How to make money by going green

HSBC CIO Ken Harvey is committed to greening the bank. As well as helping to protect the environment, it makes sound business sense, he believes

For Ken Harvey, group general manager and chief information officer of HSBC, the recent hike in the cost of electricity has been a good thing in one way – by waking IT directors up to the business benefits of running more environmentally friendly operations.

“Power is now 6% to 7% of datacentre costs compared to 1% a few years ago,” he said.

As the price of oil has hit the roof, the cost of powering datacentres has become something IT directors can no longer ignore. Green is not just a nicety; careful power management will actually help businesses save money.

Any savings on power consumption will have an immediate financial gain for the bank. HSBC is rolling out Sun T2000 servers, which are said to deliver up to three times the throughput at 30% less power and cooling costs compared to alternative server hardware.

HSBC has also been using green PCs for more than five years and is looking at ways to reduce the amount of printing that needs to be done.

For instance, the bank operates so-called green branches, equipped with LCD monitors that swivel, allowing both staff and customer to use the terminal. There are two benefits, according to Harvey. LCD monitors have lower heat output so there is a lower environmental impact, and less printing is needed since both the customer and staff can see an application form.

Beyond the power savings in the datacentre, energy saving measures within branches and cutting down on print wastage, green can mean many things. At HSBC, Harvey’s ambition is to try to demonstrate how the greater use of electronic systems can support a corporate social responsibility by making it possible for both staff and customers to be environmentally friendly.

For instance, Harvey is keen to move customers to monthly electronic statements. These not only reduce paper waste, but also the environmental impact of transportation in mailing a paper-based statement to the customer. It is also cheaper for the bank to e-mail the statements.

Any direct connection between computer systems reduces the need for people to move around. “When people move around, you consume energy,” Harvey said. So HSBC’s lab facilities are investigating ways to reduce the amount people have to travel, such as better siting of large branches. The idea is to “go to HSBC on the way to Waitrose,” he said.

Such a philosophy also applies to HSBC’s own staff. Harvey is assessing how a virtual call centre could be used at the bank. Virtual call
centres are not a new concept, but are rarely applied in the green debate. More often, they are seen as a way to have people who speak the same language and even have the same regional accents, to take customer calls. Staff benefit from flexible working hours and the business is able to employ people who would not normally be available for work.

A virtual call centre does not need a building – there is no heating, electricity or IT bill. Staff do not need to commute either. And since people generally heat their homes when they are at work,
the environmental impact of heating an unoccupied house is reduced. So a virtual call centre is pretty green.

According to Harvey, the challenge is in demonstrating to the business that people who do not travel into a corporate building every day adhere to the company’s principles as strongly as those that do.

As far as Harvey is concerned there is no reason why someone working from home cannot take customer calls just as well as someone who drives every day to a call centre. He believes this would benefit not only the environment, but also customer service, and improve employees’ work/life balance. He just needs to convince the business.

It is not just making call centre operations greener that can benefit from technology. Collaboration technology can be used for tasks that were traditionally conducted face-to-face.

Take software development, for example. This is one business activity that generally needs teams to work very closely for a common business goal.

“Writing good software is like writing a good novel,” Harvey said. However, software development is a team activity and any deviation can be disastrous, leading to expensive bug fixing, applications that do not meet users’ expectations, or systems failure.

Because of this it is not uncommon for a team to be flown in on a particular project. Yet Harvey is happy running 50% of his software development using offshore teams. The process by which these people interact electronically, in order to solve software development issues, seems to work at HSBC.

Harvey agrees that it is hard to talk to the business about how such technologies could work. But luck is on his side, thanks to state-of-the-art videoconferencing suites like Halo from HP and Telepresence from Cisco, such is the realism of this technology.

He said, “My advice is to sit the CEO in a telepresence suite”. Thanks to clever positioning of speakers and lighting, the suite creates the illusion that conference participants are sitting across the same table, even though they may be on the other side of the planet. Participants’ voices sound natural, as if you were actually sitting right across from them, Harvey said. “And you can see the colours of their eyes,” he added.

“Considering the cost of one business class flight to Vancouver is equivalent to running one of our call centres for a day,” for Harvey, the value of such technology is immediately apparent.

While these systems are costly, Harvey said that for around an extra £20 users can specify new laptops with a video camera built on top of the screen. Equipped with such a laptop, and suitable software, Harvey said a CIO should be able to show business executives how videoconferencing could be widely deployed.

For instance, Harvey has 14 direct reports globally and he communicates with them via a desktop videoconferencing system from Tandberg, which uses HSBC’s IP network to connect users’ laptops, which are equipped with video cameras.

“We already have the network,” he said. After all, HSBC is a global bank so there is plenty of bandwidth available for trying applications like videoconferencing. If the bank ever requires more bandwidth, the quality of the video is simply degraded.

Clearly IT can support a company’s green policy. Buying green PCs and datacentre equipment is only the start.

Harvey’s advice to any IT director looking to support a green policy, or even lead the way, is to show people technology that is close to something they are familiar with and therefore would not feel alienated by.

For instance, he said, the fax machine was easy to deploy as it simply operated a bit like a photocopier but was able to send the scanned document to someone else’s fax machine. At the time, it was also regarded as green, since it avoided the need for couriering documents.

Fax server software was supposed to be a natural successor, allowing faxes to be stored and accessed via a central server, cutting out paper wastage from fax printouts.

However, said Harvey, “While the fax server was much more ecologically friendly and offered greater security, ultimately, it failed.” The reason, according to Harvey, was that business people simply could not accept the server; it was not what they were accustomed to.

Harvey’s final piece of advice to any IT director considering embarking on a green policy is to “convince the CEO that the total operating cost would drop.”

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