The IT Energy Bill: Do We Need a New Metric for CIOs?
I often hear that IT sustainability — aka green IT initiatives — don’t make it into the top three priorities for a Chief Information Officer (CIO). When I ask why and if they know how much energy IT consumes and how much it costs, I am more often than not met with a muffled response along the lines of, “It’s not my responsibility,” or “It is not a goal or metric that I am measured against in terms of business goals.”
I expect that over 50 percent of business cases for IT sustainability have not been based on IT energy consumption and spend, or on how savings can be reinvested for further benefit. Alternatively, programs or initiatives don’t get to business case stage because they don’t have the IT energy data to justify or understand the benefits, let alone, understanding the next level down of IT energy information by the asset portfolio. By understanding IT energy at the asset level, you can identify the areas that will yield the biggest return on investment.
The major issue for companies is the disconnect between those who pay the energy bill, typically the real estate or facilities division, and those who consume the energy, in this case IT. Further, the people intimate with the IT energy bill being real estate, Chief Sustainability Officer (CSO) and ultimately the Chief Financial Officer (CFO) have low levels of engagement with the CIO on the very basics of IT energy efficiency. To improve this relationship, simple questions can be asked, such as:
- How much energy do employee use through their IT assets?
- What is the split of energy between the data center and the workplace?
- How many IT devices are supplied per employee?
- How much does the lighting cost versus a PC?
According to global IT sustainability research, when CIOs were asked about the visibility of the IT energy bill and if it is included in the IT budget, only seven percent of respondents were totally responsible for IT’s energy consumption, with another 7.2 percent including the IT’s energy bill in the IT budget. Most respondents have no idea how much energy is consumed by IT, including 10.8 percent who have never thought of it and 42.2 percent who never see it and have no idea about now much energy IT consumes. Overall visibility is very low, at its highest in the USA, where 27 percent include the cost of IT energy in the IT budget, perhaps driven by the priority of costs savings initiatives in response to the GFC, and lowest in Australia, where it is below 1 percent.
Whilst the percentage of IT of the total energy consumption for the organization varies from industry to industry we do know that on average in financial services eighty percent of the energy comes from IT, in government it is around sixty percent, and in manufacturing it is ten percent.
I have had the pleasure of working with a large number of companies globally and one thing that is consistent regardless of industry or size is when the IT department has total responsibility for the IT energy bill they achieve better performance in cost management and sustainability outcomes.
This led me to consider the potential for large scale change if IT energy became a standard CIO metric and reduction targets were set against that metric. What would happen if it was just as important as other metrics such as reliability, security, operational management, supplier management, just to name a few?
I propose that we need to treat IT energy as a strategic asset and CIO’s need to get intimate with the Energy Bill and consumption. Whilst it can be argued that the savings in IT energy efficiency are so small compared to other industries, the potential to enable savings in other industries by 15 percent by 2020 as outlined in the Smart 2020 report is huge. These solutions for other industries such as Smart Transport, Smart Grids and Smart Buildings by way of example must be deployed on an energy efficient IT platform. The role for IT is exciting and significant.
So what will it take for IT Energy to be sexy and a standard KPI for CIOs?
Alison Rowe is global executive director of sustainability at Fujitsu.
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