Green IT: How to deliver value to your business

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Green IT: How to deliver value to your business

 

Opinion remains divided over the economic recovery but many organisations are seeking growth - whether aggressively or opportunistically - while others remain cautious on investments. A common goal must be to review and potentially re-allocate resources and investment, either to cut costs or release funds for new priorities. From an IT perspective, that translates into making sure IT investments are made in the right places and realising that sometimes elusive goal of measuring tangible value from IT.

 

The business expectations of IT

Research among business and IT executives in 2011 reveals high expectations of IT and some clear imperatives (see panel below).

The role of IT in the business
• Over 50% of respondents see IT as playing a very important role in managing future economic and business trends - yet:
• 81% say IT needs to develop skills in understanding what the business needs from IT;
• 71% say IT needs to improve its skills in communicating with the business; and
• Only two in five have measures in place to quantify ROI on IT

New technologies are rated almost side by side with budget and cost-reduction as the leading drivers of changing demand for IT. Were further evidence needed, investing in IT is seen as the third highest opportunity for 2011, while risks relating to new technologies has risen to fifth position in 2011 .

The message and demand is clear - IT is needed, but it needs to develop its skills in some very specific areas and new technologies are expected to be part of that response.

 

How green IT can help CIOs develop skills in the right areas

In 2010, a global survey of business leaders revealed that, despite a challenging economic environment, organisations were continuing, and even increasing activity on climate change and sustainability (see panel below)

Climate change programmes
• Over two thirds of organisations already had a climate change programme in place
• The top driver of these programmes was energy costs, closely followed by changes in customer demand and new revenue opportunities.
• 70% of organisations planned to increase their spend on climate change and sustainability between 2010 and 2012; top investments listed were investing in energy efficiency, development of new products and services, and transparency in corporate reporting.

Yet it was clear from comments and responses from survey participants that, despite clear business drivers, increasing budgets and planned initiatives, organisations were struggling with execution.

Sustainability has a key role to play in the economic recovery and the future, not simply in response to global or national regulations but also to revenue opportunities and customer demand, and to be competitive in emerging and developing markets.

Bringing sustainability and IT together via green IT has already achieved some notable successes. One example is that of the search for significant and immediate costs savings during the recession. This accelerated the adoption of new technologies to enable virtual meetings and collaboration, to reduce large travel costs. Many organisations captured tangible and measurable business value delivered by those investments in cost savings and contribution to sustainability targets. And these benefits resulted directly from collaboration between business and IT on sustainable IT-enabled business processes.

Those organisations which have already recognised the business potential and imperative of climate change and sustainability, and have a programme in place, should revisit their plans now to take stock, review the business drivers and objectives, and set objectives and targets. Those who have only targeted easily obtainable goals, silo'd activities or who have not even started a programme, should seize the opportunity to establish one or progress their current project as a clear opportunity to reduce costs, enhance reputation and exploit growth opportunities.

IT's role in this is not only to meet sustainability targets where it has direct control but, more importantly, to enable and accelerate the business response to meet its targets.

 

Managing expectations of green IT

There remain a number of misconceptions about sustainability, some of the more common being:

  • It is expensive to implement
  • It relates simply to saving the planet and is not a business issue
  • It is driven by compliance
  • It is just about energy savings
  • It is just about the datacentre
  • It is just about what goes on within IT

So a primary focus for business and IT is to jointly ensure a clear and consistent understanding of sustainability and its business value. This means an integrated approach, and a framework to bring IT and business together to assess the current state, agree a realistic target state, and a plan to achieve that with measures. However, sustainability is still a relatively new, evolving and complex subject, and for many the journey and route are unclear, so awareness and communication plans are key to success.

 

What IT brings to organisations' sustainability programmes

Firstly IT has the opportunity to lead by example in demonstrating its understanding of the subject and the opportunities to apply new technologies. It can deliver against the organisation's sustainability objectives in its own IT lifecycle activities and articulate benefits in terms of business value.

Secondly IT can bring a structured process, language and framework to bring IT and business together. The IT Capability Maturity Framework (IT-CMF) from the Innovation Value Institute provides this structure. The framework achieves this by providing the structure to jointly assess the maturity of current capability and what is important, to set improvement targets and the roadmaps to get there and measure success.

The IT-CMF is based on recognising the capability building blocks that exist for an individual IT process to deliver value. Maturity levels - from 1 (initial) through to 5 (optimising) - are described for each building block, allowing an organisation to set targets relevant to them and delivering value specific to them.

There are nine capability building blocks for green IT under four categories of:

  • strategy and planning
  • process management,
  • people and culture, and
  • governance

Importantly for green IT, the IT-CMF recognises that the scope and value of increasing maturity has to be defined specifically for green IT as a relatively new and evolving capability. However, it also recognises that corporate sustainability and green IT goals influence other core IT processes and capabilities - sourcing, innovation, and portfolio management to name just a few - and that ultimately success means embedding sustainability into other business and IT practices.

Using the IT-CMF to assess the maturity of green IT in organisations revealed the category that receives most focus and activity initially is process management. In process management, IT operations and lifecycle, which includes procurement, design, run and disposal, is typically the first to be addressed.

IT-enabled business processes is typically the second priority, with the implementation of technologies to enable virtual meetings being the most frequently cited example. Business and IT stakeholders typically agreed that, while significant progress had been made in both those areas, much more remained to be done, as well as a need for a significant increase in awareness and communication.

They also found recognition of achievement was often less than expected, because of insufficient attention paid to other building blocks of objectives, people and culture. This resulted in organisations missing out on valuable support because of this lack of awareness and understanding, and tangible objectives and measures. An unexpected benefit of assessing green IT using the IT-CMF was that discussing the green IT building blocks of alignment, objectives, measurement, governance, prompted a wider discussion of IT and resulted in additional insights on priorities, and the focus for investment and action.

In summary, the contributions of IT and sustainability to economic recovery and competitive advantage provide an excellent opportunity for CIOs to use green IT as an enabler to engage in dialogue and respond to business expectations of IT to play that significant role in managing future economic and business trends.

Sheila Upton is a director with Ernst & Young Advisory Services


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This was first published in August 2011

 

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