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Green IT Strategies: Drivers, Dimensions, and Goals ◾ 57

the leaders and those in charge of the green transformation. Therefore, this is a primary dimen- sion along which green transformation occurs in an organization. These include the cost-benefit analysis, as well as financial ROI metrics—as depicted earlier in Figure 2.7. Figure 2.7 further highlights the stark reality of environmental approaches by an organization. When asked in the Trivedi and Unhelkar (2010) survey as to whether green policies are taken up by organizations in order to increase their financial bottom line, close to 35% “Agreed” and 30% “Strongly Agreed” (a

• Green BPM • Collaborative Process Optimization • Reporting (Metrics)

• Attitude • Green HR • Education/Training

• Hardware (Networks, Data Centre, Monitors] • Environmental Intelligence (Cloud, Applications)

• Cost Benefit Profit • ROI on Green • Non-Compliance Costs (Legal)

Economic Technical

ProcessPeople

Figure 2.10 Economy, people, processes, and technology dimensions in an ERBS.

Drivers &

Dimensions of ERBS

Continuous Improvement

Monitoring Drivers / Factors

E R B S

[Green Enterprise Transformation]

ERBS Policies & Practices

ERBS & Green ICT

ERBS Systems

and Support

Environmental Intelligence (EI) Implementation

Green Data

(Warehouses)

Green Information (Analysis)

Green Processes (Models,

Reporting)

Green Knowledge

(Correlations)

IS O

1 40

Intelligent Use of all Available Resources in a from a Sustainability Viewpoint in a Strategic Manner to bring about a Green/Sustainable Enterprise with Continuous

Improvement

Figure 2.11 Drivers and Factors lead to an ERBS.

Unhelkar, Bhuvan. Green IT Strategies and Applications : Using Environmental Intelligence, Chapman and Hall/CRC, 2016. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/apus/detail.action?docID=767875. Created from apus on 2018-07-02 07:39:46.

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58 ◾ Green IT Strategies and Applications

total of 65% above the neutral line). These data underscore the arguments throughout this book— that unless environmental initiatives are coupled with economic performance, the motivation to undertake ERBS is much reduced.

Economic growth in the current economy is usually associated with increase in carbon emis- sions. This is particularly true of the developing economies, where all the industries are on the rise—leading to increase in emissions across the board and not just restricted to a particular orga- nization. For example, this economic dimensions brings friction between the “developed” and the “developing” worlds—as was evident in the Copenhagen summit completed in December 2009. The dichotomy between the developed world’s consumption of resources and their demand for the BRIC nations (Brazil, Russia, India, and China) to undertake their share toward conserving the environment for the future can lead to economic and legal quagmire.

This is particularly so because the consumption of resources and corresponding GHG gen- eration does not appear to be equitable across the globe. Should a uniform regulation on car- bon emissions reduction be applied globally, it would take away resources and growth potential from the aforementioned developing economies. However, not reducing carbon emissions will harm the future generations globally and is not sustainable. Thus, the economic dimension for green business transformation is fraught with challenges for the single organization, a consortium within an industry, and with entire nations. Additional discussion on this dimension appears in Chapter 3—especially on the economic impact of policies and vice versa.

Technologies Technologies primarily include the hardware, network infrastructure, software, and applications within the organization. These technologies are summarized in Figure 2.12. This is also the more “popular” and visible aspect of Green IT. Switching off monitors, virtualization of servers, and eschew- ing printing on physical paper are the initial, visible aspect of change that occurs along this dimension. This is then followed by the long-term strategic change in the way the data center is organized (includ- ing its physical building, the rack system, and the actual servers themselves) and operated. Emerging technologies, such as Service orientation, SaaS, and Cloud computing take this dimension to the next level—leading up to what is called “Environmental Intelligence.” These technological aspects of Green IT changes are discussed later (particularly Chapters 4 and 6) in this book.

The technical dimension presents challenges in terms of the size and position of the organiza- tion. For example, small and medium enterprises (SMEs) tend to have a different approach to the technical dimensions as compared to large multinational technology producing vendors and con- glomerates (Marmaridis and Unhelkar, 2011). What in the SME space is heralded as technologically innovative and new may actually have been around at the enterprise space for years. For example, virtualization, which is considered a “given” for most large organization, may have just appeared in a small business—perhaps only as a desktop virtualization. Thus, in the technical dimension, large enterprises can make significant inroads toward their Green IT accomplishments through server consolidation and energy-efficient data center technologies, whilst smaller businesses may not able to achieve the same rate of change because they do not use that many servers or rely on data center’s for their hosting. In such cases, SaaS-based solutions that are now rapidly emerging may provide excellent opportunities for small businesses to shift their hardware/operating costs and carbon gen- eration over to the SaaS vendors. SaaS-based information technology solutions will make informa- tion readily accessible while leveraging data center cooling and power consumption efficiencies and do away with up-front capital costs for purchasing hardware servers to run from their premises. There is also a direct correlation between turning away from desktop computers to using laptops

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Green IT Strategies: Drivers, Dimensions, and Goals ◾ 59

and other mobile or portable devices and moving closer to Green IT. This dimension of Green IT transformation is thus affected by more than one of the drivers discussed previously—particularly rules and regulations and responsible ecosystem. The introduction of eco-friendly technologies and technical management practices sees the organization comply with rules and regulations measur- ing power consumption. On the other hand, lowering the organization’s carbon footprint through intelligent application of technology and greener infrastructure helps the organization further com- ply in the context of responsible business within its ecosystem of operation.

Processes The process dimension of an organization deals with “how” things are done within an organiza- tion. Figure 2.10 lists Green BPM, Collaborative business process optimization and reporting (with metrics) as some of the key elements of process aspect of an environmental strategy. Green BPM (discussed in detail in Chapter 5) is made up of process management as well as process reen- gineering. Business process reengineering is the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical, contemporary measures of perfor- mance such as cost, quality, service, and speed (Hammer and Champy, 1993). The need to reengi- neer the business operations, process, and services according to the environmental para meters has also been highlighted by Murugesan (2008). Herein, an organization model studies and optimizes

ERBS

Buildings

Data Centres

Education and Training

(Attitude and Culture)

Technology (Hardware/ Servers/Net

work) Upgrades Applications

/Systems upgrades

Green Process

Reengineering

Green Metrics &

Measurements

Legal Compliance

Figure 2.12 Various areas of influence of a ERBS.

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60 ◾ Green IT Strategies and Applications

its processes in order to improve its green credentials. This work is made up of optimizing exist- ing processes and that of introducing new green-aware processes that will not only reduce carbon emissions but also enhance customer experience (e.g., Aronson, 2008).

The process dimension of an organization remains as perhaps the most visible one and it is often used to judge the level of ecological responsibility for Green ICT of the organization. This is because the process dimension has immediate and measurable effects to the carbon footprint of the business operation. It also has far-reaching effects on clients, vendors, and business partners in the collaboration. The process carbon footprint and compliance for Green ICT operations by other business partners can serve as a good proxy for measuring the effectiveness of Green ICT initiatives within the organization.

In addition to the need for optimizing the business processes themselves, there is also a need to pay attention, in this dimension to the internal, support processes. For example, organizations that are in the business of banking, insurance, airlines, or hospitals have a need to organize their support and maintenance processes around their IT assets and infrastructure. Therefore, support processes such as those called upon when a user machine breaks down, need to be considered in light of their overheads and corresponding carbon generation within the organization. Proactive maintenance of devices and systems, outsourcing of noncore service function, precautionary actions such as installation of antiviruses and antispam, can all contribute to optimized support processes and reduced carbon generation.

People This is the most difficult and most complex dimension of a green enterprise transformation. While the people aspect of an organization’s behavior has been studied to in great depths, in this discussion the focus is on the attitudes of individuals and the sociocultural setup in which they operate in the context of the environment. The same sociocultural driver that drives the organization toward Green IT also provides the challenge when the organization actually undertakes that transformation. In addition to the individual employee and, also, the customer at the grassroot level, there is a significant challenge in this people dimension when it comes to business leadership for Green IT transformation.

An enterprise-wide green strategy is best driven from the top of the organization in order to ensure its success. Leadership within this people aspect, such as that by senior directors and CxOs, plays a decider in an environmental initiative. The involvement of senior management in bringing about a change in this people dimension is vital—and it has to be done at an early stage of a green initiative. Making the key stakeholders fully aware of the importance of the green initiative for the organization and, through them, promoting the initiative to bring about fundamental change in the attitudes is the key to work in this dimension. While such involvement from the senior leader- ship requires substantial commitment in terms of time, money, and other resources (as discussed earlier in the economic dimension), still the attitude and the subjective viewpoints of people play an equally major role in the success of a Green IT project.

People thus become a major differentiator between two organizations with similar drivers for sustainability. Organization of teams for the Green IT project and further effect of the CGO’s mindset on the project are discussed in Chapters 3 and 8. Finally, people also need to be consid- ered by large organizations in terms of attracting new talents. It is not uncommon for the bright MBA graduate to select and choose to work for an organization that boasts high green credentials than only a good workplace. Thus far, the discussion in this chapter has been on the drivers and the dimensions for Green IT transformation. These drivers and the dimensions under which the transformation takes place are discussed from the viewpoint of their core characteristics.

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Green IT Strategies: Drivers, Dimensions, and Goals ◾ 61

Finally, in this discussion, it is worth reiterating that there is no single driver, dimensions, or Green IT strategy that will fit all organizations. Figure 2.11 shows a comprehensive view of the drivers and dimensions leading to a comprehensive ERBS. The policies, systems and support providing basis for what is called Environmental Intelligence (EI) (Trivedi and Unhelkar, 2009). The data, information, process and knowledge aspect of Green IT are also integral to the ERBS as shown in Figure 2.11. Although the earlier discussion has distilled the commonalities in these aspects of a strategy, still organizations need to identify, develop, and implement their own spe- cific short- and long-term green strategies. Thus, these various aforementioned aspects of Green IT drivers and dimensions vary depending on the industry sector and the size (small or large) and type (product or service) of the organization. These aspects of Green IT drivers are applied in different combination and with varying emphasis. The case studies, later in this book, attempt to highlight these differences in the way the drivers and dimensions are interpreted and applied to Green IT. Table 2.2 lists the major Green IT considerations for different organization types—with examples of corresponding industry sectors in which these organizations exist.

Table 2.3 lists some of the nuances of Green IT strategies when it comes to specific industry verticals. Each industry sector listed in Table 2.3 has its own variation to Green IT depending on whether it is a product, service, or infrastructure organizations. Similarly, size and location of organizations bring variations in their Green IT strategies.

Developing an ERBS An ERBS is the result of the strategic vision of the organization’s leadership. In the context of this discussion, this ERBS aims for strategies that will be relevant in a 3–5-year time period. Developing such a strategic vision refers to what the leaders of the enterprise would expect it to look like in the future (Lan and Unhelkar, 2005). In the context of green strategies, this ideal image, made up of expectations and goals of the organization,

Wills (2009) has applied the lean approach to the greening approach under the aegis of what is called Green-Stream Mapping (Wills, 2009). Those environmental consid- erations include seven areas of focus that are derived from the International Standard of Sustainability Reporting: Energy, Water, Materials, Garbage, Travel/Transportation Emissions and Effluents, and Biodiversity.

Table 2.2 Organizations Consideration of Green IT Strategies

Type of Organization Major Green IT Consideration

Product (retailers, electronic goods vendors, vendors of consumables, packaging)

Operational carbon (as they don’t have production infrastructure and overheads). The unit of carbon-producing device or product is, however, easier to calculate. Therefore, economy and technology dimensions may be more handy to start with. Furthermore, inventory, supply chains, and distribution processes may assume significance in the Green IT effort.

Service (banks, insurance, education/ healthcare)

People and their attitudes play a crucial role in service-based organizations. Therefore, process and people dimension of transformation become highly significant. Efficiency in processes can have a dramatic impact on the carbon footprint of service- based organizations.

Infrastructure (buildings, telecom)

Architecture and design at the start of the project is a vital consideration. Furthermore, with telecom, improvement and efficiency in communication around the world can be another major contributor to reduction in carbon footprint.

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62 ◾ Green IT Strategies and Applications

Table 2.3 Industry Verticals and Green IT

Industry Verticals and Green IT Nuances

Education—A service industry in which processes are important. Green IT can be used in collecting as well as promoting educational material globally. Online education mechanisms, sharing of online classrooms, and tutorials can provide significant advantage in terms of reduced infrastructure and, therefore, reduced carbon.

Hospital/Medicine—In addition to the processes and people relating to Green IT, attention should also be paid to the fact that major IT revolutions have resulted in high-end medical equipments, which, while saving lives, also contribute to the carbon footprint of the hospitals. These medical equipments, together with the IT systems and support, make up a substantial amount of carbon emissions.

Entertainment—has significant infrastructure as well as operational carbon-costs. For example, most high-carbon emitting equipments such as televisions, cable TV, movies, theaters, and gaming are studded with carbon-generating gadgets. There is a need to calculate the carbon footprint by separating the procurement/ installation, operation, and disposal of equipments.

Finance—Information technologies and systems are heavily used in the financial world, right from providing prices for stocks through to completion of trades. The entire global wealth generation and growth depends on these high-end servers and equally high-end communication equipments that have direct carbon connotations.

Security—In a different, security-conscious new world, the security vertical is replete with electronic gadgets that produce significant carbon. Furthermore, with security gadgets, it is almost mandatory that they operate all 24x7 duration. Therefore, gadgets such as alarm systems in homes, vehicles, business premises, and the associated TV monitoring, recording, and analysis have a tremendous carbon-cost in addition to the actual costs of having and operating these devices.

Telecom—Clearly an infrastructure type of organization, with challenges in terms of procurement and installation of large (and many a times public) infrastructures. The carbon footprints of the installations are much higher than those of the operations. End-user devices and applications supporting telecom business (such as the billing and operational support) also need to be studied from their procurement and operational emissions viewpoint.

Bank—Although a financial services industry, the IT infrastructure and applications used in the banking sector are staggering. Banking vertical is one of the very high emitter of carbon emissions and, as such, requires strategies that span both services and infrastructure aspects of Green IT.

Packaging—A unique product-based industry that is involved in producing and delivering packaging materials in myriad different forms. Reusability and recycling of packaging materials as well as innovative ways of creating packaging is likely to impact environmental sustainability in a major way in this vertical. Green IT can be used as a support mechanism to facilitate optimized production of packaging.

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Green IT Strategies: Drivers, Dimensions, and Goals ◾ 63

provide the primary input for the development of those strategies. This input into the initial envi- sioning process of a green organization is provided by the drivers and dimensions of Green IT. A simple and direct vision, based on the drivers and dimensions translates into the strategic plan. The strategic vision and the ensuing strategic plan should be an actionable plan. Leadership and senior management need to be directly involved in the development of the green strategic vision for their enterprise. This requires them to carefully evaluate the enterprise from its carbon perspective and the trends of the entire future business environment in which the enterprise exists.

While a 3–5-year time period is a good starting point in terms of the impact of the strategic plan, still this period can vary from industry to industry. For instance, the oil industry may have a 10+ year strategic plan, whereas a dress manufacturer in the fashion industry may have only a strategic plan for Green IT that would be current for no more than a couple of years as the contents and expressions in that business sector changes rapidly.

Green IT strategies require due consideration to the resources, knowledge, and skills that are required in the green transformation, as also the current resource utilization in development, pro- duction, services, markets, and sales. Perhaps some indication of what the competitors are doing in the green space may also be of importance, as it may indicate the urgency and importance of action.

Wide-Ranging Considerations in ERBS Development of an ERBS requires due consideration to wide-ranging organizational factors as shown in Figure 2.12. Many of these considerations also appear in the development and imple- mentation of a Lean IT strategy and framework.

Figure 2.12 lists the specific considerations in development of an ERBS. They are as follows:

◾ Buildings and associated infrastructures need to be considered from their initial design and construction viewpoint. There is opportunity for substantial reduction in the emissions of an infrastructure if attention is paid to its initial design and construction from a carbon reduction viewpoint.

◾ Data centers, which are specialized buildings to house data and computing servers as well as network equipments of the organization, require major strategic attention from a car- bon perspective as the impact of such decision in the early stages of a data center are long lasting.

◾ Education and training (attitude and culture) of the staff is of primary concern in devel- oping an ERBS. This would require not only paying attention to the current attitude and understanding the path for change, but also considering green HR that provides support and encouragement for changes to the attitude.

◾ Technology (hardware/servers/network) upgrades that will invariably occur as the organiza- tion prepares strategies for a green transformation. This consideration includes reuse and recycling of existing hardware as well as strategies for replacing it with new, more carbon- efficient hardware.

◾ Applications/systems upgrades need to be considered in two major areas—first, the upgrade of the existing applications and systems to enable incorporation of carbon data within them and, second, to strategize for the new carbon emissions management software that is dedi- cated to collecting, storing, analyzing and reporting only on carbon data.

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64 ◾ Green IT Strategies and Applications

◾ Green process reengineering also includes green business process management (as discussed in Chapter 5). The reengineering strategies need to appear in the overall ERBS in terms of the approach to their identification, modeling, and optimization.

◾ Green metrics and measurements that form part of identifying the “as is” and modeling the “to be” state of the organization (in-depth discussion in Chapter 3).

◾ Legal compliance has to be an integral part of Green IT strategies. Legal requirements can vary from local and state legislations through to carbon legislations at the national level. There are also international consortiums and summits that dictate the legal requirements and need to be incorporated in the ERBS.

The above discussion indicates that a business striving to be green needs to create a compre- hensive strategy that should include these wide-ranging considerations in it. In fact, depending on the type, size, location, and industrial vertical, many more factors will have to be considered in the development of a Green IT strategy.

Rosen et al. (2011) have also suggested factors that need to be considered in developing eco- nomic viability of green initiatives. These include waste management, toxin measurements, water quality, resource usage, recycling and reuse, and product lifecycle impact.

ERBS also requires detailed consideration to environmental intelligence across all factors within it. Thus, the existing business intelligence systems, processes, and contents are extended and refined to handle EI when it comes to implementing ERBS.

Steps in Developing an ERBS After giving due consideration to the wide-ranging factors influencing ERBS, the focus should be on the steps in developing that strategic document. Figure 2.13 shows, at an abstracted level, what are the major phases (steps) in the development of an ERBS.

◾ As mentioned earlier, though, the development of an ERBS requires active participation from the business leadership—including the CEO and the CGO (Chief Green Officer— discussed in Chapter 3). Murugesan (2008) has also highlighted the need to engage with the

Green Business Objectives

Strategy Descriptions

Policy-based Pre-conditions

Resource Requirements

Transformation Plans

Iterations

Dimensions Drivers

Metrics Risks

Figure 2.13 Steps in developing an ERBS.

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Green IT Strategies: Drivers, Dimensions, and Goals ◾ 65

key stakeholders and create awareness of environmental issues in the green strategies for the enterprise. The drivers, dimensions, length and breadth, metrics, and measurements are all required to be embedded in the ERBS.

These major phases in the development of policies and practices (discussed in Chapter 3) and the Green IT transformation roadmap (Chapter 9) are further expanded in the ensuing sections. However, these phases are worth discussing here in terms of what they entail and what resources are required by organizations to undertake these steps.

Green Business Objectives The green business objectives are the core objectives for a business undertaking green transforma- tion. Following are some of the points that can be used to formulate specific green objectives in the development of ERBS:

◾ Ensuring a synergy between the core business objectives and the accompanying green objectives

◾ Length of time for potential application—3–5 years being ideal ◾ Key drivers and dimensions that are impacting the organization ◾ Identify the growth potential and means for returns on green investment ◾ Attention to collaborative opportunities especially at a global level identification of markets

and regions for green products and services globally ◾ Finding the niche where the competitive advantage for the organization lies ◾ Identifying the areas for formal Green IT audits to ascertain the green maturity of the

organization ◾ Development of Green HR as a part of the strategy ◾ Optimization and integration of supply chain systems ◾ Incorporation of government rules and regulations

A SWOT (Strength, Weakness, Opportunity, Threat) analysis can be carried out to further fin- tune the green business objectives. In this regard, the environmental survey (Trivedi and Unhelkar, 2010) quizzed the participants about the current state of their organizations with respect to its green credentials. This current state would give a good indication of the green preparedness of the organization and also an indication of the areas in which efforts need to be focused. The results from that survey are shown in Figure 2.14.

These results can also be interpreted as follows:

◾ Forty-three percent of the participants agreed and close to 26% strongly agreed on the fact that their organizations are aware of the importance of Green metrics. This indicates that there is a significant awareness of the need for specific green metrics when the green business objectives are specified and developed within the ERBS.

◾ Thirty-five percent of the participants agreed and close to 8% strongly agreed on assuming responsibility for its carbon footprints within their organizations. These results also indicate that there are a significant number of respondents who do not believe that their organiza- tions are taking responsibility for its carbon footprint—leading to a primary consideration of responsibility in developing ERBS.

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66 ◾ Green IT Strategies and Applications

◾ Thirty-one percent of the participants agreed and close to 9% strongly agreed on the fact that their organization has a higher power consumption than other similar organizations.

◾ Twenty-six percent of the participants agreed and close to 21% strongly agreed to the fact that they have a person responsible for environmental matters at their organizations.

◾ Nineteen percent of the participants agreed and close to 9% strongly agreed to the fact that they are using devices and/or software to measure carbon emissions in their organizations.

◾ Eighteen percent of the participants agreed and close to 7% strongly agreed on the fact that their organizations are measuring its carbon emissions accurately.

◾ Sixteen percent of the participants agreed and close to 3% strongly agreed to the fact that carbon footprint in their organization is the driver for carbon reduction.

◾ About 29% disagreed-to-strongly disagreed on using or having these green credential in their organizations.

Strategy Descriptions Figure 2.13 shows strategy descriptions as second phase in the development of an ERBS. Describing the green strategy should be done in clear terms and with goals and KPIs that are measur- able. Strategy descriptions include analysis of current business process, consideration to organizational values, and description of underlying IT systems and hardware. For a 3–5-year strategic

Strategy descriptions include specifications of the products and services affected by Green IT, current and anticipated market conditions and customer behavior and sup- plier behavior, spelling out the necessary and required expertise, knowledge, skills and goals/objectives.

12%

17%

12%

10%

17%

28%

31%

35%

33%

38%

19%

20%

23%

13%

18%

31%

35%

18%

26%

43%

19%

21%

26%

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

Has a higher power consumption than other similar organizations

Assumes responsibility for its carbon footprints

Measures its carbon emissions accurately

Has a person responsible for environmental matters

Is aware of the importance of Green metrics

Uses devices and/or software to measure carbon emissions

Strongly Agree Agree Neutral Disagree Strongly Disagree

Figure 2.14 Current state of organization with respect to its green credentials.

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Green IT Strategies: Drivers, Dimensions, and Goals ◾ 67

plan, it is not uncommon for the organization to spend anywhere between 3 and 6 months devel- oping a comprehensive strategy description. Strategy descriptions lead to green enterprise trans- formation projects that influence the organization for between 3 and 5 years. This also requires an understanding of the current strategic plan if it exists.

In the environmental survey (Trivedi and Unhelkar, 2010), the participants have been asked about the green strategies that are formulated to handle these factors at their organizations. The results from that survey are shown in Figure 2.15.

These results can be understood as follows:

◾ Seventy-eight percent of the participants agreed that their organizations anticipated changes to governmental regulations related to carbon emissions.

◾ Fifty-seven percent of the participants agreed that their organizations enhanced the human resource management through green strategies.

◾ Fifty-five percent of the participants agreed that their organizations conducted strategic changes to how the business operates to reduce carbon emissions.

◾ Fifty-two percent of the participants agreed that their organizations elevate corporate repu- tation by adopting green strategies.

◾ Forty-six percent of the participants agreed that their organizations are identifying new market opportunities through adoption of green strategies.

Policy-Based Conditions Develop and implement a Green IT policy that aims to achieve higher utilization of your IT sys- tems while reducing energy use and lessening your other environmental impact. You don’t have to do all at once—adopt a phased approach.

The Green IT policies of an organization are derived from its strategic descriptions. Chapter 3 discusses the development of policies and their practices in great detail. The impact of policies,

51%

55%

78%

0% 50% 100%

Operational (day to day) improvements to

reduce carbon emissions

Strategic changes to how the business

operates to reduce carbon emissions

Anticipate changes to governmental

regulations related to carbon emissions

54%

52%

46%

57%

0% 20% 40% 60%

Improve your risk management with

respect to environment

Elevate corporate reputation by adopting

Green Strategies

Identifying new market opportunities

through adoption of Green Strategies

Enhance human resource management

through Green Strategies

Figure 2.15 Green strategies are formulated to handle the seven organizational (business) factors.

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68 ◾ Green IT Strategies and Applications

however, is not just in their manual practices. Instead, policy-based conditions for Green IT can be embedded in the organization’s service-oriented architecture and protocols. Thus, the policy-based conditions have the opportunity to influence the automation of Green IT imple- mentation. This is an excellent and profitable opportunity for an electronic organization to embed policies within its services, applications, and packages and thereby take lead in Green IT implementations.

Physical development of policies, as discussed in Chapter 3, can be based on the SMART (http:// www.smart2020.org/_assets/files/02_Smart2020Report.pdf—accessed March 16, 2011) approach to green enterprise transformation. In terms of green policies, they need to be SMART—specific, measurable, attainable, realistic, and timely. SMART can be further understood as follows:

◾ Standardize (S) how energy consumption and emissions information can be traced across different processes.

◾ Monitor (M) energy consumption and emissions across the economy in real time, providing the data needed to optimize for energy efficiency.

◾ Accountability (A) with the help of tools and systems. ◾ Redesign (R) based on systems and technologies—that will impact the equipments, materi-

als, processes, and attitudes. ◾ Transform (T) the way we work and play and will do so in a low-carbon economy. This will

be based on a green enterprise transformation plan.

Resource Requirements A green strategic plan has to have a suite of resources that are required to undertake and maintain green transformation. Resources include people, processes, and technologies that engender the green transformation as well as those that are affected by the transformation.

Transformation Plan/Timelines Development of a green enterprise transformation plan is the final and important step in the development of an ERBS. This transformation plan is a project plan that contains tasks, roles, and deliverables together with the timeline for delivery. Chapter 9 discusses in detail the cre- ation of such a transformation plan. Usually, this transformation project plan provides the roadmap for transformation. This plan can be divided into two parts—a high-level roadmap that identifies major areas of work, deliverables, and timelines. This can then be followed by a detailed, task-by-task project plan that makes use of all know project and program management techniques.

Iterations and Risks Figure 2.13 also indicates that the development of an ERBS should not be a unidirectional pro- cess. Instead, it should be developed as an iterative process—going through the drivers, dimen- sions, risks, and metrics more than once. Ideally, there should be three iterations to arrive at the final and comprehensive actionable Green IT plan. These iterations, over a period of 3–6 months, would also include observing the industry trends and new developments with respect to Green IT. The green policies have to be revised based on these trends.

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Green IT Strategies: Drivers, Dimensions, and Goals ◾ 69

These iterations also indicate the approach to implementation of the policies—that should also be based on iterations. Iterative refinements of the policies are expected during practice. However, the concepts of continuous improvements in processes, people, and technologies that provide impetus to a lean business initiative also apply here.

KPIs in Green Strategies Key performance indicator (KPI) provides information on an organization’s performance against defined and measurable cri- teria. KPIs can provide help in measuring the progress of an organization in the area of environmental sustainability and Green IT. Since the progress of a green initiative must be mea- sured against the stated goals, the KPIs provide an opportunity to ascertain whether the strategic goals have been achieved or not. The KPIs not only measure the progress but also provide indication of what needs to change during the course.

Since the drivers, discussed earlier, provide the necessary impetus for the environmental approach in an organization, they provide valuable input in creating KPIs. However, the four dimensions are along which an organization transforms itself— therefore, the four dimensions of a green enterprise transforma- tion, namely the economy, people, process, and technologies, provide an excellent basis for the formulation of the KPIs.

The KPIs lead to an indication of the Green IT metrics that need to be collected. Standards, metrics, and monitoring the progress of sustainability are closely associated with KPIs evaluated for adoption. Standards allow the enterprise not only to measure success in a standard way, but also to compare itself against industry benchmarks and other organizations.

Having identified KPIs and metrics, the processes and systems to collect the metrics need to be in place. For example, if reduction in paper consumption is a KPI, then the measurement of paper consumption needs to be planned across departments, processes, and then the company. There will be a need to know different usages of paper (e.g., mailing, reports, copy machines, employee printing, forms), and a means of measuring consumption across these different usage categories. After collecting this data on the KPI, there is a need to store the results and analyze them for their sustainability knowledge.

Following are some typical KPI that is required to be embedded in an organization that is undertaking green strategies.

The KPI groups, listed in Table 2.4 can be further expanded along the four dimensions. However, each dimension has its own nuances when it comes to Green KPIs. For example, a KPI that is entirely focused on carbon reduction irrespective of cost considerations may not be accept- able in the economic dimension of the organization. Alternatively, a technologically advanced energy-efficient cooler might use less energy and hence lower operational cost; but the capital expenses toward such a cooler will be part of the economic dimension. Thus, KPIs should regu- larly tie business efficiency with carbon efficiency. Savings in carbon related to various aspects of the organization such as production, sales and marketing, research and development, and admin- istration—all need to be related to savings in costs.

These environmental KPIs can vary depending on the business and the spe- cific goals of the business. For example, an airline may decide to base its KPI on the “carbon produced per passenger kilome- ter” whereas a hospital may have “carbon emission from IT instruments per patient” as its criteria to measure its carbon per- formance. Measurable targets for each KPI need to be set as the strategies evolve. These performance areas are then mea- sured to ascertain success or otherwise of the environmental strategies of the organi- zation. KPIs in the Green ICT domain will reflect the organization’s environmental goals and provide the basis for measuring the factors that are crucial to the organiza- tion’s success.

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70 ◾ Green IT Strategies and Applications

Further, when KPIs are discussed, there is a need to keep in mind the metrics and measure- ments that are required to support such KPIs. Setting KPI targets is the easier part; measuring and reporting on the actual emissions is the greater challenge. Therefore, setting a measurement program using smart meters that feed the data into the system that can collate and analyze the resultant data is an important aspect of KPIs. Formulation of KPIs also requires referencing to the local, national, and international standards and practices—feasible. Finally, each KPI needs to be considered in the context of the organizational conditions, requiring some premonition of the caveats that should be adhered to in the use of those KPIs.

EXAMPLES OF GREEN KPIs

Example KPI-1: My organization will reduce 10% over its last year’s energy bill. This reduction is aimed over next 3 years, at the end of which, we will review all factors associated with this reduction.

Caveat: Without reducing business activities. Explanation: Enhancement in business sustainability through not only reduction in energy con-

sumption but also through efficiency in overall business processes. ERBS provides organizations with a mechanism to consider energy-efficient measures, monitor, assess, and manage their carbon emissions.

Example KPI-2: My organization will eliminate the use of paper in all communications in the next 3 years.

Caveat: Except where it is legally binding to produce paper-based documentation. Explanation: Elimination of paper, especially in banks, insurance, and legal firms, is not going

to happen immediately. Due consideration to the legal requirements of paper-based documentation is required.

Example KPI-3: My organization will reduce production machines operation hours by 20% via intense focus on idling times of the machines over the next 3 years. At the end of the 3-year period, all factors impacting operation and production costs will be reviewed against their carbon costs.

Table 2.4 Green KPIs in Four Groups

Primary Dimensions

Example Goals/KPIs (Timelines, Lengths, and Depths) My Organization Will Experience the Following:

Economic Reduction in energy consumption by 10% of its current level per year for 3 years.

Increase in green services (addition of one detailed service dedicated to green).

Technical Use virtualized data servers for all its data warehouse; use smart meters to record, repost, and control emissions.

Process Optimize SCM to reduce emissions by re-engineering individual processes.

People Train people for Green IT at all levels.

Telecommute once a week to reduce emissions.

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Green IT Strategies: Drivers, Dimensions, and Goals ◾ 71

Caveat: This 20% reduction over 3 years will require training for the staff, as well as use of power- saving gadgets (including software) that can help detect idling times of various machin- eries and equipments in the organization and switch them off.

Explanation: The cost of training of personnel and the costs associated with procurement of power- saving gadgetry are important aspects of this KPI. Therefore, they need to be included in the calculations of ROI on the carbon reduction initiative.

Example KPI-4: My organization will promote the creation and implementation of Green IT strate- gies and the subsequent carbon savings by adhering to standards and guidelines and proper label- ing of green compliance in products.

Caveat: Standards associated with labelling of Green products are continuously changing; they are also different from region to region. Costs and effort are required to ensure formal labelling.

Explanation: All products and services need to disclose their carbon contents. This would usually result in enhancement of public image and thereby increase the marketability. A 2009 study by Forrester Research, Inc., “The Rise of the Green Enterprise: A Primer for IT Leadership’s Involvement,” notes that in the “Economist Intelligence Unit’s February 2008 survey of more than 1,200 business executives, companies that rated their Green efforts most highly over the past three years saw annual average profit increases of 16 percent and share price growth of 45 percent” (Carotenuto, 2009).

Example KPI-5: My organization will ensure its carbon emissions are within 150 kT as stipulated by the government regulations in the year 2010–2011.

Caveat: The government regulations will change. Keep in mind this changing nature of the regula- tions and caps when committing to staying within stipulated limits.

Explanation: An ERBS can help an organization start complying with the governmental regula- tions. For example, an ERBS implementation contains environmental web services that increase the access to the information about the carbon status of the organization. Functional capabilities of the enterprise can be updated to ensure carbon compliance. However, such compliance is based on a dynamic figure that will keep changing as new regulations are brought in place.

Example KPI-6: My organization will provide easy access to information about carbon emission status.

Caveat: Privacy of information should be of immense importance, as increasing carbon perfor- mance of an organization will be as important as its profit performance.

Explanation: Access to carbon performance of the organization can be part of good corporate citizenry. This carbon data presents the personality of the organization to the con- sumer and the general public. Therefore, making this data available is going to help the organization and the consumers in understanding its direction. This is similar to the requirements to disclose the company’s financials to the stock market within limits and legal requirements. However, similar to financial data, there is a need to limit what gets presented to the public to ensure that the company is not disadvantaged in its market dealings.

Example KPI-7: My organization will compare its green efforts against industry standard bench- marks in order to improve its carbon performance. This rating comparison will occur over next 5 years, at the end of which, we will review the impact of rating on organization revenues, profit increase, and share price growth.

Caveat: The benchmarks and standards are themselves likely to change over the period of 3–5 years.

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72 ◾ Green IT Strategies and Applications

Explanation: None of the standards and benchmarks associated with carbon performance of orga- nizations are steady. As this gets written, the prime minister of Australia, Ms. Julian Gillard has met with President B. Obama - and the meeting has reflected a new direc- tion associated with carbon taxing for the Australian government. Similar vacillating policies relating to carbon emission control can be seen elsewhere in the world result- ing in uncertain standards and benchmarks.

Example KPI-8: My organization will establish a suite of green alliances across various business lines. The alliances are aimed over the next 3 years, at the end of which we will review the impact of these alliances on organization business growth.

Caveat: Trust and security of alliances is a factor that should be considered upfront. Explanation: ERBS promotes organizations to collaborate with each other, resulting in a suite of green

alliances across various lines of business. Organizations can assist each other through formation of common standards and subscribing to them, sharing carbon data and infor- mation through collaborative web services, and share experiences in terms of successes and risks associated with their green initiatives. Eventually, the monetizing of carbon pro- cesses will require greater alignment by multiple businesses—as is envisaged by ERBS.

Additional KPI Examples ◾ My organization will reduce the energy consumption of its IT systems by 20%, 15%, and

10% every financial year over the next 3 years which will results in total cost savings over the current operation of 50%.

◾ My organization will reduce the rest of its energy consumption (non-IT, such as smart light- ing, air conditioning, car fleet) by 10% per year over previous year for the next 3 years.

◾ My organization will introduce reuse of materials and equipment by making conscious attempt in training, educating, and equipping personnel. Such reuse includes responsible recycling of e-waste (inc toners, unused IT/mobile phones; see Unhelkar (2009b) for detailed discussion).

◾ My organization is committed to buying Green IT products. ◾ My organization is committed to use of renewable/green energy wherever possible. All busi-

ness processes in the organization will be modeled and subjected to Green IT audit. ◾ Forty percent of all work that requires physical meetings will be conducted using telework-

ing facilities such as video conferencing and social media networks. ◾ My organization will achieve Green IT maturity of Level 3 in the next 3 years. ◾ All employees will be provided 2 days of training per quarter in developing an understand-

ing and use of Green IT.

Discussion Points ◾ What is a green strategy mix? Consider examples of organizations that you know of that

would fit within the strategy mix. ◾ What are Green IT strategies? How would you develop Green IT strategies for an organiza-

tion looking 3–5 years ahead in time? ◾ Discuss the importance of consortiums in an 8+ year Green IT strategy.

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Green IT Strategies: Drivers, Dimensions, and Goals ◾ 73

◾ Explain how costs and profit margins play a role in driving an organization toward ERBS? (hint—refer to Figure 2.7 in your discussion)

◾ Compare enlightened self-interest with the sociopolitical pressure as Green IT drivers. ◾ How does a green business ecosystem influence many small organizations? How does it

influence a large organization? ◾ What are the four dimensions along which an organization can transform to a green

organization? ◾ Show how you would incorporate data centers, metrics, education and training, and green

process reengineering within an ERBS. ◾ Argue for the need for iterations in following the steps for ERBS.

Action Points ◾ Identify the most important ERBS driver that will impact your organization in the short

term (within an year, e.g., regulatory and legal—identify the specific regulation that you may be required to comply with).

◾ List that driver specifically against the current business goals of your organization (e.g., cus- tomer experience enhancement and regulation).

◾ List the potential conflict between the two goals—environmental and business (e.g., need to comply with lower carbon emission requirement may lead to reduced customer experience).

◾ Identify areas of business where ERBS can cause substantial and measurable impact. ◾ Discuss a strategy to ameliorate the above situation (e.g., by highlighting to the customer the

reduction in carbon through a slightly slower process of providing service). ◾ Update the above strategy with an approach that can do both—enhance the customer expe-

rience and reduce carbon (e.g., through the use of an upgraded device, or reengineering of the process to provide service that makes it more efficient).

◾ Measure the driver for which the approach or initiative is taken. For example, measure cus- tomer experience through customer survey or find it out by customer uptake.

◾ Discuss all the above steps, but now in the context of a driver for ERBS that will affect your organization in the long term (3–5 years).

◾ List the potential Green KPIs in four groups corresponding to the four dimensions for your organization.

◾ Revise the list of Green KPIs after discussions with your green strategy team.

References Arveson, P. (1998). Background And History Of Measurement-Based Management. Accessed 3rd April,

2011, from http://www.balancedscorecard.org/bkgd/bkgd.html Aronson, J. (2008). Making IT a positive force in environmental change. IT Professional, 10(1), 43–45.

doi:10.1109/MITP.2008.13. Atkins, T. and Ali, H. J. (2009). Mobile strategy of strategic E-business solution by Dr. Tony Atkins and

Hairul, A. K., Nizam, P. G., Ali, H. J., chapter 3 in Handbook of Research in Mobile Business: Technical, Methodological and Social Perspectives, 2nd ed., ed. B. Unhelkar. IGI Global, Hershey, PA, VSA.

Boutros-Ghali, B. (1995). Agenda for Peace. Paper presented United Nations Conference on Environment and Development, Rio.

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