The green advantage
New legislation is forcing many larger companies to look more carefully at their energy usage. Yet as Murray Sherwood, managing director of green IT specialist Externus explains, a well-implemented green IT strategy can help to drive cost savings as well as enhancing green credentials.
Most businesses implement a green IT plan primarily in order to save cost, with legislation also driving the requirement for change. Like any other business investment, the bottom line is that if it does not save money, the company will struggle to justify it.
In the last couple of months, green IT has once again come under the spotlight because of the Carbon Reduction Commitment (CRC) legislation that came into force on 1 April. This will start to have a real effect on businesses next year because at the moment, it is still in the measurement phase.
The first impact of the legislation, which will affect companies on a yearly-basis, will be the release of league tables. These will be published in April 2011 and will show how energy efficient businesses actually are. In total, an estimated 5,000 large, non-energy intensive businesses will be affected including most corporations and sizeable companies. It is expected that a company’s position in the league table with respect to their competitors will become an important measure of how green a company is and could have a big impact on their reputation and brand value.
Consequently, companies that end up lower in the league table will pay more and without significant action, the process is likely to add cost to many businesses’ products and services. Coupled with the rising cost of energy prices this will inevitably drive businesses to become more efficient and find ways to cut back on their energy usage to make essential cost savings.
Green IT
Many of the IT directors that we have encountered are finding themselves in a quandary because they are being asked to contribute to green plans but are struggling to see how IT can make an impact, not realising that the effect that green IT can have can be quite considerable, particularly in terms of cutting costs by reducing energy waste and improving IT processes.
Often, businesses worry about the up-front cost of green IT, in particular the manpower cost. This is a valid concern as a green IT plan is essentially a development programme of actions that staff must take. As we start to come out of recession and re-engage in more projects, employees who may already have been thinned in terms of numbers are already stretched.
Yet properly planned and implemented, green IT can have the combined effect of driving significant reductions in IT-related energy usage, while at the same time achieving multi-million pound cost savings on IT budgets and enhancing business reputation and brand value.
We recently carried out a green IT assessment for Carnival UK, a leader in the UK cruise industry, at its corporate headquarters in Southampton. The final report revealed that the three biggest cost savers were virtualisation, the move from desktop printers to more energy-efficient multi-functional devices (MFDs) and the re-use and extension of the desktops from a year to a five year cycle.
Storage, cooling and airflow in the data centre were also identified as areas in which great savings could be made. Yet the change that saved the least cost – providing facilities to enable staff to work at home – actually saved the most energy, as while it obviously cut travel costs for the employees, providing the technology for home working actually cost money for the business.
Virtualisation
Virtualisation is one of the biggest reducers of power because it lowers the number of machines used. New servers are significantly more environmentally-friendly than older ones both in terms of manufacture and power-use because they are smaller, less power-hungry, more efficient and have software and hardware components that throttle back the power and shut down areas that are not in use.
Conversely, the opposite is true for desktops which are not used so intensively. There is a lot of energy imbedded in the making of the desktop – around the energy equivalent of two years worth of usage. So when you throw away the desktop you are effectively also throwing away two years worth of energy. Extending the usage and refreshment cycle of desktops from around three years to five years through refurbishment or gradual replacement can save money on new equipment while from an environmental perspective, it also cuts back the amount of energy imbedded into the lifecycle of the machine.
Staying cool
Cooling within the data centre is also a big issue as most IT directors are not aware of the cost involved. There is an historical mindset that old computers needed careful husbandry and a cool environment. Yet most new equipment now requires much less cooling and there are techniques that mean that you can direct the cooling far more efficiently, which can equate to as much as a 20 percent reduction in power for the business as a whole.
Many IT workers also think that cooling is difficult because of the way most data centres have evolved – new equipment comes in when old equipment goes out so cooling is not considered at the outset. Yet rather than redesign the entire data centre to optimise cooling, many of the organisations that we have worked with have found that simply moving equipment around to focus the cooling can result in a dramatic reduction in energy usage. If you have a combination of new and old equipment you can simply segregate it into zones and put a divider down the middle.
A holistic process
Green IT should be a holistic process and therefore one that requires commitment from all areas of the business. In our experience, convincing management about the potential benefits of green IT is therefore even more crucial than changing the mindset of IT staff.
The main reason any change management programme fails is because of a lack of vision at CEO or director level. If the project is too ambitious with no ‘quick wins’ or successes in the early part, this can also leave people very disillusioned. A successful project will therefore typically have a combination of vision, quick wins and direction.
The simplest measures, or ‘quick wins,’ tend to be the ones that are easy to implement and invisible to the other areas of the business. For example, if you change the way that the data centre is cooled, or move from real servers to virtualised servers, users will not know or care as these are all things that happen behind the scenes. Some of the more significant changes, however, do require the rest of the company to buy-in.
For example, Multi Functional Devices (MFDs) make printing far more efficient and unlike handy desktop printers, they are shared by many people and typically positioned a short walk away. This means that users must leave their desks to collect material, making it a bit more inconvenient for them to print and therefore more likely to consider what they are printing. One of our customers has seen a reduction of over 40 percent in the volume of material printed as a result.
The fact that MFDs save the business money is unlikely to convince users that the new devices are a good idea. Explaining that they are much more environmentally friendly however, will usually – and validly – persuade users that these cost-saving machines are worthwhile.
Software bloat
At the top end of the green plan are measures to increase the efficiency of applications and reduce ‘software bloat’. Historically, most of these systems have been designed to be in use all the time because energy has always been cheap. Now that energy has become more expensive and there is greater scrutiny of energy usage, more complicated changes such as the move to smaller, more energy efficient systems are well worthwhile and will give demonstrable returns both in terms of money and carbon reductions.
Savings that have been made in this area can be re-invested into schemes that don’t actually save money but do reduce carbon such as home working, with the net result that the business has a cost-neutral green IT policy. Other companies simply want to use the exercise to drive cost savings.
Once a green IT plan has been implemented, there is no reason why a business should not see a return on investment within a year, particularly on those changes that don’t involve huge capital expenditure. Some initiatives will have an early payback whereas others, such as virtualisation programmes, might take between nine months and two years to implement.
It is therefore important to look at the business cases individually and design a change programme that includes a variety of elements that give an ROI within a year and balance the portfolio of other changes. During the initial five year change plan, the business should be in a position to incorporate and evolve green IT as part of existing departmental plans, taking into account new technologies and changes to the business as they happen.
