CIO’s: Why you should green your IT in a downturn

IT is constantly challenged to reduce cost and do more with less. So in a slow economy, should CIO's even consider green IT?

In short, yes. And here's why: If you're not adopting green IT practices, you're likely to be missing out on cost savings that will benefit IT and your broader organisation. As green IT continues its transition from 1.0 (green for IT) to 2.0 (IT for green), the opportunity cost for inaction will increase.

Let's start with the facts. According to recent Forrester survey results, 52 per cent of organisations worldwide are actively implementing or creating a green IT plan - with a healthy with healthy 34 per cent considering green IT. Overwhelmingly the primary motivation for green IT is financial, not environmental. And even in the face of a worsening economic climate, twice as many organisations expect to accelerate their green IT plans than slow them down.

What exactly is this green IT? Forrester prescribes the following: IT suppliers and their corporate customers gaining efficiency and cost savings while reducing the harmful environmental impacts of IT (1.0) and other business process (2.0).

Common projects in the green 1.0 world focus on reducing the environmental impacts and costs of the IT asset lifecycle - from sourcing more energy efficient equipment from vendors, to turning IT "off" when it's not being used (e.g. PC power management), or developing policies to give end-of-life assets a second life through resale or refurbishment. Green IT 2.0 projects leverage IT as an enable of greener business practices - for example, replacing travel with video conferencing or improving fleet delivery routes with supply chain software.

This is all well and good, but CIO's must understand how green IT can generate financial value to secure funding and ensure that time and capital is invested wisely. Here are examples of how green IT 1.0 and 2.0 are delivering organisations financial value today:

Related:

• Green IT 1.0 can reduce IT's own CAPEX, OPEX or both simultaneously. From a CAPEX perspective, green IT can defer or eliminate new capital investments by increasing asset utilisation, extending an asset's useful life, and increasing datacentre space, power and cooling, and capacity. In the realm of OPEX, green IT can reduce ongoing expenses such as power costs, datacentre cooling costs, hardware license fees, and even staffing costs. And certain projects - such as server virtualisation or thin clients - can cut CAPEX and OPEX spending simultaneously. For example, Solvay Pharmaceuticals' 100 virtual machines have translated into hardware savings (CAPEX) of $1.5 million and annual power and cooling (OPEX) savings of $67,000.

* Figure: Green IT Initiatives Have Varying Effects On OPEX And CAPEX *

Green IT Initiatives Have Varying Effects On OPEX And CAPEX

• Green IT 2.0 can reduce broader business spending. While traditional green IT 1.0 projects are effective at reducing IT-associated costs, the positive environmental and financial benefits of green IT 2.0 - or using IT as an enabler of greener business - can be much more profound. Here's a great example. International retail giant Tesco found that IT's contribution to the company's total carbon footprint is only 4 per cent - but that IT has the enabling potential to reduce total carbon footprint by 20 per cent. And the financial rewards for green IT 2.0 invests are compelling. Tesco expects automated building management systems to reduce electricity costs by 20 per cent, and telemetry to monitor delivery driver behaviour and routing to reduce fuel costs by 17 per cent.

As a final thought, when setting a Green IT strategy - especially in volatile economic times - I suggest IT leadership take a similar approach to Google's Commitment to Sustainable Computing which explains: "Sustainability is good for the environment, but it makes good business sense too... It is this economic advantage that makes our efforts truly sustainable."

Forrester's upcoming IT Forum EMEA 2009 is going to focus on just this in a session titled "CIOs: Understanding The Financial Impact Of Green IT."