Green IT initiatives offer a framework for growth, efficiency
As public concern for climate change and sustainable growth intensifies, many midsized organizations are taking a closer look at green IT initiatives—and not just out of regard for the environment. A groundswell of technology advances is collectively contributing to a smarter planet, enabling midsized companies to rethink the way they operate and compete using leaner, more flexible and more resilient computing systems to drive their business. The resulting reductions in energy cost, carbon footprint and management complexity also make it easier to achieve green IT goals than many midsized businesses may imagine.
Computing capabilities once considered the exclusive domain of large enterprises are now mainstream, and midsized companies are investing in intelligent tools that not only help them improve business agility and maintain a competitive edge, but contribute directly to the bottom line. At the same time, these capabilities have led to rising management and hardware costs, burgeoning data volumes and increased energy consumption.
"In the data we've collected, an overwhelming majority [of midsized companies]—71 percent—cited cost reduction as the primary reason to pursue a green IT initiative," explains Russ Klein, vice president and IT research group director for the Aberdeen Group, a division of Harte-Hanks.
While companies can leverage green IT initiatives to cut utility costs, take advantage of local e-policy programs and adhere to environmental laws, making the right decisions up front can have a major impact on future success. An underlying technology framework that is interconnected and instrumented to measure and track results offers new opportunities for innovation and growth. Meanwhile, building intelligence into the technology framework makes it easier to manage the environmental impact of assets, such as computer equipment, facilities and vehicles.
Identifying key performance indicators
By transitioning to a green IT framework, midsized businesses looking to do more with less can benefit from improved business agility, intelligent decision making and a more productive, collaborative workforce.
"We asked midsized companies which key performance indicators they actually use to understand the ROI potential," Klein continues. "Four metrics bubbled to the top and they roughly correspond with pressures. One, and the top one by a wide margin, is cost. Measuring the cost of energy, the cost of waste, the cost of paper, transportation, facilities management and packaging."
The other indicators, Klein says, are the impact of a green IT initiative on customer satisfaction, carbon footprint and, lastly, the company's reputation as a whole.
"We've found that companies that are most mature with green IT initiatives are seeing sometimes as much as four- or five-fold more savings in those areas than peers who don't have green IT initiatives in place," says David Hatch, senior vice president and general manager at the Aberdeen Group.
Green initiatives that result in improved energy efficiency and savings in hardware purchases, system management and support also typically show rapid returns by freeing up staff and budget resources to support projects that add value to the core business. They can also help streamline routine yet mission-critical IT processes, such as data backup and disaster recovery, to help improve reliability and stay responsive to customers 24x7.
For many midsized businesses, growth and new product development depend on leveraging systems that effectively interconnect people and processes to accelerate productivity and efficiency gains. For example, virtualization technology and collaboration tools can help midsized companies advance strategic goals by getting IT to work harder. Simply by understanding where you stand and taking best-practice steps to make improvements, you can begin to see the rewards of green computing initiatives.
Creating your framework for sustainable growth
Green initiatives can benefit midsized companies most in three important areas, lowering costs and reducing power consumption through improved IT efficiency.
Virtualization: The benefits of server and storage virtualization are myriad. Not only does it improve the usage of existing resources, saving space and increasing energy efficiency, but virtualization also makes systems more responsive, simpler to manage and easier to back up, with less downtime and increased overall efficiency.
Energy efficiency: Energy is a key commodity—and energy costs can have a huge impact on margins that are already shrinking. Now more than ever, improving energy efficiency has a direct impact on profitability for midsized companies.
Collaboration: By adopting collaboration tools and policies, companies can downsize their carbon footprint and reduce travel-related costs. Virtual meetings and Web conferencing let people communicate in real time from their preferred location. They also allow people to work from home, improving employee productivity and enabling companies to pick from a larger pool of qualified workers.
"We're finding that midsized companies…are starting to wake up to the notion that a green IT initiative isn't just about making the use of hardware and infrastructure more efficient. It's about making the processes that those technologies enable become more efficient. And that affects every area of the business," Hatch says.
Determining how to get started—and measure results
Nearly one out of two manufacturers, healthcare providers and food and hospitality providers has an environmental policy in place today, according to the IBM worldwide study, "IT energy efficiency for small and mid-size businesses." However, more than one out of four firms interviewed for the study—apart from professional and IT services—could not quantify how much IT contributes to their total energy costs.
Knowing where to start and how to measure and evaluate the benefits of green initiatives can be a major, resource-intensive project by itself. Based on Aberdeen Group research, Klein recommends six activities as essential first steps:
Understanding your ROI timeline is key for cash-strapped companies considering a long-term green IT strategy. To help ensure a rapid return on investment, midsized companies must look at key performance indicators, up-front and indirect costs, savings, and performance improvements possible over time. A useful ROI assessment must include a timeline that shows monthly and annual costs, and should break potential savings down into specific categories such as electricity and headcount.
In an IBM-sponsored study by Info-Tech Research Group, "Green IT: Why Mid-size Companies Are Investing Now," the most popular initiatives across the board included storage consolidation, remote conferencing and telecommuting, all of which enable immediate cost reduction benefits to the business. The report cites companies that have achieved overwhelming success by adopting storage consolidation and server virtualization. In fact, three-quarters of organizations surveyed achieved their number-one objective: to decrease the number of devices running in the server room.
Investing in the future
Green IT is a win-win proposition. Optimized, responsive and energy-efficient systems help reduce the environmental impact of today's industrial world and redefine the way we work to meet evolving business demands. Growth and innovation require that IT systems work harder, and midsized companies are finding that simple changes can lead to big improvements. The signs of a smarter planet are all around us. With more intelligent, better instrumented systems—and the knowledge we gain from a seamlessly interconnected technology framework that underpins them—we can reduce costs and improve the efficiency, productivity and quality of everything from companies to cities.