In Search of Green IT Governance

In a world where climate change is becoming a key concern, private and public companies are increasingly aware that they have to become greener. This also applies to IT departments. Up till now, IT has been perceived as being “clean.” With the increased attention for ecological concerns, however, management has come to realize that IT is not as environmentally friendly as they thought. Gartner estimates that global Information and Communications Technology (ICT) usage accounts for approximately 2 percent of all global carbon dioxide (CO2) emissions. To put this into perspective, this figure is equivalent to all CO2 emissions caused by aviation. Despite the overall environmental value of IT, Gartner believes this is unsustainable.

CO2 emissions of ICT result from the use of PCs, servers, cooling, fixed and mobile telephony, networks, office telecommunications and printers. But the impact of ICT on the environment is broader than CO2 emissions alone. The environment is also impacted by chemicals and waste resulting from the disposal of equipment, polluting the soil with cadmium and mercury.

The future does not look very promising. The energy use of data centers is expected to rise considerably in the coming years and this also impacts the IT budget. Garner found out that currently, “most large enterprise IT organizations spend approximately 5 percent of their total IT budgets on energy and this could rise by two to three times within five years.”

Trends like these will have a major impact on IT departments, forcing them to re-think the way ICT is managed and governed. Green IT is becoming more and more a corporate social responsibility. The issue is no longer about whether a company needs to care of Green IT but more about the risk associated with doing nothing.

So What Do We Do About It?

Until now, the awareness of organizations regarding their CO2 footprint has been very limited. Slowly but surely, however, companies are beginning to recognize its importance. Some companies like Norwich Union and HSBC, for instance, have started to include green objectives and even key performance indicators in their Annual Report or Corporate Social Responsibility reporting.

Also at the IT side, the market for green technology is starting to pick up. IT departments have started to realize that a dramatic decrease of energy usage and hence, the associated cost, can be achieved by restructuring the ICT infrastructure. In practice, the capacity used by a typical server or PC is configured to be able to deal with peak loads. Research shows that a server often only utilizes between 5 and 15 percent of its capacity to service one application. This is highly inefficient. In order to optimize the capacity of infrastructure hosted by the data centers, solutions like centralization and virtualization are now gaining increased popularity.

Although the Return On Investment (ROI) of centralization and virtualization is said to be very positive, a considerable initial investment remains necessary. Companies with less ambitious plans are therefore beginning to implement quick wins that require a lower investment. Typical examples include switching off unused equipment, cooling optimization and enabling energy saving modes for PCs, servers and related devices (printers, lighting, etc.). For example, by switching computers off at night and on weekends, energy consumption can be reduced up to 75 percent per year. If monitors are also switched off when not being used (including lunch times, etc), and the standby options are activated, energy consumption can even be reduced up to 90 percent per year.

The Need for Governance

Implementing technical measures is just part of the solution. Green IT not only needs to be implemented, it also needs to be managed and governed. Hence, Green IT is part of overall IT governance. Moreover, Green IT also touches upon various aspects of corporate governance. Energy policies and HR policies regarding work at home, for instance, will likely be drafted at a company level and are not IT specific. The same holds for awareness creation among employees, concluding strategic partnerships, and similar measures.

Although no common definition of Green IT exists to date, we define Green IT as “the holistic approach to environmentally friendly, sustainable governance and management of the organization (business and IT), its processes and projects.”

Given the need to manage and govern Green IT, we need to take into consideration the impact of Green IT at a higher tactical and strategic level. This is depicted in the figure below. When taking the CobiT/Val IT framework for IT governance as a sample framework, we see that all IT governance elements are affected by Green IT.

Click here for full-sized graphic.

1. Strategic Alignment

Green IT initiatives must be part of the bigger picture. They need to be incorporated as part of the IT strategy, in alignment with business and corporate strategies and initiatives. Green IT goes beyond the traditional boundaries of IT since it also encompasses equipment typically managed by a facilities department like lighting and central printing. Also, initiatives to reduce travel time by stimulating work at home, videoconferencing, etc. are not core IT initiatives but ICT is obviously impacted by them.

2. Value Delivery

Finally, IT adds value to the business. Quick wins lead to direct and measurable cost savings. IT investments in infrastructure reorganization will bring a significant positive ROI. Virtualization for instance, can deliver a 40 to 75 percent one-time saving on equipment and up to 50 percent in ongoing operating expenses. Introducing videoconferencing or policies to work at home may lead to considerable cost savings resulting from reduced to business travel. Other than cost savings, Green IT also adds value to the brand image of the company and as such, might be interesting input for reporting to shareholders.

3. Resource Management

Resource management in the broad sense comprises various elements including:

• Organization Management
• Portfolio Management
• Third Party / Service Level Management
• Equipment Life Cycle Management

As for Organization Management, Green IT will be sufficiently large in the future to consider attributing this task to a dedicated person. He or she might act as a green ambassador.

Green IT also affects the way projects and programs are being managed. The various Green IT initiatives in the portfolio will have to be aligned.

Green IT will be part of many IT projects since in many projects, IT departments are working together with third parties (e.g. outsourcers or hardware/software suppliers). In the future, the typical buying criteria will include criteria on Green IT, embedded in Green Requests for Proposals (RFPs).

As such, cooperation with and management of green third parties will become a topic on its own. It is likely that it will even go as far as defining green key performance indicators as part of the SLA concluded with the third party.

Finally, a key element of Resource Management is what is commonly being referred to as Equipment Life Cycle Management. The life cycle of equipment needs to be managed, starting from purchasing up to usage and finally disposal. Elements to be managed include selecting green suppliers, efficient use of the data center (although this is merely operational rather than at the tactical/strategic level) and managing waste reduction.

4. Risk Management

As with any IT project or IT investment, implementing Green IT is about balancing risk versus return. For each Green IT initiative, one will have to consider the risk and the potential benefit of implementation.

A second element of risk management is the legislative one. Currently, some EU Directives have already been issued about the disposal of waste and on the use of hazardous substances in manufacturing. It is likely that more regulations will be introduced in the near future. This risk of non-compliance needs to be managed pro-actively.

5. Performance Measurement

Performance measurement and performance management are the basis for sustainable Green IT adoption. Being able to measure the current and future status of Green IT will allow an organization to monitor progress and to take corrective actions when necessary.

Measurement of Green IT comprises both quantitative and qualitative measures. Quantitative measures are mainly derived from operational data such as the energy usage of the data centre. Applying quantitative measures allows for simulation of the impact of certain Green IT initiatives on energy usage and associated cost savings. Qualitative measures, however, are equally important and should complement the quantitative measures. These may include the level of awareness, the adoption of Green IT in a formal strategy, the appointment of a Green IT ambassador, and so on. Measures may be expressed in key performance indicators which, in turn, can be used in SLAs or management dashboards.

Recent studies emphasize that managing Green IT at an operational level alone will not be sufficient. Info-Tech, for example, expects the following trends to emerge in the near term:

• “Growing budgets for green IT initiatives. One of the major challenges in going green is that, in most cases, power costs are not part of the IT budget, reducing the motivation for IT to make green decisions. As energy conservation becomes an enterprise-wide initiative, IT will also receive internal budget incentives for purchasing equipment that meets target efficiency levels.
• “Green sourcing. Enterprise IT departments can expect green considerations in RFPs to become more and more prevalent.”

This underlines the importance of implementing decent Green IT governance.

Benefits of Green IT

If Green IT is implemented effectively, an organization is likely to achieve benefits in multiple domains. First of all, the IT department contributes to a reduced CO2 footprint and a reduced level of waste and pollution.

Secondly, it creates a competitive advantage. On the supply side, one will be considered as a Green IT partner. On the demand side, one will satisfy its customer since the IT department is meeting the customer’s expectations. It is a fact that intense media coverage has contributed to making “environmentalists” out of millions of customers worldwide, which is beginning to affect consumer and business buying decisions.

Taking this one step further, Green IT might ultimately influence the shareholder and the shareholder value since Green IT also adds value to the brand image of the company as a whole. As such, it also creates a positive contribution to the corporate governance of the organization. The organization gets a green image which influences the attitude of employees as well as potential future recruits.

Finally, as indicated earlier, a well set-up Green IT department will reap direct cost savings and is able to deliver value to the business. Data center optimization efforts will result in a higher efficiency of the data center and will make it more manageable. Taking all these factors into account, in the long run, Green IT may even become a competitive differentiator.

The Next Steps

The first step to take is to get commitment from top management. If top management is not convinced of the need for Green IT, the chances of succeeding are limited. Green IT is a strategic initiative and that starts with senior executive sponsorship.

Secondly, ownership for Green IT will need to be attributed. Someone will need to take the lead and coordinate the Green IT initiatives. This person will need to be responsible for its implementation and will need to report to senior management, who is ultimately accountable for its implementation.

If that is in place, the next step is to know where you are. This is the time to measure the current level of Green IT within the organization. This can be done by performing a Green IT quick scan or, one step further, a detailed assessment on some of the Green IT domains. Note that such an assessment is broader than measuring the efficiency of the infrastructure and also includes the IT governance aspects discussed above.

Based on the assessment, one has to identify an action plan or a road map in which the points of improvement are addressed. This will most probably be a combination of quick wins and one or more structural projects, complemented by training and awareness creation among employees. The latter is not to be neglected. Green IT requires a common green attitude and behavior, backed by green senior management sponsorship.

Finally, it is necessary to measure progress and to adapt the road map accordingly. The implementation of sustainable Green IT is a continuous process which needs to be embedded in the organization.

Corné de Graaf is senior manager at Adjugo, a strategic ICT consultancy firm based in Brussels. Adjugo specializes in IT governance, IT process & project improvement and Green IT. Its new website devoted to these issues can be reached at green-ict.com. Prior to Adjugo, Corné worked as a senior manager at Ernst & Young Technology & Security Risk Services in Brussels, in the area of IT Governance, Financial Services and Risk Management.

Worker photo licensed under the Creative Commons by borabora.