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Tech's Looming Battle Against Rising Energy Costs

IT has gotten a bad rap when it comes to energy consumption. Walk into any datacenter, and you can almost feel the carbon emissions leaking into the atmosphere. However, research shows that the datacenter actually accounts for a very small percentage of a company's overall energy usage. And businesses are missing the other significant opportunities where they could cut energy usages -- and costs. Ironically, the same IT department that is reducing energy usage in the datacenter could lead the energy-savings initiatives across the enterprise.

According to the U.S. Department of Energy, the price of energy will continue to rise over the next 25 years, as global demand is poised to grow by 57 percent while the energy supply dwindles. As a result, businesses will find their profits reduced due to higher operating costs -- unless they do something about that energy usage.

Businesses' energy-saving initiatives often aim for the datacenter because it's a visible, easy target. "The datacenter is an absolute factory burning electricity, blowing freezing air, with storage service gear humming away 24/7. Naturally, the first place targeted for energy reduction is the datacenter," says Christopher Mines, a Forrester Research analyst.

Many IT shops have already reduced energy usage by switching to Energy Star-rated products, installing more efficient hardware, and maximizing the efficiency of their cooling system. But these efforts, while important, are just a drop in the bucket compared to the overall reductions that will be necessary to keep your company profitable.

In the coming years, IT could take the lead on saving energy, using its vast knowledge of the company's networks, equipment, work processes, and facilities. IT shops that have embraced the green-tech religion can transform that passion into something that will resonate, and pick up support, where it counts: in the executive boardroom. Energy-smart IT leadership can ensure the company remains in the black for the long term.

IT's Big Opportunity: Lead the Energy-Savings Charge

Focusing on managing the power consumption of the datacenter and IT functions misses the full opportunity, says Glen Hobbs, a technology advisor with PricewaterhouseCoopers. IT has a much bigger role to play in improving business sustainability and identifying cost savings by enabling different ways of doing business, he adds.

"To achieve a commercially realistic advantage, organizations should consider more than just computing device efficiency," Hobbs said. "IT's contribution to an organization's sustainability should not just look inward to the operation of the IT function but outward through the IT supply chain to the operation and use of technology across the whole business."

"The truth is, most companies use and waste as much energy outside the datacenter as inside," says Forrester's Mines. According to Forrester Research, IT is directly responsible for 5 to 50 percent of an organization's energy consumption, depending on the type of business. Gartner's research shows that IT accounts for a mere 2 percent of global carbon emissions, much of which comes from energy consumption.

"True, there is a lot IT can do to fix its own 2 percent and make it more efficient, but the big opportunity for IT is to take a leadership role in tackling that other 98 percent across the business," says Simon Mingay, a Gartner analyst.

"Reducing energy consumption really represents an opportunity for IT to change their relationships with the rest of the business," Mines says. "Now, IT can pull their chair up to the table of strategy making for the firm, becoming an enabler at a strategic level for the company."

There are several areas where IT can lead the charge, including applying energy-savings lessons from the datacenter to the entire corporate facilities, enabling effective telework and virtual meetings, and reducing the need for and helping to make more efficient physical product delivery.

However a company decides to address its energy costs, IT will be involved to a significant extent. Whether tackling the initiative on its own or partnering with departments such as facilities, real estate, and human resources, IT has an opportunity to improve the company's bottom line by helping decrease energy expenditures.

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