Greening the supply chain

Greening the supply chain

Boosting the 'green credentials' of the supply chain.

Information technology professionals have unwittingly become the latest climate warriors. In services companies, the IT department looks after the most power hungry - yet most underutilised - asset in the business. Although IT doesn't pay the power bill, it can potentially influence power consumption according to which devices are purchased and how they are managed. With an eye planted firmly on costs, IT is in an ideal position to help a business take stock of and reduce its power consumption. Leading the charge are IT vendors and services companies, who are keen to demonstrate the possible cost savings and short payback periods involved in installing green hardware.

Apparently, IT has been positioning itself to spearhead such a strategy, centred on conservative use of resources, for years. Whereas concepts such as telecommuting, remote access and teleconferencing were popularised initially because they were possible, such initiatives are being revisited in the name of reducing carbon emissions.

IT companies are approaching their new-found "green" role in two ways. As the industry is at pains to point out, simply purchasing the latest thin client desktops and virtual servers is a pointless exercise unless real behavioural changes are enacted within an organisation. Besides educating customers about which products to use and how to use them, vendors are putting pressure on their suppliers to make green inputs - which boosts the "green" credentials of the whole supply chain.

While change is occurring at a rate of knots inside the industry, IT companies are having as much trouble convincing their clients to shell out for green products as they are influencing user behaviour. "IT managers are struggling to make a business case to invest in green technology," Macquarie Telecom managing director Aidan Tudehope says. "A lot of companies are not willing to shell out the dollar to reduce emissions at present, but I'm hoping that will change."

But Tudehope says that vendors are part of the problem. "There is a lot of vendor hype in the marketplace at the moment. Each vendor will only do the return on investment calculation for their own products, but if you use several different brands of hardware then you may need a combination of several calculations."

But before IT providers can reap the opportunities provided to them by climate-change-aware companies, they are the first to admit that being green must come from within.

Outsourcing company EDS has established Agility Alliance with other members of its supply chain. Involving household names such as Microsoft, Fuji Xerox and Dell, engineers from these companies are pooling their efforts to create "best-of-breed" solutions.

As part of an internal greening strategy, EDS puts these initiatives to the test with its own staff before implementing them as solutions in client organisations. In collaboration with Fuji Xerox, EDS has run a managed output services program. Here, Fuji Xerox worked with EDS to determine the optimal number of printers for the company, and specified an optimal number of users per printer.

This project enjoyed immediate success as EDS was able to reduce the number of printers in use at any one time by 71 per cent, which represented a carbon footprint reduction of 79 per cent for printing alone. Managing director Chris Mitchell says that a project of this nature involved more behavioural shifts than changing expenditure patterns.

"It was easy to set up things like double-sided printing, but changing the behaviour of management was much more challenging," Mitchell says. "We had to persuade managers to relinquish exclusive access to a printer. As part of our managed output services implementation, we introduced a new billing system, where individual departments get billed for their printing, including whether they are using black and white or colour."

Mitchell says that a company's IT infrastructure is among the most underutilised in a business. "IT is extremely underutilised as a business asset - utilisation is only 10-20 per cent. Eighty per cent of a company's IT budget is spent on the upkeep of legacy systems, 40 per cent of the power budget is spent on powering servers and desktops."

To date, these gross inefficiencies have not caused too many problems, simply because businesses are not constrained by electricity prices - yet. "In the coming months, we will see upward pressure on electricity prices - they could be three to five times higher in the years to come - for most companies, that's a serious economic issue," Mitchell says.

It's not just the price of electricity that could potentially stunt the exponential growth of server rooms and data centres. Recently, the Australian Institute of Company Directors wanted to purchase an additional server for its data centre, only to be refused by facilities management.

IT manager Geoff Rose was told that the data centre was already running more servers than it was designed initially to house, and if the group wanted to add another it would have to upgrade its air-conditioning facilities accordingly. Rose says that this would have cost more than $20,000 - far more than the incremental server cost.

Rose's solution was to increase the number of operating systems and applications running on the existing servers using a technique known as virtualisation. Conventionally, operating systems and applications are run on users' desktops, with shared files and folders stored on a collection of servers.

Virtualisation allows operating systems and applications to be deployed straight from the server room. Instead of the operating system and relevant applications being run from desktops, multiplied by the number of users on the network, an image of the relevant operating system and applications is instead run on the server.

The image is then multiplied by the number of users on the network. Besides needing fewer servers to operate the network, thus reducing power consumption and cooling requirements, virtualisation carries a host of other benefits. Servers that aren't in use overnight can be powered down and virtual servers are more readily deployed into disaster recovery mode in times of an emergency.

Currently, VMware is the only retailer of virtual servers. Another company, Citrix, sells servers with application streaming - this means that applications can be deployed from a central location on a server and do not need to be installed on every desktop.

Centralising the provision of operating systems and applications means that desktops can become smaller and less power hungry. Vendors such as Sun Microsystems, Dell and HP are now rolling out "thin client" - machines that rely on servers for processing activities.

Sun's thin client is a mere shadow of a regular PC - just a few centimetres cubed in dimension, it uses just four watts of electricity. "It's basically a small rectangular box," Sun corporate affairs director Richard Barrington says. "It has no chip or RAM, and it can support up to 100 users on the network. Each employee has their own magnetic swipe card that has details of the applications they use and the files they have stored on the network."

Barrington says that by adopting thin client, the company has saved $75 million in operating costs each year. "We have 38,000 employees hot-desking," he says. "Thirteen per cent of people work from home three days per week. All data and applications sit on a server somewhere instead of on each individual PC."

Because computers are largely powered off the server, individual desktops do not need to be replaced as often, Barrington says. "A huge amount of raw materials are needed to manufacture computers, most of which ends up in landfill within two years. Thin client systems, on the other hand, last much longer than two years and their production uses 90 per cent fewer raw materials."

Macquarie Telecom is another IT provider that has subjected its data-centre operations to the full green treatment. The company says that it is already reaping benefits - some clients are now attracted to the data management company on the grounds of its green credentials.

Tudehope says Macquarie's first task involved greening its supply chain. "We can make absolute calls about which provider we use. We have interacted with our core infrastructure suppliers, including power and cooling providers. We've been asking these vendors how do we measure whether we're efficient and how can we improve? But first, we had to establish a benchmark and an end goal."

Influencing the other end of the supply chain was not as straightforward, Tudehope says. "We don't have complete control over what our customers do. We have some say over which hardware provider they choose, for example, Dell, HP or Sun."

Macquarie's next challenge is to run a fine-tooth comb over the emissions it generated from its own operations. "We decided to measure the exact power consumption of every rack and cage in our data centre," Tudehope says. "In the first two months that we undertook the program, we managed to cut our energy consumption by 6 per cent."

This step involved considerable behavioural change. "We have an onsite facilities manager whose job it is to look after the data centre," he says. "One of his key performance indicators is to reduce energy consumption of the data centre. Generally, this would not be in the vocabulary of the CEOs of most companies."

Establishing systems to measure and monitor power consumption was the main expense in this initiative, Tudehope says. "We did incur costs in the increased level of power metering. We had to install all of these metering devices because we originally didn't think that we would need so many when we built the facility six years ago."

Cooling the server racks presented a unique set of challenges. "We need to have uniformity of cooling in all of the racks. We're currently doing some analysis to ensure that the top and bottom of the racks are being cooled effectively. We had to make other decisions, such as what sort of tiles to have in the data centre, whether the cooling is taking place at the right temperature. Some devices don't need to be cooled to 16 degrees - they can still operate at 23 degrees," Tudehope says.

Macquarie Telecom emerged from its energy audit having learned several lessons, which it now imparts to clients. "Once we find the best method to do something, we're on the phone to clients showing them how they can do it too. It's like an intellectual property transfer where the client can replicate the same techniques on their own servers."

However, getting clients to buy hardware such as virtual servers addresses only half the issue. "There are efficiencies involved in buying larger devices, assuming that you need the extra capacity. But it's also the way you run devices. It's important to shut them down when they're not in use," Tudehope says.

Shutting down computers when they are not in use is the new mantra of the Australian Computer Society. Fresh from an energy audit of Australia's entire computing inventory, the ACS estimates that IT use by Australian businesses generated 7.94 mega tonnes of carbon dioxide emitted in 2005. This is equivalent to 1.52 per cent of national carbon dioxide emissions.

With road transportation accounting for 12.6 per cent of emissions and industrial processes 5.3 per cent, it is clear that computers are making substantial contributions to Australia's overall emissions pie.

ACS president Philip Argy says that IT equipment is now the biggest emitter within services firms. "I wasn't surprised about the high emissions levels from the services sector because it has a higher proportion of technology in use. The manufacturing sector was previously a higher user of energy but many processes have since been automated."

Considering this, Argy says he was surprised that most IT managers are not really concerned about the issue at present.

"There are more signs in companies telling people to turn off the lights than to switch off the computers when they leave," he says. "I was struck by the fact that organisations haven't given the issue too much thought. I think there is an issue but it hasn't reached perceptions. It's a dawning awareness. There's the odd company here and there that has a strict energy policy. Small businesses tend to be more focused on cost because their chief executive still sees all of the bills."

While Argy advocates the use of virtual servers, he is a proponent of behavioural change leading investment into new infrastructure. "You can save real money by changing small things. Even the difference between having the screen saver on and being switched off is large when you multiply the effect across a lot of computers. Computers should have energy star ratings, so you can compare the energy use to other appliances, such as refrigerators.

Argy says companies should restrict the focus of energy initiatives to those which improve productivity. "The idea is to use technology to optimise your power consumption. Don't let the energy savings be a driver of what you do. It's an awareness raising and when you can deliver savings as well as productivity gains then it's a good thing. I think that there is still a lot of scope for server virtualisations."

From its emissions audit of the ICT sector, the ACS has produced a set of recommendations for companies. It calls for the creation of a green ICT policy outlining a range of measures, from green procurement to switching off devices at night in order to reduce carbon emissions. Recycling old product at the end of its useful life is a core element of such a policy.

While the ACS recommends that small businesses in the IT industry purchase offsets for each employee - ranging from $144 to $576 annually for a business with between five and 20 employees - Argy says the concept hasn't enjoyed much acceptance among industry practitioners. "We had a few raised eyebrows when we suggested that the companies might consider purchasing carbon offsets to offset their emissions," Argy says. "I wouldn't say it gets a high rating but a lot of people have energy consumption somewhere on the list. It's more of a cost thing than a corporate responsibility strategy for now."


© Fairfax Business Media

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