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Lean Green

Data drives environmental initiatives that often contain cost benefits.

by David A. Kelly

It's hard to believe, but creating an environmentally friendly green strategy can pay off for your bottom line.

Sustainability initiatives typically provide ways for organizations to consider the impact of their business and IT practices. As a result, organizations may make changes to reduce specific environmental consequences such as energy use and cooling requirements, or they may focus on new practices that help increase business efficiency. More effective marketing, product planning and other processes can both reduce the environmental footprint of a business and benefit the organization financially.

"We see in almost every case that it's cost savings and the reputation of a company that's driving green IT initiatives, rather than just because it's the right thing for the planet," says Sid Adelman, principal of Sid Adelman & Associates, a consulting organization focused on data warehouses, business intelligence (BI) and data strategy. For example, Adelman notes that while savvy organizations are saving money and disposal costs by using data warehousing and BI tools, they're also helping the environment.

"By using data warehousing and business intelligence, companies have been cutting out a whole lot of reports and wasted paper. So instead of producing these incredibly heavy paper reports, organizations are using technology to see their information," says Adelman. "Because of that, they're saving a lot of trees, chemicals and energy, as well as cutting down on the environmental impact of disposal. But they may also be saving money at the same time."

Why sustainability matters

For most organizations, business needs drive initiatives. IT departments change, add, upgrade or remove technologies to address specific business requirements. But IT doesn't exist in a vacuum, and plans are often influenced by a variety of environmental concerns, including the rising cost of energy and calls for corporate responsibility.

As a result, many organizations are evaluating their business practices from a variety of angles, including social responsibility and traditional financial measurements.

"We've seen a difference in overall approaches to green IT between North America and Europe," says Rakesh Kumar, research vice president at Gartner Research. "In Europe they look at this very much from a social, political and human behavior perspective. In the U.S. it's very much from a financial perspective."

Of course, as Kumar notes, one big driver for sustainability solutions has been the significant increase in the cost of electricity. IDC research predicts that over the next five years the expense to power and cool the installed base of servers worldwide will grow four times compared with the growth rate for new server spending. According to these projections, in the near future, the cost of powering a server throughout its life span will exceed the purchase cost. This is prompting organizations to reconsider their data center and server strategies, and to identify the potential savings.

"Green IT initiatives have to provide a fairly rapid return on investment [ROI]. Certainly, for the next 18 to 24 months it's all about cost savings," says Kumar. "If we look to a three- to five-year perspective, then some of the social issues come in. However, over the next 12 to 24 months the focus is very much around spending money to save money, typically on energy."

An example of investing a little to achieve significant financial results can be seen in an initiative by the U.S. state of Massachusetts. Recognizing that idle electronic office equipment—such as PCs and printers—consume huge amount of electricity, the state initiated a program to turn off (or switch to "sleep" mode) the tens of thousands of state computers when not in use. Officials anticipate saving $2 million and reducing carbon emissions by more than 5,000 tons annually. That's a pretty good ROI for helping the environment.

Sustainability spectrum

Organizations have uncovered myriad ways to go green and benefit financially from doing so.

"There's a whole set of activities that green IT encompasses, and different people are doing different things along that spectrum," says Kumar.

It's hard not to find ways to become more efficient. Such initiatives cut across a range of IT and business activities—from reducing energy use in data centers to using applications that improve the efficiency of marketing programs. In areas of IT, how well code and applications are written can affect green initiatives. Inefficient applications require more processor resources and servers, thus consuming more energy.

Sustainability solutions can have a positive corporate and environmental impact in the following areas:

Many organizations start by identifying ways to reduce their energy costs. Putting power management strategies in place for general office equipment such as desktop computers, laptops and printers can have a big impact, as can data center-focused initiatives, such as consolidating servers and switching to more efficient ones. Such steps reduce the cost of operating and cooling data centers.

A wide range of operational efficiencies can produce results. For example, using BI tools to eliminate printed reports saves paper. Better asset management and tracking can translate into less equipment to maintain and operate.

Looking beyond their four walls, organizations can evaluate potential positive impacts in their supply chain. Good inventory management, demand forecasting and product planning can help control fuel consumption, reduce packaging and prevent waste.

By using BI and analytics applications, businesses can optimize marketing strategies and target prospective customers, reducing the amount of paper and fuel required to deliver fliers, catalogs and other printed materials. In addition, moving to online or mobile marketing and making better use of Web channels can reduce printing, paper consumption and waste.

Utilizing a data solution can also play a key role in measuring an organization's environmental footprint and documenting the impact of its sustainability initiatives. It's becoming critical for many companies to report on how well they're doing environmentally—demonstrating how much less waste they produce or the amount of water or electricity they use.

"Being able to report on environmental metrics is extremely important to a lot of organizations," says Adelman. "If you don't have a baseline or you're not measuring what your electricity is or how much gas you're using before you make changes, it's hard to make comparisons and be able to show how much you've improved things. I'm a really strong advocate of measurement. Being able to demonstrate results gives organizations the ability to take the next initiative and go further with it."

A brighter future

In the end, it's hard to argue with initiatives that can be good for a company's bottom line as well as the environment. When done right, saving money and saving the planet both add up.

Companies need to not only investigate environmentally friendly strategies but also implement them as soon as possible. Initiatives such as reducing data center power usage through server consolidation, upgrades to more efficient servers and reduced cooling requirements can have a financial and environmental impact. Likewise, investment in technologies and processes to improve efficiency—such as better inventory management, more effective marketing campaigns and BI projects—can also reduce an organization's environmental footprint while simultaneously increasing revenues or lowering costs.

"Green IT initiatives can be a win-win for everyone—for the environment, for the company, for the stockholders," says Adelman. "It's the right thing for the company and the right thing for the environment."

David A. Kelly is a Boston-based freelance writer who specializes in business, technology and travel writing.