Leading with Green—Expanding the CIO’s Role in Eco-Efficient Information Technology Adoption Randy Betancourt & Alyssa Farrell

Chapter 4: Leading with Green—Expanding the CIO’s Role in Eco-Efficient Information Technology Adoption
Randy Betancourt & Alyssa Farrell
OVERVIEW
In developing the content for this chapter, the authors conducted a series of interviews with industry experts, practitioners, and consultants. These individuals, drawn from a wide-range of backgrounds and skills, articulated a variety of viewpoints that are woven into this chapter. These contributors include seasoned IT executives, practitioners, and policy experts who all share a common goal: helping the enterprise meet its business requirements for IT performance and availability while profitably achieving enterprise sustainability objectives.[1] Contributions for this chapter’s content were provided via interviews with the following experts: Dr. Daniel Arneman, Greenhouse Gas Specialist for The University of North Carolina at Chapel Hill; Dr. Prajesh Bhattacharya, Data Center Industry Specialist at OSIsoft LLC; Mr. Robert Bonham, Senior IT Director at SAS; Mr. Ray DeCristofaro, Director for Processing Services at The University of North Carolina at Chapel Hill; Mr. Jim Etheridge, Associate Director for Processing Services at The University of North Carolina at Chapel Hill; Ms. Joanna Gordon, Associate Director and Global Leadership Fellow for the World Economic Forum’s Information Technology Industry; Mr. Nicholas Kim, Global Leadership Fellow for the World Economic Forum’s Information Technology Industry; Mr. Rich Lechner, Vice President of Energy and Environment at IBM; Mr. Jim McAdam, Energy Engineer at The University of North Carolina at Chapel Hill; Mr. Stephen Nunn, Global Practice Lead for Infrastructure Consulting and Green IT for Accenture; Mr. Thomas Spiller, Senior Director of International Programs at SAS; and Mr. Jerry Williams, Sustainability Project Director at SAS.
This chapter goes beyond the public and political rhetoric to address the essential Green IT business propositions and describe successful outcomes of an eco-friendly IT, with insights into how the enterprise competently and deliberately begins such a journey to avoid pitfalls and blind alleys along the way. This chapter does not arrive at a checklist of activities, such as implement virtualization, raising data center temperature, and enforcing PC power management policies—issues which are thoroughly addressed in Chapter 5. This chapter articulates best practices that reinforce the CIO’s role as a key executive leader for enterprise sustainability practices. IT know-how and resource management skills are often an under-appreciated enterprise asset as businesses seek to transform into leaner and more productive entities. Each contributor cited three main reasons that CIOs are the obvious executives to drive the Green IT evolution, and in some cases, the business practice revolution involving global sustainability initiatives: (1) broad insights into the enterprise, (2) proficiency in resource management, and (3) deep experiences increasing productivity without significant cost growth.
The first of these reasons relates to the CIO’s strategic role inside the enterprise. Best practice CIOs have established a solid reputation for shifting IT from a cost center to a revenue center, and what better opportunity than Green IT initiatives for driving transformative enterprise processes, as businesses emerge from the near economic meltdown of 2007 to 2009? Now more than ever, enterprises have accelerated efforts to rethink the underlying assumptions that drive business strategy and operations. As one of the few executives who have a view into all lines of enterprise business, the CIO can see, analyze, and understand the totality of enterprise business processes. The CEO of one of the largest banks in the United States once stated that he gets more insight into his business operations from the CIO than from the business executives heading the company’s various lines of business. His reasons: Business executives have to know their functional specialties; the CIO is responsible for knowing all the enterprise functional businesses and the infrastructure that each uses to operate to achieve strategic goals. The CIO’s unique role as an enterprise decision-maker presents tremendous opportunities to the forward-thinking individual! Where’s the waste? Where’s the latency? Where’s the slack? With this broad perspective, the CIO is ideally suited to provide the necessary leadership to identify and enable transformation of dated, wasteful processes into a leaner set of processes. CIOs hold a position of responsibility where these enterprise-wide strategic opportunities carry significant potential for strategic enablement, but they happen infrequently.
This transformative role is widely accepted. In late 2008, The Climate Group conducted research on behalf of the Global eSustainability Initiative (GeSI). The resulting report, “SMART2020: Enabling the Low Carbon Economy in the Information Age,” quantifies the direct emissions from information and communication technologies (ICT) and highlights areas where ICT can enable reductions in other sectors of the economy. “While the [IT] sector plans to significantly step up the energy efficiency of its products and services, ICT’s largest influence will be by enabling energy efficiencies in other sectors, an opportunity that could deliver carbon savings five times larger than the total emissions from the entire ICT sector in 2020.”[2] The second of these reasons relates to the CIO’s skill in developing relevant best practices, such as hardware resource optimization as a case in point. In the mainframe-dominated computing era discussed in Chapter 2, IT established a set of best practices and rigor around driving the efficient utilization of these high-cost, scarce computing resources, known as capacity planning. This discipline required the understanding of resource consumption and how to assign costs and priorities to activities (jobs) in ways that maximized throughput at the best possible costs. Capacity planning is just one of a number of enterprise-wide IT responsibilities for measuring and optimizing resource utilization as part of a more sustainable strategic agenda.
The third of these reasons relates to the CIO’s responsibility for some of the most energy-intensive assets owned by the business. Today’s data centers have a power density between 50 to 100 watts per square foot. Newer designs call for densities in the range of 600 to 1000 watts per square foot.[3] As the demand for IT resources continues to grow, not only do operational expenditures grow, but pressure is then placed on capital expenditures to fund new data center build outs. Left unchecked, data center energy costs will grow to be the second-highest budget item behind labor costs. CIOs remain under enormous pressure to control costs. And given their experiences over the past decade, where IT budgets have been relatively flat, and demand from the business for compute resources have continued to grow, innovation inside the IT organization has helped to close these gaps.
WHAT IS GREEN IT?
The technology industry definition of Green IT too often depends on any given vendor’s latest promotion. Acknowledging that vendors operate in their own economic self-interest, it becomes even more challenging for CIOs to effectively sift though the multitude of promoted benefits when purchasing enterprise hardware, software, and services. Surprisingly, our contributors shared a substantively uniform definition of Green IT. They shared a strong focus on driving continued improvements in energy management, since growing resource demand coupled with volatile energy prices remains a serious economic challenge for CIOs. To help put this into perspective, the Environment Protection Agency estimated the energy consumption of servers and data centers to be at an annual rate of 61 billion kilowatt-hours (kWh) in 2006, which represents 1.5 percent of the total U.S. energy consumption at a cost of $4.5 billion. The federal government’s portion of this consumption was 10 percent.[4] While energy management initiatives and their associated cost and carbon-footprint reduction are a common concern, Green IT encompasses policies relevant to the lifecycle management of enterprise assets, as well as the efficient utilization of existing assets. From the practitioner’s perspective, “going green” means identifying best practices that meet growing resource demands and service level agreements (SLAs) through efficiency gains by both improving server utilization rates and throttling demand.
Contributor Stephen Nunn, Accenture’s Global Practice Lead for Infrastructure Consulting and Green IT, describes the concepts of Green IT along five dimensions:
1. Driving data center energy efficiencies through virtualization and other practices, which orchestrate provisioning of workloads to appropriate resources. This means effectively measuring and increasing server utilization rates.
2. Promoting more effective policy controls for the desktop environment and reducing print demands.
3. Modifying IT procurement processes to take into account factors such as energy efficiency, tax and other economic incentives, product recycling policies, minimized packaging, and other green criteria.
4. Increasing the silicon-footprint to decrease the carbon-footprint. Example initiatives include mobile workforce policies and video-teleconferencing substitutes for travel. The best practice CIO seeks out opportunities to drive business process efficiencies throughout the enterprise.
5. Delivering shareholder value. If an enterprise has a clear agenda on IT and sustainability that encapsulates the elements the other four dimensions, shareholder value is more secure and likely to increase.
Nunn warns that enterprises that continue to operate without strategies that incorporate integrated Green IT initiatives do so to the detriment of brand and profitability. The CIO needs to define what Green IT means for the enterprise and how Green IT fits into enterprise sustainability initiatives. This is the first step in successfully aligning IT with broader enterprise initiatives to reduce energy consumption and greenhouse gas emissions.
WHO CARES ABOUT GREEN IT?
Chapter contributors and secondary research overwhelmingly confirm the need for executive leadership to establish and sustain Green IT objectives. Without executive-level commitment, Green IT initiatives become a series of tactical measures that drive only short-run benefits. In the case of The University of North Carolina at Chapel Hill, Chancellor Holden Thorp has committed the university to carbon neutrality by 2050. Significantly, the university is utilizing the Office of the Chancellor to provide the leadership to reach this long-term goal. The University has had an active sustainability program since 2001, and in 2006 it began focused efforts to measure carbon emissions.[5] As they execute specific projects to instrument, measure, analyze, and optimize energy across the hundreds of buildings in the university’s real-estate portfolio, Greenhouse Gas Specialist Daniel Arneman, Energy Engineer Jim McAdam, and their colleagues see this level of executive support as absolutely essential. Moreover, sustained executive leadership promotes an amplification of stakeholder participation. Arneman and McAdam highlighted the frequency of new ideas for energy reduction and financial savings from a variety of constituents, including students, staff, and faculty. For example, a special project committee on Renewal Energy Policies proposed a bill to add a four dollar per semester fee onto student tuition to fund energy conservation projects. This proposal passed. Not only are the students directly engaged, but they are very likely to carry these attitudes and traits forward into their professional careers as well.
Today’s consumers consult a wealth of information sources before making their purchase decisions. Solid evidence suggests that consumer purchase behaviors are beginning to respond to carbon price signals. A 2009 Financial Times article by Andrew Edgecliffe–Johnson cited a study of 20,000 people by Havas Media in which, “half of [consumers] are willing to pay a 10 percent premium for sustainably produced goods and services despite the pressures of the economic crisis.”[6] To further illustrate how consumer behaviors are altering demand, citizen participation has become a significant driver in holding government agencies accountable for policy directives and regulations. Based in Brussels, Belgium, Thomas Spiller, Senior Director of International Programs at SAS, reports that citizen participation has become a significant driver in holding government agencies accountable for policy directives and regulations. Through a program based in Brussels, Belgium, European Union (EU) citizens have access to a mash-up of maps and real-time feeds for a number of air quality measures. The site allows a real-time, comparative analysis of air quality around the EU.[7] These tools raise citizen consciousness about the impacts and benefits of sustainability efforts.
Regardless of industry, enterprises will come under increasing regulatory scrutiny over Greenhouse Gas (GhG) emissions, further complicated by the myriad of international, governmental, regional, and local regulations and regulatory bodies with oversight responsibilities. EU enterprises are already subject to the Emissions Trading Scheme (ETS). The U.S. House of Representatives passed the American Clean Energy and Security Act (H.R. 2454) on June 26, 2009. In its present form, the Bill contains a series of measures and incentives that mandate major U.S. sources to reduce their carbon admissions 17 percent by 2020 and over 80 percent by 2050, compared to 2005 levels.[8] If carbon allowances were trading today at $50 per ton, this would add $200,000 in additional IT cost for every 1,000 enterprise servers, assuming that the servers in question are energy efficient models less than three years old.
GREEN IT: A QUICKLY MATURING MANAGEMENT DISCIPLINE
Energy conservation and environmental initiatives have become essential elements on the list of CIO responsibilities. This section examines enterprises and CIOs leading green initiatives, with an eye on low-hanging fruit, best practices for measuring energy and carbon, and a glimpse into future innovations that hold tremendous potential.
Leadership
Our panel of expert contributors agreed that an IT organization can be transformed only with clear direction from the CIO. Transformative change means a holistic approach to Green IT—one that integrates planning, purchasing, implementation, usage, maintenance, and disposal. Engagement of employees is critical because new ideas bubble up, and employee support for project implementation becomes more participatory. Individual contributions can reduce IT’s impact on the environment, inside and outside the data center, but tremendous efficiencies are gained when all parties are moving towards a common goal.
Is the CIO the lone wolf in helping to green the enterprise? IT often begins green initiatives in a silo, either because its business model can be self-contained or because other executives cannot yet see the value of enterprise-wide participation in a broader sustainability initiative. Prajesh Bhattacharya, Data Center Industry Specialist at OSIsoft LLC, has found that most organizations focus on Green IT as a silo because the IT industry recognized cost savings of energy efficient systems and data center design before the sustainability movement hit the boardroom. But some of the more-respected companies in the world, including Cisco, have both a corporate initiative and IT-specific green strategies., Bhattacharya suggests that the CIO and IT organization must inform top management about the benefits of going green.
The CIO continues to play a key leadership role in the enterprise that has already adopted a sustainability initiative, where the CIO participates as a subject matter expert on critical internal councils that drive overall enterprise strategy. Research shows that enterprise sustainability initiatives are often directed by the CEO and managed by a chief operating officer or through an entirely new senior executive, the chief sustainability officer. The relationship between Operations and Information Technology is one of dynamic partnership covering all facilities, mobile assets, and data centers at the heart of the enterprise carbon footprint.
The CIO wears two hats with established green enterprise initiatives: (1) promote supportive enterprise initiatives to measure and manage sustainability; (2) measure and validate the IT organization’s performance within all green enterprise initiatives. Accenture’s Stephen Nunn shared a story about a data center consolidation project that his team was managing. The driver of consolidation was cost efficiency. However, the company had declared a goal of becoming carbon neutral. In assessing the future impact on energy and carbon, the consolidation project would reduce carbon emissions below projected levels by 56,000 metric tons over a five-year period. This represented a savings of over $1 million at the current value of carbon credits on the market. The CIO delivered an IT project that made business sense and aligned with the corporate goal of carbon neutrality.
C-Suite executive leadership commitment strengthens the CIO’s ability to execute a Green IT agenda. From university chancellors who sign a carbon neutrality pledge to Fortune 500 companies who pledge emissions reductions goals, an enterprise commitment to a sustainability agenda is vital for facilitating the appropriate IT investments.
Current Practices
A closer look at successful IT investments reveals some common programs and initiatives that make a solid business case for Green IT, regardless of industry or geography. This low-hanging fruit is often the first focus of Green IT initiatives because the return on investment makes business sense for the CIO, regardless of broader enterprise sustainability initiatives.
Power-saving initiatives present the CIO with abundant opportunities to directly cut energy costs. The best practice CIO encourages the enterprise to purchase low-power hardware whenever possible, and when looking to upgrade, put “power-saving capabilities” on the list of purchase criteria.[9] The inclusion of power-oriented criteria in a formal RFP attracts the attention of vendors, and the best practice CIO asks suppliers to disclose toxic substances used in the manufacturing process to address enterprise liabilities as stakeholders become increasingly concerned about the global rise in e-waste. With the advent of the REACH initiative in Europe, this won’t be an unusual information request, and CIOs might find some interesting disparities in otherwise similar IT assets.[10] Tools such as the Environmental Product Electronic Assessment Tool (EPEAT) from the Green Electronics Council and Energy Star from the U.S. EPA help to provide a centralized database of performance ratings for desktops and servers. Energy Star is releasing new standards that rate the energy efficiency of data centers and storage devices. EPEAT seeks to measure the performance of desktops, notebooks, and monitors against environmental attributes using standards established by the Institute of Electrical and Electronics Engineers (IEEE).
Accenture identified five key areas where IT can have a demonstrable impact on reducing energy consumption and broader corporate green agenda:[11] 1. End user working practices. Telework, consolidate shipping, switching off lights, and laptops when not in use
2. Office environment and equipment. Energy-efficient equipment, VoIP, double-sided print features
3. Office infrastructure/data center. Virtualization, server consolidation, distributed computing
4. Procurement. Green supplier selection criteria, asset lifecycle management that includes disposal
5. Corporate citizenship. Manage risk and compliance, communicate performance externally, engage employees
Data center floor design can seem like the clash of art and science in the IT underworld. The organization of hot and cold zones is the ultimate match of form and function, resulting in a finely-tuned machine that is energy efficient and meets service level requirements without being over-provisioned. Data center redesigns can yield tremendous savings, particularly when coupled with consolidation and virtualization projects.
Virtualization has an impact on power and cooling requirements because it changes how and when machines are used. IBM reported that the energy savings gained from server and storage virtualization and consolidation can be further maximized if data center managers adjust their power and cooling infrastructure to accommodate the reduced loads. The cycle of initial reduced load followed by load growth should incorporate adjustments to power and cooling, where there are several approaches for efficiently cooling consolidated loads.[12] SAS Internal Case Study of Innovation and Virtualization
SAS is a leading software supplier for business intelligence and analytics with 2009 revenues of $2.3 billion. Its IT organization, known as Information Systems Division (ISD) supports a wide range of computing infrastructure, including an IBM z9 Enterprise Class mainframe, over 1,000 mid-range UNIX servers (HP, Sun, and IBM), over 5,000 Windows servers, 2,500 virtual servers and approximately 15,000 laptops and desktop devices.
A challenge faced by the business was managing the time-consuming process of demonstrating SAS software to customers and prospects. It was estimated that for every hour of customer-facing presentation time, over 15 hours were consumed in software setup, configuration, and customizations. The estimated cost of each software demonstration to customers was $13,750. In 2005, ISD was given the task of creating a robust, reliable environment available 24/7/365, using industry standard hardware to be utilized by the field support staff for customer-facing software presentations. The environment had to be available to staff operating in over 80 countries worldwide.
In the initial pilot, the virtualized server environment was designed and built to handle up to 50 simultaneous customer-facing presentations. The initial pilot was successful, and the decision was made to move from pilot to production. Moving to production, ISD scaled the environment to meet global demand in 2007. With a production environment, management estimates the cost-per-customer-presentation to have dropped to $5,700. The savings accrue from reduced staff-time on configuration tasks, reduced cooling and energy costs, and a longer laptop hardware refresh cycle, since these devices are no longer part of the software demonstration mix. Asset utilization has increased, and sales support staff costs were reduced by 43 percent.
The Business Case
Experience showed the baseline for virtual machines allocated to a physical server (using IBM System x3950 dual-core 64-bit Xeon Processors MP) to be 11 to 1. Like most IT organizations, ISD decided its risk of failure outweighed the costs of over-provisioning. The production environment was hard-capped at 77 virtual machines. Questions about meeting demand immediately arose. Where are the bottlenecks? And when were the purchases of additional host machines needed?
ISD initiated a capacity plan and collected performance data after the environment moved into production. The capacity plan was developed as a justification for the purchase of additional host machines. ISD decided to focus on performance data drawn from VMware’s Virtual Center. Virtual Center was already used to provide real-time environment management for the environment. ISD used a commercially available SAS solution for performance analysis and optimization because it is already in use to meet capacity analysis needs and forecasting workload demands for the entire compute infrastructure.
After collecting measurement data from VMware’s Virtual Center over a 30-day period, ISD applied a forecast model, anticipating a pattern suggesting resource constraints. Instead, the analysis showed precisely the opposite. As shown in Exhibit 4.1, there was no discernable pattern suggesting resource constraints, other than that the data shows Wednesday as the most popular day to present customer-facing software demonstrations. The data suggested that ISD actually increase the number of virtual machines (VMs) to meet business demands without having to purchase additional physical servers. As a result, ISD avoided the purchase of new server hardware. The number of VMs was increased from 11 to 14 for an increase of 27 percent in capacity without additional expenditures.
Exhibit 4.1: 30-Day Forecast for Virtualized Server Demand
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This case study demonstrates that despite concerns regarding difficulty and time to implement, an IT organization should first determine if a new design innovation will more efficiently solve a capacity problem than simply adding more resources. In this case, virtualizing the environment rather than adding resources not only avoided the need to rebuild the existing presentation portfolio, but also led to a substantial Green IT return on investment (ROI), due to reduced power consumption and data center space. In summary:
• Traditional capacity planning is needed, but combining it with the ability to do real-time analysis and forecasting provides more consumable data for decision-making.
• Being able to defer purchasing additional resources with data to support the decision not only leads to significant business ROI (in the form of dollars and resources not spent for purchasing, installing, and maintaining equipment not needed), but also achieves Green IT goals.
• IT must have good cost information to establish a baseline for comparative analysis.
Measuring Energy and Carbon
Energy consumption and carbon emission measurement practices are related, but not equal, endeavors. Energy consumption is generally measured as the kWh used by a particular stationary or mobile asset. These kWh may be produced by a third-party provider (electric utility) or an on-site power generator, and are typically metered for billing purposes. Most data centers have a power management plan that provides an uninterrupted power supply via battery and generators if the electric supply from the utility should be interrupted. The kWh provided by the batteries and generators may be metered in terms of run-time rather than kWh. An accounting of energy consumption from such sources is therefore an educated estimate.
European countries, Australia, and New Zealand have been some of the first to consider, and in some cases implement, regulations that require enterprises that consume large amounts of power from the public grid to report their consumption and emissions. This is undoubtedly the first step in a reduction scheme that will create incentives to operate more efficiently with less energy. As a result, Stephen Nunn notes that enterprises are starting to become more energy conscious, particularly when reviewing future technology purchases because resource, utility, and petrochemical companies have started their own significant initiatives to measure their customers’ baseline energy consumption and evaluate overall carbon footprint.
While it seems straightforward on the surface, the CIO faces major challenges obtaining data when deciding to measure enterprise IT energy consumption. IT assets are scattered around an organization, and even if one starts with the data center—the hub of IT activity—detailed information may not be available. Most IT organizations are just beginning instrumentation of data center assets, which can be an expensive and lengthy process. According to UNC’s Director for Processing Services, Ray DeCristofaro, CIOs need to have a strong business case to justify upfront costs for detailed metering in the data center. Furthermore, is the IT organization equipped to handle the data once it is received? SAS Senior IT Director Robert Bonham suggests that domain experts who understand power systems don’t have background in analytics, and they will need to acquire these skills. So even if information is gathered, there may be some delay before it can be used for productive decision-making.
Regardless of the upfront costs, contributor Prajesh Bhattacharya emphasizes that a CIO “absolutely should factor in the energy cost as part of the operating cost of the asset. On average, within two years, the cost to run the asset is equal to the initial capital investment.” Bonham agrees, but uses a slightly broader cost evaluation methodology that includes a per-square-foot charge for the space used in the data center and the proportionate cooling required. In the end, the CIO will not take the initiative to aggressively reduce the cost of IT energy consumption without alignment or incentives to proactively measure and manage that consumption. Consequently, the CIO should own the budget for power consumed in the data center and be given the authority to keep and reinvest any savings generated from energy consumption initiatives back into the IT organization. The same can be said about the CIO’s responsibility for measuring and reducing carbon emissions. As the liability for enterprise carbon emissions increases, ownership should reside with the party responsible for the activities that generate greenhouse gas emissions—in terms of both distribution and information technology—and this requires a better understanding about calculating carbon emissions.
The carbon footprint of an IT asset, facility, product, or organization is actually much more than the measurement of carbon dioxide (CO2) alone. It is the measurement of six greenhouse gases (GHGs) listed in the Kyoto Protocol: carbon dioxide (CO2); methane (CH4); nitrous oxide (N2O); hydrofluorocarbons (HFCs); perfluorocarbons (PFCs); and sulphur hexafluoride (SF6). An enterprise carbon footprint is expressed numerically as a carbon equivalent (CO2e), which is the universal unit of measurement to indicate the global warming potential (GWP) of each of the six GHGs, expressed in terms of the GWP of one unit of carbon dioxide.[13] A carbon footprint is a numerical value that can be used to compare similar assets within an enterprise. For example, a CIO may evaluate the CO2e per square foot in a data center in Atlanta, Georgia, with one running in Delhi, India. Aside from kWh consumed, the largest variable in that equation is the source of generated power—the combination of coal-fired plants, nuclear operations, and hydro power or other renewable sources that make up the energy supplied to that facility.
A carbon footprint also has a financial value. As proposed legislation may limit GhG emissions for many companies, enterprises may soon be required to buy the right to emit more than a specified, allowable limit when they cannot find ways to reduce internally, or if those reduction strategies are more costly than the credits available for purchase. Carbon markets have been established in many regions of the world, both voluntary and regulatory. The largest market is the European Union’s Emissions Trading Scheme (EUETS). The value of a carbon future on this market is typically the baseline for most financial models that estimate the carbon cost of an enterprise asset or activity. However, establishing a value for carbon also means being able to assess the impacts of proposed regulations during the lifecycles of various enterprise IT assets. Prajesh Bhattacharya calls this the “political cost of carbon,” which refers to the inherent uncertainty that a CIO faces when determining when, if, or for how long the enterprise will have to pay for the right to emit GHGs for IT infrastructure energy consumption. The team at The University of North Carolina has found that carbon footprinting provides a good means to understand broader impact of electricity and fuel, transportation, and waste. While their planning also attempts to account for the future cost of carbon, the legal landscape is unclear. Financial models evaluate their assumed carbon costs under a variety of proposed U.S. legislation.
Most CIOs today are not factoring a shadow cost of carbon into IT procurement decisions, primarily for two reasons: (1) the IT organization is not able to gather trustworthy data, either internally or from the vendor, and (2) the IT organization is not currently charged for carbon emissions. Bob Bonham at SAS indicated that what IT managers need are the standards for measuring the emissions associated with IT assets so that they can start to include that information in procurement evaluation processes.
To resolve this market uncertainty, enterprises will need to participate and support the legislative development process. A clear decision on carbon regulation is needed to minimize confusion about carbon pricing, and the price signal will force CIOs and their enterprises to make different decisions and develop new strategies, based on new environmental mandates and emissions criteria. Today’s visionary enterprises are already making significant investments that pay off with internal efficiencies, but also by generating new revenue. In fact, GE’s “Ecomagination” business generated a green revenue stream topping $17 billion in 2008, growing at an astounding 21 percent.[14] Future Innovations
Beyond product-level innovations, enterprises and their IT organizations may seek transformative change that radically alters processes and structures to deliver high-quality services with minimal impact on the environment. Along with transformative change, CIOs have adopted new performance measures such as Power Usage Effectiveness (PUE). PUE is a ratio that compares the total power used by a data center (or any IT facility) to the power consumed by its IT equipment. It is a measure of efficiency, so lower ratios indicate higher performance per kilowatt consumed.
In early 2010, Hewlett-Packard (HP) announced the opening of a new data center that takes advantage of innovative technologies to reduce energy and water consumption.[15] As the first ever wind-cooled data center, the operation leverages its location in blustery northeast England to draw in external air through giant intake fans, then filter out any dust and contaminants before circulating it around the server racks. Back-up chillers stand ready to assist for the average 20 hours each year that the external temperate exceeds 75 degrees Fahrenheit. HP has estimated that the extra cost for the natural cooling and backup chillers is about 6 percent above normal building expenses, which will be recouped in under two years due to the anticipated power savings.
The center boasts several other environmentally friendly practices, including a rainwater capture system that can be used to increase the humidity as needed, and low-power requirements due to light-colored server racks. Since lighter colors reflect, the data center designers discovered they could reduce lighting by 40 percent with no impact on visibility. All of these practices combine to make the HP facility perform at an amazingly low PUE of 1.2 percent, meaning that for every 1.2 watts of electricity consumed, 1 watt goes towards powering the IT equipment and the minimal remainder provides the power for cooling and other facility needs.
There are also substantive examples of IT innovations in public applications that can improve our environmental quality. In partnership with the European Environment Agency, Microsoft built a two-way communication platform called Eye on Earth to merge scientific information about water and air quality with an individual’s experience at the street level (see Exhibit 4.2). Users enter their location, and the system returns the official measurements of air pollution in the user’s area. Users can contribute to the rating by submitting remarks and their own rating of the air or water quality. This combination of government-led research and social media can have tremendous impact when city planners are evaluating bus routes or traffic planning. This innovative project involves cities in sustainable decision making and makes it relevant through the contributions of its citizenship.
Exhibit 4.2: Microsoft’s Interactive Environmental Quality Application
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Source: www.eyeonearth.eu/.
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IT applications can also ensure that an enterprise spends its resources wisely by reducing fuel, water, and waste, which each have environmental as well as financial benefits. One example of using analytics to achieve optimal outcomes is Waitrose Grocery in the United Kingdom. Waitrose is an employee-owned company synonymous with quality and variety. They use modeling and predictive analytics from SAS for accurate demand forecasting, reducing stockholding by 8 percent and wastage by 4 percent.[16] Controlling costs is critical in the highly competitive retail market, and innovative IT solutions can help deliver that necessary edge.
COMMON CHALLENGES PRESENTED BY GREEN
The relative immaturity of the Green IT business space is a testament to the significant challenges that enterprises face when planning and executing IT strategies with environmental considerations. Implementing any new technology within an existing infrastructure or modifying service level agreements is no small task. Green IT initiatives challenge the status quo of “business as usual,” and it takes courageous CIO leadership, backed by other C-Suite executives, to make this transformation.
Our expert contributors focused on the challenges in these five areas:
1. Inability to access data
2. Lack of internal domain expertise
3. Complex vendor relationships
4. Constantly evolving standards, or lack thereof
5. Building a financially sound business case
“We must have those figures somewhere!” Evaluating energy and carbon consumption requires actual data, or enough information to make relevant allocations from other data sources. One of the most significant challenges many enterprise IT organizations face is to identify if the necessary data exists and, if it does, who owns it. Prajesh Bhattacharya described this important step as “navigating the organizational maze.” Projects will fail if existing monitoring systems and data owners are not identified and incorporated into the plan.
Once the owner is identified, CIOs may find it surprising that their colleagues are reluctant to share their data about electricity and fuel consumption. While “data hoarders” are not unfamiliar corporate enemies, the dynamics of gathering data for environmental measurement is a unique situation because the data providers are not sure how their information will be used. Will it constrain them in the future? Will they look bad in comparison to other parts of the business? This uncertainty can compound natural aversion to sharing data across organizational silos. In many cases, the data simply may not be available due to lack of monitoring systems in place. The CIO must weigh the cost of implementing such a system with the data management efficiencies and analytical decision support that it will provide.
“Is this really the right approach?” While power and fuel constraints are felt today in many developing economies, the last time that North America and Central Europe were concerned about energy availability was in the 1970s. The workforce that reengineered assembly lines, rationed oil and gas, and streamlined transportation logistics in response to these pressures has mostly retired. Since that time, we have had decades of unbridled growth in computing demand, leading to a focus on delivering services to businesses at any cost, with ill-considered risks. As a result, enterprises and their IT organizations lack the necessary skill set to validate ROI assumptions for important sustainability investment decisions. Financial accountants are retooling their professional experience to focus on carbon accounting, including an understanding of the legislative proposals that would establish a price on emitting greenhouse gases. Operations managers are expanding the scope of data they regularly monitor and manage to include data sources for energy and periodic consumption. As Robert Bonham stated, “There is no substitute for hands-on experience.” If IT organizations lack such internal experience, the CIO must look for opportunities to partner with a trusted domain expert or consulting organization on any project such that knowledge transfer is a key outcome.
“But I thought you said that …” The image of “going green in the data center” has been tarnished by the perception that Green IT is a ploy by hardware vendors to drive a refresh regime into client accounts by positioning more energy efficient hardware. Vendors don’t support this approach any more than CIOs, but it sure makes for catchy advertising and is a relatively simple ROI calculation. While hardware efficiency is one component of a larger sustainable strategy, the benefits of replacing existing hardware must be evaluated alongside other initiatives, such as asset lifecycle management, reuse, and recycling. This is where the vendor relationships can get complex. CIOs must work collaboratively with vendors to develop programs that reduce energy consumption and stay true to their objectives, even if that means new performance-based contracting vehicles or going to other reference sites to see the technology in action.
Sometimes vendors bring new ideas to the table and challenge the conventional wisdom held by CIOs and IT Directors. The University of North Carolina recently raised the data center temperature by 14 degrees after learning that newer hardware can tolerate this environment. The reduction in energy demand has resulted in measurable cost savings. However, the temperature change has become the staff’s scapegoat when hardware fails. The IT Director and vendor have worked together to demonstrate that the failures are unrelated to the change in data center temperature.
Contributor Stephen Nunn insisted that CIOs “move away from all this hardware hype and look across the organization at how IT resources are consumed today.” There are natural opportunities to use existing IT capabilities that optimize process manufacturing jobs or improve transportation routing in the distribution channel—all of which can have a larger net effect on reducing the enterprise carbon footprint than an “IT for IT” project.
“Which number is our baseline?” There must be a common language around measurement standards and protocols for enterprises to learn from each other. Multinational enterprises are also challenged to respond to country-specific reporting guidelines, which may or may not be based on internationally agreed-upon frameworks. Nicholas Kim, Global Leadership Fellow for the World Economic Forum’s Information Technology Industry, shared that there are roughly 343 different protocols just for Smart Grids in the United States. That seems counterintuitive for a program whose mission is to streamline and improve the efficiency of energy delivery systems. Kim’s colleague, Associate Director and Global Leadership Fellow Joanna Gordon agreed, adding “in the absence of standards, how do you measure the benefits received? Just because a new IT project increases the energy consumption, does that mean that the efficiencies gained through reductions in shipping and travel are not valuable? IT has a distinct opportunity to establish standards that allow for the comparison of various outcomes and behavioral changes.”
“Let’s reduce the guesswork and get some real ROI.” A generational shift in our workforce is changing the way CIOs approach the provisioning of information and communication technology and services. As discussed in every chapter of this book, the ecological and marketplace values of a younger generation have pushed senior executives to think differently about eco-efficiency and using technology in new ways, and the anticipated economic benefits will push the C-Suite to adopt new eco-efficient practices. According to IBM’s Vice President of Energy and Environment Jim Lechner, for every dollar saved in IT energy reduction efforts, there can be five to eight dollars saved in additional benefits. For example, in the case of virtualization, additional savings accrue to the organization beyond reducing energy costs, such as lower software licensing costs or reductions in labor costs.
With the exception of a few scientifically-oriented research institutions, enterprises today must address the financial business case associated with any new project or investment. But how do CIOs assess the options, weigh the various benefits, project anticipated outcomes, and communicate all of this in layman’s terms to other C-Suite colleagues? This is a significant challenge, particularly in the emerging area of environmentally friendly programs. There are five steps we have identified to assist a CIO in building an appropriate business case for investment in sustainable information technologies:
1. Know where you are today.
2. Establish (and communicate) a hurdle rate.
3. Assign resources and engage employees.
4. Validate vendor claims (and still discount).
5. Model short term and long-term gains.
As SAS Sustainability Project Director Jerry Williams can attest, it is very important to know enterprise energy consumption before starting to quantify improvements. A project that promises to deliver a 75 percent reduction in energy consumption for a specific IT asset sounds like a no-brainer. Industry experts often estimate that the cost of energy for an IT asset over the course of its lifecycle equals the upfront cost of the capital investment. But what if that asset accounts for less than 5 percent of the IT energy footprint? It would be more prudent to look at projects that can shave 10 percent off the IT organization’s highest energy consumers. Unless CIOs know what drives current energy consumption, they cannot target reductions in areas that make the most financial sense for the business.
Energy consumption is a quantitative value well suited to Web-based dashboard technology, which encourages more frequent tracking and communication of information throughout the organization. All too often, the individuals who pay the energy bill want to track the dollars to budget but not the consumption of KwH or the business value derived from the IT application. A current project underway at the Poste Italiane Group is breaking down energy information silos.[17] Poste Italiane uses software from SAS to analyze energy efficiency in over 250 facilities, including those with the highest energy consumption, such as data processing centers, executive centers and the largest branches. Their analysis has identified best practices, which when implemented, led to immediate reduction in energy consumption and a total 7 percent reduction in CO2 emissions. Future developments involve correcting operation and maintenance behaviors for the systems and indirectly for the buildings.
The next opportunity for a CIO is to establish performance objectives and acceptable ranges of internal rate of return, then communicate these objectives and rates to the rest of the enterprise. Members of the Energy Services and IT Production Operations teams at The University of North Carolina reinforced the importance of communicating this specific information. They argued that staff members take the initiative to submit qualified suggestions that have a high chance of delivering results and being supported in the enterprise when they understand the characteristics of a project that meets funding requirements.
Appropriate resources must be assigned to gather and analyze information for sustainable business cases. An enterprise benefits tremendously by appointing someone as the lead contact for green development. This person is responsible for researching available options and becomes a trusted advisor within the enterprise. There are so many opportunities for matching grant funds, reductions in tax liability, or public-private partnerships. With a dedicated resource, these agents have the initiative to research potential funding sources that might propel some projects within the internal rate of return. Funding for environmentally-related initiatives is a dynamic and quickly evolving market.
In addition to naming a green lead, Jerry Williams advises that the enterprise never move ahead with green initiatives unless employees are on board. “There are passions tied to the environment that are kin to politics and religion.” Establishing employee engagement at the grassroots level reinforces support from the executive boardroom. If a CIO fosters participation from employees at every level of the enterprise, employees become aware of new opportunities, recommend cost-conscious solutions, and know that their ideas will actually get heard.
Next, the CIO must validate the anticipated benefits of the proposed technology. There are multiple paths to this validation, from site visits to custom tests run by the vendor. Prajesh Bhattacharya recommends using the most realistic data available to build the ROI model. CIOs who have monitored data about asset-level consumption from a production site can use this data to predict the performance of the proposed equipment. This is most practical for larger items like pumps, chillers, air handling units, UPS, and those items which have asset level monitoring. For smaller assets like servers and PCs, Dr. Bhattacharya suggests running them in a test environment and gathering data to see how they behave, as opposed to trusting the information on the product label. Even with these tests, Jerry Williams recommends discounting the figures by as much as 50 percent: If a project passes the financial hurdle rate at 50 percent performance, then a CIO can feel confident about moving forward.
Stephen Nunn reminded us that improving the energy efficiency and environmental impact of IT operations is a long-term strategic approach to optimizing the CIO’s green agenda. Many short-term tactical activities, such as desktop virtualization and distributed computing pay immediate benefits. However, they also support a holistic sustainability program for the organization—one that pays off in terms of reduced costs and carbon emissions. As governments increasingly drive low-carbon solutions into the IT industry, Nunn counsels enterprises to invest in internal efficiency programs, so that they have fewer liabilities for carbon emissions in the future. Once enterprises become financially liable for greenhouse gas emissions, the internal hurdle rate for projects (and rate of implementation) will change dramatically.
ROLE OF PUBLIC POLICY
The development and implementation of environmental policies have a direct impact on how CIOs adopt green practices and promote the efficient use of IT throughout the enterprise. In particular, local regulations can create new opportunities for investing in green technologies by making the financial business justification more favorable. The CIO should develop a working relationship with government affairs or public policy experts in the enterprise if public policy is a new management knowledge area. This chapter’s expert contributors reinforced the need for the CIO to understand environmental regulations for four reasons:
1. Prepare for any reporting requirements.
2. Take advantage of qualified tax incentives.
3. Capitalize on new market opportunities for products and services.
4. Provide feedback that improves and refines legislation.
Reporting requirements affect enterprises above thresholds established by the country of operation. In the United States, facilities that exceed 25,000 metric tons (MT) each year of Scope 1 greenhouse gas emissions face regulatory reporting.[18] This is estimated to affect over 13,000 facilities. In the United Kingdom, companies whose electricity consumption exceeded 6,000 megawatt-hours (MWh) during 2008 are required to participate in the CRC Energy Efficiency Scheme (formerly known as the Carbon Reduction Commitment). It operates as a cap-and-trade mechanism, providing a financial incentive to reduce energy use by putting a price on carbon emissions from energy use.[19] As a significant consumer of energy, CIOs are suddenly in the spotlight in these regulated entities.
While regulation may place a reporting burden on enterprises, it may also open new doors for reduced tax liabilities and new markets for products and services. Investments in building control systems, low-energy equipment, renewable energy installations, and alternative fuel products can all qualify for rebate programs and other financial incentives that significantly shorten a project’s payback period. If an enterprise, such as a university or government agency, cannot take advantage of tax reduction benefits, some grant-based programs provide matching funds. Last but not least, look for opportunities to partner with utility providers. They face the direct carbon management regulations discussed earlier and therefore have incentives to work with large electricity consumers to cap demand. Some utilities find it more cost effective to invest in energy-efficient technologies than to build a new power plant. Rich Lechner estimates 800 different incentives programs designed to encourage energy efficiency and sustainable practices in the United States alone.
New regulations also create opportunities for emerging markets and solutions. Government can play a significant role in establishing the right environment that fosters investment. Germany’s renewable energy market is a well-known example of regulation that created the stimulus for new business investments. Tom Spiller described how economic incentives created the wind and solar energy industries, which were nonexistent prior to the establishment of favorable policies. Now Germany is the world leader in alternative energy production, and their citizens have developed skills and competencies in a distinct business area which can be leveraged for companies around the world.
CIOs should remain educated regarding legislative developments to provide input that advances the aim of enterprise and environmental stewardship. With advice from internal government affairs, CIOs should identify a process by which they can stay informed. One way is through local or national trade associations. Most associations have policy committees that monitor various proposed regulations and their impact on membership. CIOs can often follow policy perspectives through the association Web site or in-person meetings.
ROLE OF THE CIO
In May 2003, Nicholas Carr authored an article in the Harvard Business Review with the provocative title, “IT Doesn’t Matter.”[20] He makes the case that information technology has evolved into a commodity similar to the way previous technology revolutions produced innovations such as steam power, railroads, and electrification. In the early stages, these innovations produced competitive advantage. Over time, fewer competitive advantages are afforded to the enterprise that continues to use new IT spending as a competitive advantage. Carr cites research from a 2002 study produced by the consulting firm Alinean. “[It compared the] IT expenditures and the financial results of 7,500 large U.S. companies and discovered that the top performers tended to be among the most tightfisted. The 25 companies that delivered the highest economic returns, for example, spent on average just 0.8 percent of their revenues on IT, while the typical company spent 3.7 percent.” His most relevant conclusion is about the ways that CIO’s role has evolved toward the continuous improvement of financial returns from existing IT assets.
Since 2002, the business and economic challenges for the CIO have only increased. Not only do CIOs manage more complex infrastructures, but given the capital-intensive nature of these assets, CIOs are under increasing pressure to improve returns to the enterprise. Analyst and research firms widely cite inefficient returns from IT investments. For example, one consultancy estimates the average data center facilities utilization at 56 percent owing to the traditional practice of over-provisioning. Even worse is the estimate for average server utilization at 6 percent. In a 2007 joint study with the Uptime Institute, McKinsey reports that, “Data center facilities spending (CapEx and OpEx) is a large, quickly growing and very inefficient portion of the total IT budget in many technology intensive industries, such as financial services and telecommunications. Some intensive data center users will face meaningfully reduced profitability if current trends continue.”[21] The challenges do not end there. For many industries, data centers are one of the largest sources of GHG emissions, and the likelihood of regulatory scrutiny is steadily increasing.
Apart from the impact that man-made activities have on the environment, a robust sustainability agenda provides the opportunity to bring measurable enterprise efficiencies. These increased efficiencies translate into real economic savings and reductions in material consumption. CIOs only have to think about their own enterprise business processes, how and when they were established, and whether they have been sufficiently and recently examined for efficiency improvements. For example, consider a simple commodity, such as road salt used for de-icing highways. For over 50 years, the New York City Department of Transportation has used truck-mounted snow plows as a means to disperse de-icing salts on the Brooklyn Bridge. The city applies salt for obvious safety benefits in a trade-off with the significant corrosion of the iron and steel superstructure. In 1998, the city spent $33.4 million replacing the lower suspended road-deck due to the corrosive effects of repeated salt application.[22] The city also decided that it would “optimize” the de-icing process. A traditional process improvement would have been to accelerate the scheduled purchase of the truck fleet to opt for increased fuel economy. Reasonable, but this would have likely delivered marginal benefits at best. Alternatively, the city began a project to automate delivery of liquid potassium acetate, an effective substitute de-icing compound, to the roadbed during this repair effort. The city installed pipes on both sides of the roadway and is able to remotely activate spraying equipment through a set of nozzles placed near the roadbed. In a series of tests over three winter seasons, the city showed a 61 percent cost reduction by utilizing this automated method over the traditional use of manned trucks. These cost savings do not include the benefits associated with the superstructure no longer subjected to salt corrosion and the resulting increases in duty-cycles.
What do de-icing bridges and IT have in common? According to IBM’s Rich Lechner, IT tools and best practices can be used to make improvements not only in the data center environment, but bring efficiency and sustainability practices to all sorts of environments. He states, “[a]s the world becomes increasingly instrumented and interconnected, the definition of where IT ends and where the physical infrastructure begins will become increasingly blurred.” Not surprisingly, Lechner believes that the “Green IT” label casts the CIO’s enterprise role too narrowly. He believes it is better to think in terms of “Green Infrastructure,” arguing that the scope of CIO responsibilities in today’s global environment extends well beyond improving the efficiencies of data centers and the computing infrastructure: It extends to warehouses, factories, vehicle fleets, and office buildings, to name a few. CIOs also have a responsibility to help the enterprise improve its sustainability efforts by harnessing technology and best practices for non-infrastructure areas such as manufacturing processes, optimizing distribution networks, improving methods for the way people work, product design, and product lifecycle management. Viewed in this light, CIOs have new opportunities to bring innovative and management skills for delivering new value to the enterprise. Driving out costs will continue to be high on CIO agendas; however, development and execution of a comprehensive energy management plan, well beyond just the data center, means delivering leadership and driving innovation. Nicholas Kim summarizes by saying, “[t]his is a way for CIOs to re-demonstrate their importance and value to the organization.”
There remains no doubt that even in the budget-constrained world of IT, executive leadership must drive the broader enterprise sustainability agenda. There are numerous IT opportunities for the CIO to reduce capital and operating expenses, immediately and into the future. The same is true within the broader business of the enterprise. While some Green IT projects may require upfront capital investment costing more than non-green alternatives (purchasing more energy-efficient hardware or introducing a mobile workforce policy), other initiatives like PC power management and duplex printing come at no cost at all aside from a time investment. Coupled with government or utility-sponsored incentive programs that encourage sustainability practices, Green IT projects start to become even more financially attractive.
Exhibit 4.3: Emerging CIO Leadership Roles for Enterprise Sustainability Goals
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For example, in December 2008 under its Non-Residential New Construction Program, Pacific Gas & Electric awarded its largest rebate ever: $1,427,477 to NetApp. NetApp received the rebate as a result of their state-of-the-art new data center design. The utility estimates an annual energy savings of $1,178,000 and a CO2 reduction of 3,391 tons.[23] Exhibit 4.3 lists critical areas where best practice CIOs fulfill their emerging roles in providing leadership for enterprise sustainability goals. These agenda items point to a number of new CIO skill sets. Perhaps even more challenging is the CIO’s role in driving changes in existing business practices. As an example, Rich Lechner observes that few IT organizations attempt to throttle IT resource demand from the business. Like a factory working overtime to produce more widgets (and thus more top-line revenue), it would seem counterintuitive to suggest reducing output. But like many optimization problems, once the data becomes available for analysis, it may turn out that producing fewer widgets and alternatively re-allocating the input resources to manufacturing gizmos may be more profitable. IT must make all the costs for IT resource demands transparent to achieve cost control. This does not mean IT must implement chargeback processes, but enterprise employees need to know the fully-burdened IT costs. Transparency and rigor for understanding and measuring all IT resource costs determines if the organization is a leader or a laggard. To help CIOs meet these challenges, Exhibit 4.4 lists the CIO consultation resources.
Exhibit 4.4: CIO Resources
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RISKS AND COMMON MISTAKES TO AVOID
The main risk for the enterprise CIO and Green IT initiatives is not taking the appropriate, timely actions. Enterprises have less flexibility in devising optimal solutions if they allow regulatory events to drive energy management policies. By delaying efforts to tackle these issues now, CIOs risk that other critical future projects will be crowded out or delayed while the unprepared enterprise responds to regulatory mandates. Rich Lechner warns that there are an estimated 59 jurisdictions around the globe with various carbon reduction schemes. Our expert panel of contributors makes the case that efforts to implement energy, water, and carbon management policies go well beyond meeting simple regulatory reporting requirements. Green IT initiatives offer enterprises opportunities to create new value for customers, shareholders, and employees.
While each IT project has its own set of financial risks, a broader financial risk is not taking advantage of tax benefits and other incentives offered by governments and energy providers. For example, the American Recovery and Reinvestment Act of 2009 offers U.S. businesses numerous tax incentives for eligible projects that meet measurable improvements in energy efficiencies. Many utilities offer financial incentives to businesses that are able to shift energy demands to non-peak hours. Some IT organizations can achieve this by shifting “batch-windows” onto processors in those time zones where non-peak load pricing is in effect. Another risk noted by our contributors is insufficient domain expertise for energy or carbon abatement projects. These gaps include inadequate understanding of necessary resource data and how this data should be analyzed and presented. As previously discussed, a lack of enterprise instrumentation forces repeated manual efforts to acquire such data. This makes data collection expensive. Unreliable data is worse than no data at all; it leads to incorrect decision-making and projects that degrade or make processes sub-optimal.
IT faces serious challenges, both near and long term, when it comes to data collection. Just meeting current business demands, data volume growth is nearly exponential, and collection management practices clearly unsustainable. The Chinese firm Li and Fung, which specializes in retail supply chain optimization, was carrying 100 gigabytes of data daily in its network. Today that volume is 10 times greater.[24] Paradoxically, the increased instrumentation and resulting data from enterprise devices used to measure resource consumption will only add to the deluge. To cope, IT will need to improve its tiered storage strategy, relying more heavily on virtualized storage. In addition to improving utilization of storage assets, the cost growth rate for storage becomes another driver for capturing the fully loaded costs of compute resources and reflects these costs to the enterprise through a chargeback regime. Even if the IT organization deploys a plan to actually chargeback through inter-company transfers, enterprise employees need a detailed understanding of the financial implications of their IT resourcing decisions to help manage demand. Nearly every IT organization has a server virtualization project completed or underway. Initial virtualization efforts provide increases in asset utilization; the risk remains that asset utilization remains sub-optimal without a rigorous capacity planning effort to continue to increase utilization rates.
SUMMARY
Enterprises and their IT organizations in all industries face pressure to measure and report performance on key environmental programs. The CIO plays a significant role in delivering accurate enterprise information, as well as managing the carbon footprint of IT operations. The CIO can also proactively identify opportunities to apply information technology and reduce emissions in other areas of the business. While this might increase the silicon footprint, Stephen Nunn believes these practices can significantly reduce an overall carbon footprint.
Leadership must come from the top. The CIO plays a crucial executive role in driving change within an enterprise. Efforts to improve environmental performance are strengthened when the CIO’s green strategy is aligned with objectives articulated by the CEO and other top executives. Without a broader enterprise sustainability initiative, the CIO has the expertise and responsibility to initiate a cross-organizational program. The rapid maturity of Green IT practices has exposed the common challenges faced by both vendors and end-users. It is therefore imperative that CIOs provide the resources and time to develop a business case for green investments that verifies anticipated savings and considers available incentives.
This is not a time to sit idle. Emerging regulations will soon shine a spotlight on areas of risk in the energy management practices of many enterprises and their IT organizations. Significant opportunities exist to immediately drive performance improvements. By being proactive, the CIO will emerge as one of the most important enterprise leaders in the transformation towards a low-carbon economy.
NOTES
1. The authors wish to express their gratitude to the panel of contributors who offered their valuable time and insights.
2. The Climate Group for GeSI, “SMART2020: Enabling the Low Carbon Economy in the Information Age,” 2008, www.smart2020.org/publications/.
3. Neil Rasmussen, “Guidelines for Specification of Data Center Power Density,” White Paper #120, 2005, www.apcmedia.com/salestools/NRAN-69ANM9_R0_EN.pdf.
4. U.S. Environmental Protection Agency, ENERGY STAR Program, “Report to Congress on Server and Data Center Energy Efficiency, Public Law 109-431,” August 2, 2007, www.energystar.gov/…/EPA_Datacenter_Report_Congress_Final1.pdf.
5. The University of North Carolina at Chapel Hill, 2009 Climate Action Plan, at www.climate.unc.edu/portfolio/cap2009.
6. Andrew Edgecliffe-Johnson, “‘Greenwash’ Hype Fails to Sway Skeptical Consumers,” Financial Times, May 1, 2009, http://74.125.95.132/search?q=cache:ayY_0GReysMJ:search.ft.com/search%3FqueryText%3D%2522social%2520marketing%2522+financial+times+may+1+2009+Andrew+Edgecliffe%E2%80%93Johnson&cd=1&hl=en&ct=clnk&gl=us.
7. www.airqualitynow.eu/comparing_city_details.php?brussels.
8. The American Clean Energy and Security Act (H.R. 2454), Committee on Energy and Commerce, http://energycommerce.house.gov/index.php?option=com_content&view=article&id=1633&catid=155&Itemid=55.
9. Tiffany Maleshefski, “5 Steps to Green IT” eWeek, October 12, 2007, www.eweek.com/c/a/IT-Infrastructure/5-Steps-to-Green-IT/.
10. REACH Regulation gives industry greater responsibility to manage the risks from chemicals and to provide safety information on the substances. Manufacturers and importers will be required to gather information on the properties of their chemical substances, which will allow their safe handling, and to register the information in a central database run by the European Chemicals Agency (ECHA) in Helsinki, http://ec.europa.eu/environment/chemicals/reach/reach_intro.htm.
11. Stephen Nunn, “How IT can contribute to the environmental agenda across and beyond the business,” Accenture, 2007, www.scribd.com/doc/16272402/Green-IT-Beyond-the-Data-Center.
12. Tom Brey, “Impact of Virtualization on Data Center Physical Infrastructure,” IBM Operations Work Group, January 27, 2010, www.thegreengrid.org/…/EffectsofVirtualizationonDataCenterPhysicalInfrastructure.ashx?.
13. See “The Greenhouse Gas Protocol: Corporate Accounting and Reporting Standard, Revised edition,” April, 2004, www.ghgprotocol.org/standards/publications.
14. “GE Ecomagination Revenue Grows 21% to $17B,” Environmental Leader, May 27, 2009, www.environmentalleader.com/2009/05/27/ge-ecomagination-revenue-grows-21-to-17b/.
15. Jeremy Kirk, “HP Opens First Ever Wind-Cooled Data Center,” InfoWorld, February 10, 2010, www.infoworld.com/d/green-it/hp-opens-first-ever-wind-cooled-data-center-831.
16. “Waitrose Improves Stockholding, Reduces Waste,” www.sas.com/success/Waitrose.html.
17. “Poste Italiane Group: A Handful of Data, a Lot of Energy Savings, www.sas.com/success/poste.html.
18. Scope 1 emissions are also known as “Direct GhG emissions.” They are emissions from sources that are owned or controlled by the reporting company. They are primarily the result of power generation, transportation, and biological or chemical processes. Scope 1 emissions do not include purchased electricity.
19. “CRC Energy Efficiency Scheme,” http://www.decc.gov.uk/en/content/cms/what_we_do/lc_uk/crc/crc.aspx.
20. Nicholas Carr, “IT Doesn’t Matter,” Harvard Business Review, May 2003, pages 41–49.
21. McKinsey & Company, “Revolutionizing Data Center Efficiency,” May 7, 2008, www.mckinsey.com/clientservice/bto/pointofview/revolutionizing.asp.
22. Brandon L. Ward, Project Manager, “Evaluation of a Fixed Anti-Icing Spray Technology (FAST) System,” 2002, New York City Department of Transportation, Division of Bridges, ops.fhwa.dot.gov/Weather/best_practices/NYCDOTanti-icingSys.pdf.
23. PG&E for Data Center Energy Efficiency, “NetApp Receives $1.4 Million Rebate,” www.netapp.com/us/company/news/news-rel-20081208.html.
24. “The Data Deluge,” The Economist, London, Feb 27, 2010, Vol. 394, Issue 8671, pg. 11.