People, planet, profit – metrics that drive environmentally savvy firms

9 Apr 2009

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Where are Irish companies poised in order to reduce waste, carbon and energy usage?

The whole spectrum of green IT has expanded in recent times, as what started as an environmental issue for planet Earth has morphed into an issue for individual companies to ultimately cut their costs by using less energy.

A green IT practice survey carried out in March by the Business Information Systems (BIS) group at University College Cork (UCC) has found that few of the top 500 Irish organisations currently have green IT policies in place.

“From our survey, 69pc of organisations do not have green IT policies, but 88pc are concerned about their electricity use,” explains Dr Brian O’Flaherty, BIS, UCC.

“The sectors that are less likely to have green IT policies are finance/insurance, healthcare and education.”

Based on its findings, the BIS team predicts that a number of organisations will be developing such policies in the next year or so, plus it estimates over 70pc will have one by 2011.

In theory, alternating to green technologies will help the triple bottom line — people, planet, profit — but what is the reality out there for companies, particularly small to medium-sized enterprises (SMEs), in terms of making the switch, and are companies still sceptical?

Daniel Tinkiel, chief operations officer, Data Electronics, says there are several reasons why companies are unconvinced.

“In small firms, the accountability of CIO/IT managers regarding energy costs almost doesn’t exist.

“IT managers are more concerned about addressing IT issues, while energy, cooling and environmental matters are not usually considered part of their responsibility,” he says.

“It’s not only IT people, but there are also many who still do not understand the economic and quality-of-life impact produced by the lack of a green IT policy to control emissions,” adds Tinkiel.

IBM is one organisation that has been pushing the green agenda for some time now.

Robert McCarthy, manager, Innovative Environmental Solutions at IBM Ireland, says the raison d’être of the group, which is a worldwide one for IBM, is about “adding value from a green perspective”.

“IBM has formulated a new strategy called Smart Planet. It’s all about using green technology to do smart things for people, infrastructure and our eco system in general,” he explains.

Referring to the reasons for implementing a greener IT infrastructure, McCarthy says right now people are looking at the main drivers such as regulations and directives for water and energy infrastructure.

“Other drivers are around cost. There’s also the whole brand image and corporate social responsibility opportunity. So, there are many reasons why organisations should spend money on green projects.”

He refers to a report from Gartner, which reveals how green IT projects may be the most important area for IT organisations over the next 18 months, but says costly mistakes can be made when starting out.

According to Tinkiel, a major error companies make when restructuring or redesigning a computer room, for example, is to look at the acquisition cost only.

“In most cases, people design and build computer rooms based on acquisition-cost criteria, but do not look into the running costs which, in several years of service, become much higher than the initial construction cost.

He says the “total cost of ownership” model should be used to decide how to fit out a computer room, or in deciding other mechanisms to obtain a lower total cost.

An interesting point raised at the Reduce CO2, Raise Profits conference held in Cork last November was that although IT makes up only 2pc of carbon emissions globally, it has the potential to provide solutions to help radically reduce the other 98pc.

Says McCarthy: “If we do things wisely and use the 2pc of carbon emissions by running data centres, then we can drastically reduce the carbon emissions in other areas by doing clever things such as modelling and simulation.”

Tinkiel argues that the energy used in private computer rooms versus data centres is between six to 10 times higher due to the inefficiencies in design, a lack of focus on green technologies and lower economies of scale.

“IT can and should help to reduce emissions in a twofold way: by making more efficient use of the infrastructure and by using the economy of scale provided by data centres.”

Virtualisation and outsourcing are two areas where companies can achieve tangible change, says Tinkiel.

One proposition that IBM Ireland has developed is Green Sigma, which it runs out of its cloud infrastructure.

The three areas Green Sigma looks at are carbon emissions, water management and waste management.

McCarthy says with a proposition such as Green Sigma, companies can cut their costs by 20–25pc.

“We’ve been running this proposition for about a year and it looks like we’re going to make significant savings.

“It’s all about a return on investment. Anything that can show a return within 18 months should become very visible to IT managers,” he adds.

So, can SMEs realise benefits in the short term by going down the green IT route?

Says Tinkiel: “Yes, they can, by reassessing their infrastructure in terms of utilisation and evaluation using a third-party data centre. The investment in this approach pays back quickly and profitably.”

By Carmel Doyle

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Carmel was a long-time reporter with Siliconrepublic.com

editorial@siliconrepublic.com