Utility firms lead US$950bn charge towards sustainable IT

4 Feb 2011

Sustainable IT is set to become one of the hottest topic areas for CIOs in 2011 and Irish energy firms ESB and Mainstream Renewables are in the vanguard of a movement that could save CIOs US$950bn by 2020.

The NUI Maynooth-based Innovation Value Institute (IVI) – which has the backing of 50 blue-chip global giants – conducted a research study based on its IT-CMF (capability maturity framework) structure on six global oil and gas companies. The IVI was founded in 2006 by Intel, the Boston Consulting Group and NUI Maynooth and is rolling out the IT-CMF as the IT industry’s equivalent of an MBA. So far, 300 CIOs and IT managers from around the world are engaged in the programme.

The study of six global energy giants found that organisation with a higher IT-CMF maturity were 33pc more efficient than the peer average in overall IT spend and 44pc more efficient in IT infrastructure spend per supported user.

Sustainable IT policy has the potential to realise savings of almost US$950bn for global business by 2020, but left unchecked the rising cost of energy could drive a 20-30pc increase in IT spend, equivalent to US$450bn, over the next five years.

The ICT industry’s move to sustainable IT

IVI co-director Brian Donnellan told Siliconrepublic.com: “Energy issues are high on people’s agendas. The move towards sustainable IT is very much industry driven. Leading companies like Intel, Microsoft and SAP have established progressive positions on how to manage energy costs and leverage this with intellectual capital.”

IVI has launched Sustainable ICT (SICT) as one of the IT-CMF’s critical processes. A number of consortium members, including Intel, Microsoft, ESB and Mainstream Renewable Power reported on their adoption of SICT and the benefits realised over the past 18 months.

Director of Intel Labs Europe and IVI director Prof Martin Curley said SICT represented a “landmark opportunity for ICT to take its seat firmly at the boardroom table” and for CIOs to effect change and drive business within their organisations.

“The greening of IT, and the greening of industry by IT both represent fundamental shifts in the way our society is structuring itself for the 21st century. It is our belief at IVI that ICT can prove itself, not just as a cost centre, but as a measurable, strategic driver within businesses. The environmental and economic imperatives confronting us today offer an immediate opportunity for ICT to jump to the fore in proving the value it can bring,” Curley said.

Speaking with Siliconrepublic.com, Tom Geraghty, IT governance and strategy manager ESB, explained: “In terms of where the ESB is and where Ireland is in terms of the smart-grid agenda, we have just completed a year-long technical trial of smart metering and a decision is due mid-year from the energy regulator on how we should proceed.

“It will be a complex project when you think about how we go about installing 2m smart meters around Ireland. It will be a complex technical, engineering challenge that has to marry with Ireland’s social agenda.”

Emphasising the IT challenges ahead, Geraghty said that data collection, storage, transfer and billing are the key issues for utility firms. “How you get data back from the electronic metre to a utility central point where it is aggregated and the bill is sent out to simply allowing people to top up their metre at home as if it were a mobile phone shows you the complexity that lies ahead. There are many imaginative options emerging and the opportunities are endless,” Geraghty said.

Geraghty said sustainability is at the heart of ESB’s own corporate strategy. “Within IT we have a three-pronged initiative. There’s IT to support the sustainability agenda, there’s sustainable IT in how manage IT and dispose of it and then there’s sustainability in how staff use ICT at home and at work, using tools like remote working and web conferencing.

“During the recent cold snap, a large percentage of ESB workers were able to continue working from home or remote locations using mobility and remote working technologies.”

Geraghty said much of the work under way around smart metering is both technical and research into future customer behaviour. “Those trials are based on statistical analysis to validate what behaviour will be as a result of certain incentives and stimuli.”

From information to wisdom

Mainstream Renewables, which was set up by former ESB chief executive Eddie O’Connor after he sold a previous firm, Airtricity, to Scottish and Southern Energy for €2bn in 2007, focuses on the development of wind and solar plants in eight locations around the world.

Mainstream’s CIO John Shaw told Siliconrepublic.com that the company has been building its internal IT capability and has relied heavily on the IT-CMF structure.

“We were lucky in our timing and as we laid out our strategy we focused on getting basic service in place. All our internal customers have the same Windows 7 HP laptop and we operate from centralised and virtualised servers, storage area networks and we have disaster-recovery sites in place.

“We have a private cloud architecture and we make extensive use of video conferencing among our very mobile workforce. In fact, video conferencing is replacing email in our company. Email is coming to a bitter end, a few conference calls would help us get to the bottom of a problem really quickly. Email served its purpose but a conversation is infinitely superior.

“We also make good use of managed print services to reduce printing. One of the key steps we have taken is a strategic partnership with vendors. Instead of the classic client-supplier relationship we believe there’s a more sustainable model built on trust. We work with four key ICT strategic partners. Even when we began as a start-up we decided that we would approach companies like Microsoft in a strategic way – to them we are an enterprise-class customer because we took a strategic decision to partner.”

Shaw described Mainstrem’s journey as being about enabling the next phase of business because the smart grid is beginning to happen and tomorrow’s wind farms will be far more digitised.

“Also, people want greener data centres and that means green energy for the data centre.

“But to begin a green strategy, especially a sustainable IT strategy, you need to build sustainable relationships with suppliers, get people to work faster, better and simpler and ensuring that workflows are electronic rather than paper-based.

“Our business is all about sustainability and so the IT component of that technology road map is critical. As we build offshore windfarms, we can’t do that without IT at the table.

“In that sense we constantly ask ourselves: ‘how do we move from data capture to information to knowledge and then to wisdom?’” Shaw said.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years