop hardware and ensuring correct disposal of chemicals and metals used in manufacturing monitors are also effective.

Many companies are running a carbon-neutral enterprise by purchasing carbon credits or offsetting carbon usage.

However, in terms of core information technology operations, industry analysts are not convinced the green IT push has gained traction in Australia.

Hydrasight analyst Michael Warrilow says there is generally no discussion about e-waste and little about eliminating, as opposed to reducing, the carbon output generated by IT.

"On the back of corporate social responsibility plans, IT will soon get a memo saying their operations have to be carbon neutral," Warrilow says.

"However, the goal of IT should really be to be less 'brown' as opposed to [becoming] completely green."

Brown IT, he says, refers to the dated and environmentally-unfriendly manufacturing processes that many hardware vendors are shedding in order to pump out green products.

In a 2007 white paper entitled IT is not easy being green, Warrilow predicted that most of the decisions to go green would be made before the end of this year. Businesses would start to mandate the use of impact-reducing technologies such as voice and video conferencing to cut down on carbon-producing travel.

He predicted that most of the corporate environmental policies and guidelines would be in place from 2009. Environmental caveats in contracts would be pushed down to suppliers soon after. IT gear was the weakest link in the environmental chain, his report says.

Warrilow believes that most, if not all, environmental protection initiatives will be challenged by the limitations of current information technology, such as manufacturing and operating requirements.

"Due to the enormity of the task, the immaturity of environmentally-friendly IT alternatives and current IT asset life-cycles, we believe [many aims] will be a near impossible challenge to meet - but one that nonetheless will be required in light of growing public and employee opinion," he says.

Even though Hydrasight's research shows server virtualisation is regarded as providing environmental benefits, the reduced power and cooling costs that are considered to be of higher value by IT organisations, even without the threats of carbon taxes or other mechanisms, might significantly inflate the price of energy.

Corporate responsibility

Most CIOs that have already undertaken an enterprise-wide green project believe it is the small incremental gains that give the best results.

Mortimer says green IT projects have to have a business case backed by operational cost reduction. Without this cost benefit, a big bang green project will be almost impossible to sell, unless it is driven by the entire organisation.

She says the small gains have the most immediate effect. These are the tiny behavioural changes - like turning off PCs after work, web conferencing as opposed to travelling, and cutting electricity use and the footprint of a data centre.

"You have to sit down and think about how you do IT systems better, not just with a green bent but packaged in a business case of corporate social responsibility - there are a huge number of opportunities, you just get people thinking about what they can do," she says.

"We have adopted a green IT approach, but it is user-led, such as only printing in black and white on double-sided paper, and if this is challenged by staff for personal reasons we can say it is part of our green policy and then they are happy to comply."

The CIOs who advocate green business say organisations tendering for IT services will demand that they are contractually compliant to producing and administering more environmentally-friendly gear.

Green IT, according to Bank of Queensland's CIO Iain Blacklaw, will soon move from a social nicety to a contractual necessity.

Blacklaw lives and breathes green. He gave up his car to walk to work at the Bank of Queensland's five-star green-rated building and he believes that the banking and finance sector has a massive role to play in more environmentally-aware business practices.

The issue of green IT, he says, is just one cog in the bigger machine. Sure, IT is a big consumer of utility power and could do much better in terms of usage but "greening" end-to-end business processes is broader and deeper than just IT.

Blacklaw says the Holy Grail should be green business with IT as an important part of it.

Virtually green

"We have to change the behaviour of doing business. I was at a conference at the end of 2007 when some bank representatives were saying they generally had environmental concerns, and considered the role virtualisation had in reducing power load in a data centre," Blacklaw says.

" But everyone present had come by cars, aeroplanes and taxis.

"Virtualisation is driven for the right economic reasons [cost savings] with the by-product lower consumption of utility power."

But organisations risk succumbing to a level of superficiality, he says.

Corporate social responsibility should be part of any green campaign and woven into the fabric of the organisation and business processes.

"Our head office building has the utility consumption governed by the people who own it. We have already had a massive rationalisation of printers. We use double-sided paper for all internal printing and our next extension is to look at business processes," Blacklaw says.

He says BOQ needs to look at the amount of paper produced by its business. Banking is environmentally intensive due to the terms and conditions legally required for customer banking. Blacklaw says some laws and regulations require rationalisation to become more "digitally applied".

"For every loan we approve we get four inches deep of paperwork and have to sign-off on another four inches of paper. The next step at an industry level is to look at what is driving the consumption of these resources."

Blacklaw says that outsourcing contracts, especially for hosting or for a primary data centre, will eventually have caveats stipulating overall greenhouse gas emissions.

Five years from now, he says, this will be the prime criteria for selecting a data centre outsourcer or hosting provider, and an effective sales tool.

Not today, thank you

Peter O'Donovan, manager of IT operations for the foreign currency exchange group Travelex, says the business case for greening an organisation, let alone the IT department, doesn't stand up at the moment.

Generally, a business case is put forward for financial benefit only.

The environmental bent is secondary to the cost-cutting measures of projects such as virtualisation, which free up real estate.

As well as recycling PCs, Travelex offers the opportunity for its employees to work from home, as well as flexible working relationships and a compacted working week to ease its environmental load from employee travel.

"We have done a lot with virtualisation of our server farms and data centre, all the equipment we purchase has 'power-save' modes and more efficient server technology allows us to run [at] lower energy and cooling costs," O'Donovan says.

"While we don't have an overarching green IT policy, we are consolidating a lot of technology into a single hub in Sydney and as a result [we] are reducing the size of our server rooms in Asian locations such as Hong Kong, Japan, Singapore and New Zealand."

In a strategic business review late last year, national retailer Harvey Norman developed its first business case for environmental awareness.

Harvey Norman CIO Kaine Escott says there was no pressure from the business itself to develop a green IT policy or approach - rather, the pressure on IT came from an emphasis on cost control.

The retailer chose to outsource its data centres but Escott says green concerns on their own were not a sufficient business driver for the project but regarded by the board as a tangible benefit.

"I would assume a data centre provider would be more efficient with cooling and electricity," Escott says.

Start building a green IT strategy

* A green business case must be placed in the context of overall cost savings.

* Start from the ground up, and consider employees as the first step.

* Remember the "paperless office?" Think twice before printing or photocopying.

* Involve the local community in a PC recycling scheme.

* Look for the easy wins first such as teleconferencing as an alternative to travel.

Sidebar: Money trees

Less brown IT is a more attainable environmental stance than green computing or green IT - at least in the short term.

And the phrase "less brown IT" is a more realistic summary of the current state of enterprise computing hardware.

The industry, as a whole, has emerged from the winter of enterprise IT discontent to the spring of computing enlightenment, and all and sundry want to bask in the sunshine.

Today, vendors pitch green products designed in green buildings that are eagerly awaited by firms oh-so desperate for green products to drive their green operations. I must admit, just thinking about it makes me feel a little green.

The same customers desperate for "environment-friendly" gear may in fact sponsor V8 racing cars.

Shareholders, I am sure, would baulk at the idea of profits being redirected from their portfolios to develop a Christmas tree farm in Bavaria to ensure their operation is carbon neutral, or is at least able to offset carbon usage from inefficient operations.

Green hype and hypocrisy has wound its way onto the wider business agenda, and it's up to the IT department to firewall the organisation from some of the more ridiculous marketing claims.

The formative years

IT hardware does have a place in becoming more energy efficient and being more responsible towards the environment, but simply leading a slash-and-burn raid through the data centre will not solve the problem.

Prior to the green bandwagon, virtualisation was touted as a way to reduce server footprint and save on real estate. Now, it is pitched as an environmental panacea to lessen the amount of physical servers needed, therefore creating less of a strain on the electrical grid.

But would a business be interested in either if the end result were not rooted in dollars as well as sense?

Could you, as a chief information officer, imagine pitching a business case for anything that was not grounded in economic reason?

We all know you would be wasting your time. What we are witnessing are the formative years of green business. The collective consciousness has already gravitated towards understanding the role people play in being environmentally aware.

More often than not, an organisation's green policies are led from the ground up, possibly championed by the office "greenie".

Green IT evangelists

It only takes one person to drive an environmental awareness campaign across an organisation, and the majority of Australian companies have at least one green grandstander to lead the charge. But once the paper recycling bins have been rolled out and PC recycling programs sorted, where to next?

The IT department, apparently, but IT is beholden to the business. And unless the organisation takes a completely green approach to all operations, information technology is stuck being the "power user" of electrical services.

When it comes down to it, business is business. Large banks that preach from a bible of corporate social responsibility policies and have junked the executive Holden Statesman for the modestly environment-friendly Toyota Prius are, of course, still willing to lend money to organisations with no environmental policy and no desire to do anything more forward-looking than turn profits.

Which is, of course, the problem the world over. Until direct financial benefits are tied to running a tight green ship, only small environmental changes will be done, in isolation, inside the organisation.

Unless a green evangelist steers the ship, pushing the proposed cost savings will be the only way to get any project (green or otherwise) off the ground.

But CIOs are an innovative lot and the idea of meeting a budget by the skin of their teeth is nothing new. So expect to see these evangelists come from IT departments and lead green computing into realistic scenarios.

If it comes down to a "creative" business case to start greening your IT organisation, then so be it. If it takes tireless lobbying to the board to promote an overall green agenda, then the CIO is the right person for the job, as I am sure they are used to winning uphill battles by now.

The hard work may have already been done. Various transaction-based carbon trading platforms have been launched worldwide.

Australia's Electronic Emissions Trading Platform routinely sells voluntary emission reductions (VERs) units and is recognised by the Australian government's Greenhouse Challenge Plus program (a campaign to improve energy efficiency among Australian businesses).

Purchasing the VERs does not automatically put a company in the umm, green, rather it allows a business to note an offset during an accounting period.

At least it's a step in the direction of associating a realistic dollar value (or dollar potential) to carbon emissions. And for the CIO's sake, it's an important weapon in developing a business case for IT to curb electrical usage by whatever means necessary.

Fairfax Business Media

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Tags strategyvirtualisationgreen ITcostsvirtualizationclimate changeHydrasight

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