“IT Could Do Better,” Says Report

Over a third of IT executives (42 percent) say their firm does not monitor its IT-related energy spending – and a further nine percent don’t know if their firm monitors this. Of those that do monitor it, one in four have seen their energy consumption increase over the past two years. This is according to a new report from the Economist Intelligence Unit that explores the efforts being made by organizations to measure and reduce the environmental impact of the IT function. IT and the Environment: a New Item on the CIO's Agenda? shows that although there is high visibility of environmental issues in organizations, few have anything approaching a cohesive strategy for dealing with it from an IT perspective.

However, rising energy costs and IT’s growing demand for power is likely to put energy concerns higher on the agenda. The US Environmental Protection Agency notes that servers and data centers in the US accounted for 1.5 percent of the country’s total electricity consumption in 2006 – more than double that consumed in 2000, and accounting for some $4.5 billion worth of electricity.

“Although concerns about energy efficiency and global warming are now high on the political agenda, the spotlight has not yet been turned onto the IT function,” says James Watson, the report’s editor. “This survey suggests that few firms have woken up to the fact that their IT infrastructure is already responsible for a significant proportion of their total energy costs.”

In general, more than half of executives (54 percent) polled agree that their firm does not measure the environmental impact of its IT systems and policies – and just one-third say they do. In part, this is due to the lack of visibility about the issue: 64 percent agree that an industry standard on energy efficiency on IT equipment would cause them to change their procurement policies.

“There is a growing business need, and an emerging legislative one, for CIOs to look at their own organizations to ensure their IT systems and services are as energy efficient as possible,” says Richard Lanyon-Hogg, IBM Chief Technical Officer for Green Services. “Recent client engagements and the Economist Intelligence Unit report confirm that despite this, many organizations are unsure as to how to measure their IT carbon footprint and bring about sustainable improvements.”

Most organizations appear to be paying lip-service to green issues. Although two-thirds of executives polled say that their organization has a board-level executive responsible for energy and the environment, only 45 percent of firms have a program in place to reduce their carbon footprint. And of those that do have a carbon reduction strategy, the majority (52 percent) have no specific targets for it, although a small core (nine percent) aim to be carbon neutral by 2012.

Another key finding suggests that when it comes to IT procurement, power consumption is not a significant criterion right now. Reliability is the main deciding factor when buying IT equipment, according to 63 percent of respondents. This is followed by price (32 percent) and then after-sales support (30 percent). Despite rising energy costs, only 12 percent of respondents believe that the energy efficiency of IT equipment is a critical purchasing criterion. In comparison, 13 percent of executives rate delivery times as being a critical factor.

However, IT holds much scope for improvement. Despite the current sense that little progress is being made, the IT function is well placed when it comes to reducing its environmental impact. By adopting existing energy efficiency methodologies and technologies, corporate servers and data centers could cut power use from current efficiency trends by 56 percent by 2011, according to the EPA. For the US alone, this would reduce projected electricity costs from some $31 billion to $17 billion, providing an obvious cost saving incentive – and also delivering a huge reduction in future CO2 emissions. Beyond the data center, simple initiatives such as switching off PCs when not in use and minimizing unnecessary printing, can improve an organization’s green credentials and save money at the same time.

Factoid:
$4.5 billion – amount spent on electricity for servers and data centers in 2006