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Greener IT: the number of computers in use globally is set to hit four billion by 2020. With energy costs increasing, companies have a strong incentive to ensure that they are not sinking money into inefficient technology.

As the world's environmental challenges go, the impact of servers, desktops and printers may not seem particularly important. But the combined contribution of information technology (IT) is significant, and growing fast. As a result, many companies are starting to think about how they can reduce their IT footprint.

IT accounts for approximately two per cent of global carbon dioxide emissions and this is set to rise to three per cent by 2020, according to the Global e-Sustainability Initiative (GeSi), a group representing the UN Environment Programme, the International Telecommunications Union and several leading global companies. IT-related [CO.sub.2] emissions doubled between 2002 and 2007 and are expected to triple by 2020.

One reason is the continuing growth in computer use: there were an estimated 592 million PCs in use in 2002, but GeSI expects this to rise to four billion by the end of the decade.

Any company that cares about climate change therefore has an incentive to consider how IT equipment is designed, organised and bought. Moreover, many have found that there are substantial cost savings to be made from adopting green IT principles - reducing energy and equipment costs and driving greater efficiency in working practices and procedures.

The potential for savings becomes starkly tangible when you consider the inefficiency of the myriad machines in offices and other locations. A typical data centre, for example, is an energy sink, where the power input is simply being used to keep the hardware operating.

"The recession has encouraged companies to think about green IT in terms of its return on investment. It is no longer just about corporate social responsibility," says Rhonda Ascierto, senior green IT analyst at researchers Ovum. "Previously, the driver was good business positioning; now it's about demonstrating return on investment."

Data centres

But what exactly is "green IT" and how can these savings be realised?

Most experts agree that the greatest potential lies in the data centre - the collection of servers companies use to store and distribute data. Many data centres have ballooned in size as computing requirements have grown, leading to significant over-capacity.

A survey by the Green Grid group of well-known IT companies found that one server in ten is a "zombie" machine, essentially redundant, and that there may be as many as 4.4 million such computers worldwide. And an IBM study found that companies, on average, use only six per cent of their Servers' capacity.

Jon Bentley, IBM's smarter energy lead, identifies three main reasons for this. First, departments make decisions based on their own needs, without reference to a wider procurement policy. Second, companies worry about satisfying new IT needs, sometimes forgetting the equipment they already have. Third, IT staff fail to design networks for efficiency, building in applications that share information but place few limits on storage. It is common for companies to have huge amounts of "unstructured" duplicate data sitting on their systems - for example, years of emails.

In addition, many companies have tended to be over-cautious about their "mission-critical" services - the internal ones and those for public consumption - believing that spare IT capacity equates to greater resiliency, says Bentley.

He recommends companies undergo a five-step procedure to align a data centre with actual needs, starting with an assessment of what they already have. "We're astonished when we get the real estate, finance and IT folk together and ask them what they've got and they do not know the answer. The first goal is to understand what you've got," he says. After that, engineers can begin to understand how the centre is configured, how much capacity is being wasted, what services are actually needed and how the architecture can be designed more efficiently.

There are various approaches that IT experts can then take. There is "virtualisation", where a server is partitioned into several "virtual" machines, consolidation, modelling of air flows between machines and eliminating heat loss hot spots - all of these can substantially reduce [CO.sub.2] and cut costs. For example, IBM has consolidated 3,900 servers on 33 mainframes, leading to an 80 per cent fall in energy costs. It has also led to a similar reduction in floor space use, which could in time reduce property charges.

Power management

Bentley says that although data centres offer the greatest opportunity for cost savings (up to 40 per cent of the total) and that most companies have looked to this area first, they are not the only place where companies can hope to reduce costs and improve energy efficiency.

Ascierto says that the PC fleet is often overlooked. "It's astounding how many people don't turn off their computers at night. They think they're going to mess up things they're working on and that their computers won't start up again in the morning. IT departments even think they won't be able to do routine maintenance if the machine is off, which isn't true with the latest power management software."

According to IE, makers of software such as NightWatchman, 44 per cent of UK-based employees fail to shut down their PCs before leaving the office, equating to [pounds sterling]300m a year in wasted energy, or 1.3 million tonnes of C02. Companies can save [pounds sterling]16,800 per year on a fleet of 1,000 PCs, according to the company.

HSBC, one of its clients, expects to save $lm worldwide by installing such software. Parker Hannifin, a US-based maker of motion and control technologies, has already saved $600,000 a year, it says.

Ascierto describes power management software, which simply powers down a computer when it is not in use, as a "no-brainer", something any company can do relatively simply and cheaply. Ovum estimates businesses can save $32 per machine per year after installation. "If you've got thousands of computers, that's a really nice annual saving," she says.

There are also opportunities outside the office. Bentley says IBM is currently working with a major UK retailer to power down its 2,000 point-of-sale machines when stores are closed. Although the extent of savings has not yet been calculated, Bentley again says they could be considerable.

Peripheral benefits

There are also potential savings from reorganising how offices print, scan and photocopy documents. As with the data centre, there has tended to be a proliferation of devices in recent years, driven by the needs of an individual department without an enterprise-wide policy.


UK-based employees who fail to shut down their PCs before leaving the office

[pounds sterling]300m

a year in wasted energy or 1.3 million tonnes of C[0.sub.2]

[pounds sterling]16,800

Saving per year on a fleet of 1,000 PCs

Murray Sherwood, managing director of the green IT consultancy Externus, says companies should think about moving to "multifunction" printers that incorporate printing, copying and faxing, but also allow stricter controls on the level and type of printing by employees.

Reducing the number of units cuts the cost of replacing and supporting the machines, while limits on how much printing staff can do will cut ink and paper costs. "By making it more difficult to print, it makes people less prolific in their output. You can also set machines to print only duplex and non-colour, which can also save quite a lot," he says.

Externus worked with cruise holiday company Carnival to replace 240 printers with 39 multifunction units. In the process, it has reduced printing by 43 per cent, which it estimates will lead to a [pounds sterling]267,000 saving over five years and a 417-tonne reduction in C[0.sub.2] emissions.

Across Carnival's entire green IT programme, which has included a reduction in servers from 150 to just 15, the company hopes to save [pounds sterling]1.4m over five years.

Another emerging green IT area, says Sherwood, is "desktop virtualisation", where applications and data are stored centrally and fed to client machines. This can reduce energy costs because computers do not have their own processing units. The cost of replacing hardware to keep up with software upgrades, such as new versions of Windows, can also be reduced. This is lik. Oely to be used most where limited applications are needed, such as in call centres, says Sherwood.

Wider goals

A survey last year by Ovum of 500 companies found that more than two-thirds of companies had already invested in some form of green IT, while a further nine per cent planned to by 2012. The survey showed a marginally higher adoption in the US than Europe, where legislation (such as the UK's mandatory CRC energy-efficiency scheme) is as much a cost as a driver.

The question for the future, say observers, is how companies will begin to use green IT in other areas. For example, to reorganise or reduce their need for office space. "During the recession we have seen technology used more and more for supporting business processes. Companies were freezing their travel budgets, so we saw more investment in teleconferencing and collaboration systems. These go hand in hand with a more globalised workforce and more flexible working environments," says Daniel Krauss, an analyst at Forrester Research in Germany.

Dorota Oviedo, an analyst at Frost & Sullivan, says collaboration systems such as those that allow work to be carried out on shared documents from different locations can provide the flexibility that employees say they want. "You can increase your employee satisfaction and retain your people easier, and it can help you to reduce office space, which is a scarce resource in Europe."

Although these systems can cost hundreds of thousands of pounds, there is little doubt that standard technologies save money. Tesco, for example, has saved [pounds sterling]14m in travel costs and cut [CO.sub.2] emissions by 2,500 tonnes since introducing video and audio services, according to BT.

Cost is not the only factor, though. A recent WWF survey of 150 large UK firms found that 47 per cent had reduced the number of flights taken by staff in the past two years, while 85 per cent said they did not intend to return to "business as usual" levels in the future. Many cited sustainability as a consideration, as well as improved productivity from having fewer people out of the office.

Given the wealth of evidence about the benefits of green IT, the biggest challenge may not be what to do but how to manage the organisational changes.

Rhonda Ascierto recommends giving the IT department responsibility for reducing costs, with senior managers overseeing what they deliver. "If your IT department is responsible for the energy bill it is a more effective way to reduce costs," she says.

Companies should consider changing the way they make IT procurement decisions. "It is a good idea to factor in the full operational costs of the solution, rather than just the commissioning costs," says IBM's Bentley. "You should also look at enterprise-wide considerations, even if the decision appears to be made at a departmental level."

Sherwood says companies can sometimes be unclear about who is responsible for green IT, with roles split between IT professionals, marketing and green specialists. The best results come when firms get "commitment from all areas of the business" and top-level managers are involved.

You can find out more about CIMA's IT financial management Mastercourse by visiting

The CIM A report, "Green Veneer or Green Revolution?", can be downloaded at
Embodied carbon Footprint from use

2002 0.11 0.43 0.53

2007 0.18 0.64 0.83

2020 0.35 1.08 1.43

CAGR[dagger] +6%

* ICT includes PCs, telecoms networks and devices, printers and data
centres. [dagger]Compounded annual growth rate. Source: 'SMART 2020'
The Climate Group and GeSI.


[dagger][dagger]CAGR by country
9% Rest of the World 9% China 6% Economies in Transition

2002 17 18 11

2007 23 23 12

2020 27 29 10

3% Other industrialised countries 4% OECD Europe

2002 13 16

2007 10 14

2020 7 12

3% US and Canada

2002 25

2007 20

2020 14

* Rest of the world (includes India, Brazil, South Africa, Indonesia
and Egypt).
[dagger]Economies in transition (includes Russia and
non-OECD Eastern European countries). [dagger]Compounded annual growth

Source: 'SMART 2020' The Climate Group and GeSI,

Ben Schiller is a freelance business journalist and former editor of European Business Forum
COPYRIGHT 2011 Chartered Institute of Management Accountants (CIMA)
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2011 Gale, Cengage Learning. All rights reserved.

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Title Annotation:Technology
Author:Schiller, Ben
Publication:Financial Management (UK)
Date:May 1, 2011
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