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Sustainability: driving innovation and growth in IT, telecoms and cleantech

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This blog by Steve Goldstein of Growth Advisors on Greenbiz.com discusses how companies in a range of industries, including the IT indstry, are using sustainability and innovation as a springboard to growth.

Goldstein makes the point that although in the communications and high-tech industry, "much has been written about how software will play an important role in monitoring environmental performance - an estimated $12 billion market this year with some of the world's and industry's leading companies like IBM, HP and SAP actively competing for it.. sustainability is playing a much larger, even pivotal role in remaking the competitive fundamentals, business models, and direction and growth of the industry itself."

He cites three sectors where an industry-wide growth opportunity is being provided by sustainability.

• High-tech equipment and services - "Cloud computing is fundamentally shifting the way enterprises use communications and high-tech products and services. Enterprises are embracing "the cloud" to reduce capital and operating expenditures. Of course, one of the biggest operating expenditures in a data centre is the cost of energy. The use of virtualisation software (central to the operating effectiveness of servers in data centers) from the leading provider (VMware) saves more power than the amount of electricity used annually for heating, ventilation and air conditioning across all of New England. Further, the energy efficiency of computing and network equipment has improved by 70 percent to 90 percent in recent years. "Cloud" is the competitive game changer and a big growth opportunity that every major player in this industry is working on and sustainability is a fundamental reason for its emergence."

• Telecom services - "For major telcos and other players in the communications business, the focus on sustainability is reviving established services like video conferencing, fleet telematics, and telecommuting that date back a few energy crises. It is also putting communications companies in position to compete for business in the rapidly growing markets for cloud, hosting and vertical solutions like e-health against IT providers. New and potentially very large markets for smart buildings, smart grids, remote monitoring, and electric vehicle charging are also in the sights of many companies in this space. Leading telco services providers are beginning to put sustainability at the centre of their product strategies and are looking to address the competitive and regulatory pressures customers are feeling around the sustainability issue. They are in a unique position to provide a broad and integrated set of solutions to the range of an enterprise's sustainability needs."

• Cleantech
- "Clearly a new and rapidly emerging, yet already large space ($188 billion market value in 2010, according to Clean Edge), more money is going into cleantech than any other communications or high-tech segment. Billions are being invested by venture funds, Internet players like Google and long established tech giants including Intel. Why? Solar, water, wind, power, electric vehicles and other cleantech products are highly dependent on information technology and communications in both their operation and distribution and represent the most significant growth and value creation opportunities in this industry for the foreseeable future."

 

GM: Saving $3m in energy costs through use of Smart IT

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I recently came across a post written by Andrew Winston for the Harvard Business Review blogs which offered an insight into the role IT is playing in improving energy efficiency.

According to Winston, opportunities for improving energy efficiency and saving real money in the process are everywhere. Indeed, the proverbial low-hanging fruit is actually, in the words of energy guru Amory Lovins, fruit on the ground. So much so, that the carmaker GM recently announced that it is saving $3 million annually in energy costs across 10 plants by shutting down equipment when it's not needed.

When Winston tried to find out more from GM, it put him in touch with Mike Durak, the Global Program Manager, IT.  As Winston says, "The fact that they suggested an IT exec, and not a plant (or environmental) manager, says a lot about this story."

Essentially, GM is using GE software to automate the shutdown and restart of its equipment  GM set the lighting in one plant to synch up with the conveyor. When the manufacturing line stopped, for breaks or between shifts, the lighting would shut off. Then the managers added all energy-using systems to this automated network, from heating and cooling systems to pumps and compressed air units. The investment in connecting an entire plant paid back through energy savings alone in just 6 months.

As Winston says in his blog post, the new software/networking solution is a great step. The immediate energy savings are solid, but even more important will be the benefits that come from leveraging a completely networked factory, with the operational, financial, and environmental winnings only just beginning.

Eco-Xchange's ComOOt plan to offer commuting alternative

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The Government's new Carbon Plan has insisted that if we are to see large-scale
take-up of electric vehicles as a major form of road transport, developing charging infrastructure will also be vital and the Government has committed to mandating a national recharging network. By June 2011, the Government will produce a strategy setting out how it will promote the provision of nationwide recharging infrastructure.

 

The reality is that travelling into and around towns has never been more expensive or congested. Fares are increasing three times faster than inflation on public transport that is overcrowded and unreliable. Electric and hybrid cars will reduce emissions and pollution, but issues of congestion and parking in urban conurbations will prevail.

 

Public transport can be modernised and capacity increased to a point, but this will demand massive investment and space within cities is already at a premium for houses and office space, without additional demands from the transport infrastructure.

 

A new paper from the influential Eco-Xchange group, which sets out to look at green 'in black and white'  argues that a different approach is needed that looks at the complete picture and provides a solution that is cost effective, flexible, environmentally responsible, and takes into account the specific issues of inner-city travel.

 

 The paper, 'Why Commute When you can ComOOt', argues that two wheels are better than four when it comes to getting from A to B in over-crowded city environments. By providing a range of electric powered two-wheelers from pedal bikes to motorbikes aimed specifically at getting the workforce to work, Eco-Xchange  argues it will be possible to save on public transport subsidies, reduce congestion and lower carbon emissions.  The ComOOT plan also includes secure parking and charging facilities, and the maintenance services needed to keep the wheels of business turning.

 

There is evidence that Olympic organisers and Transport for London are increasingly worried about the demands that the Games will place on London's transport infrastructure and have suggested that visitors should not rely on public transport to get them to the Games' venues in a timely fashion. At the same time, City businesses are also concerned that the additional demand on, already overcrowed, roads and rail services will lead to severe problems for their workforce and disruption to their business.

 

The average range of the bikes proposed would allow a comfortable return journey from the West End to the main Olympic site near Leyton. 

  

There is an element of social enterprise to the scheme too because Eco-Xchange argues that ComOOt  will provide a wide range of jobs covering everything from general servicing and support to general operational management, set up on a social enterprise basis, under a  Community Interest Company model.  The focus will be on offering a range of apprenticeships and vocational training as well as operational jobs at local and national level. 

 

According to Eco-Xchange, ComOOt is an ongoing project and will require R&D in all areas to improve the system over time. This will particularly suit those just starting out in the workplace who will benefit from  gaining qualifications and training on an ongoing basis in the new and growing industry sectors in the Cleantech and Greentech economies. 

 

What Eco-Xchange is looking for now is a founding partner and sponsor to support the development of ComOOt to deliver low carbon personal transport schemes to large organisations, local workforces and visitors in the Capital,  in time for the Olympics. 

 

 

Making Green Work: dare you commit corporate heresy?

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Earlier this week I took part in on a webinar 'Making Green Work', run by the Harvard Business Review and supported by Hitachi, which featured noted Green Business consultant Andrew Winston and which discussed the concept of sustainability within organisations.

Winston suggested that within firms, employees should be prepared to be heretics, thinking the unthinkable. For example, in the US, UPS has decided that because of the idling involved in deliveries, its routes schedule no left turns - we'd call it taking 'no right turns' here. That's going to save UPS an estimated 28.5 million miles from its delivery routes, saving 3 million gallons of fuel, and cutting carbon dioxide emissions by around 69 million pounds.  But how do you create the organisational culture that allows 'green heresy' to flourish? Is this down to the CEO to drive the culture that allows this to happen? What role should other corporate officers play in this?

Equally, it's clear that if such green heresy is to take place within organisations, senior corporate officers need to be incentivised to both think and do sustainability to such an extent that their remuneration depends on it. How far has this gone within the C-Suite? How many Chief Information Officers, for example, are truly thinking how technology can drive green innovation within the organisation, not just in terms of products, but processes, services and new business models? How many CIOs are actually incentivised in this way? And what do these models for remuneration look like? What do they mean for the CFO or even HR?

Winston recently discussed in the Harvard Business Review blogs how organisations like Xerox are working with customers to help them use less of their traditional product or service. It is sustainability that is driving the transformation of Xerox to a services-led business.

As Winston explains,  "Xerox advises companies on how to save money on document handling, and holds a sizeable 48 per cent market share in the $7.78 billion "managed print services" (MPS) industry (according to research firm IDC). Part of this new strategy is an outsourcing play - they'll take over all your print needs for you - to grab share. This is clearly not a niche business-this is a firm that existed on selling devices, paper, and machine servicing, so the more it's used the better. But at the core, what Xerox is offering is less total printing. That's a big shift in business as usual."

You can read the piece here.

 

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