Yesterday, I participated in one of the regular content planning sessions for us analysts on Forrester’s IT Infrastructure & Operation’s Research team. Similar to investment managers and their portfolio of stocks or bonds, we spent time making buy/hold/sell decisions on what we will research more, continue to research, or stop researching. Among the many criteria we use to make these decisions, like client readership, inquiries, or consulting, the strategic relevancy to IT is an important factor to consider. And there was some heated debate around research themes we may phase out down the road…
Enter the discussion on IT asset disposition – or the process of reselling, donating, or recycling end-of-life IT equipment. While every organization eventually has to dispose of its end-of-life IT equipment, it’s long been an afterthought. And the data backs this up. Forrester finds that 80% of organizations globally use their OEM, third parties or a combination of the two for IT asset disposition. But when asked how important IT asset disposition is relative to other IT asset management processes, it’s far and away the least important. As an indicator of this, I recently surveyed over 300 European IT professionals where 77% of respondents ranked IT asset disposition “less important” or “least important.”
This begs the question, is disposing of end-of-life IT equipment really strategic?
I recently recorded a podcast with GlaxoSmithKline (GSK), the global pharmaceutical company, and their success story of implementing a PC power management initiative that is expected to cut energy costs by ~$1 million per year. While these savings alone should impress any IT executive – especially IT infrastructure and operations professionals who manage PCs – what I found so unique about their story came through my conversation with Matt Bartow, business analyst in GSK’s research and development IT organization, who led this initiative. In particular, GSK is a great example of how “empowering” staff to innovate can industrialize IT operations leading to significant cost savings andgreen IT benefits.
GSK’s success with PC power management is an outcome of the inspired management style advocated in Forrester’s upcoming book, Empowered. By proactively calling on their employees to spur innovation, GSK tapped into one of their greatest inventive resources – staff, like Matt Bartow, who Forrester would consider a highly empowered and resourceful operative (HERO). But as Empowered explains, HEROes can’t succeed without support from management. By initiating the innovation challenge, GSK’s IT leadership not only identified HEROes in their organization but sourced innovative ideas at the same time. From there, the use of social media technology – in this case, using a wiki-type website with voting capabilities – made it simple for GSK staff to participate while giving them a “say” in the selection process.
So how exactly did PC power management become an IT priority at GSK?
As green IT plans persist through 2010, I'm starting to receive questions from IT infrastructure and operations professionals — particularly data center managers — about the use of cleaner energy sources (e.g. wind, solar, fuel cells, hydro) to power their data center facilities. So when Google recently announced its purchase of 114 megawatts of wind power capacity for the next 20 years from a wind farm in Iowa, I got excited, hopeful of a credible example I could refer to.
But as it turns out, Google will not be using this wind energy to power its data centers. . . yet. Despite Google stating that the wind capacity is enough to power several data centers, their Senior Vice President of Operations, Urs Hoelzle, explains that, "We cannot use this energy directly, so we're reselling it back to the grid in the regional spot market." I confirmed this in electronic conversations with two other industry insiders, Martin LaMonica (CNET News) and Lora Kolodny (GreenTech), who also covered the announcement.
And it's unfortunate since Google's $600 million data center in Council Bluffs, Iowa could likely benefit from the greener, and possibly cheaper, wind energy. But Iowa is a large state and it's likely that distribution of the wind energy is an issue since the Council Bluffs data center appears to be well over a 100 miles away from their wind farms several counties away.
Watching the World Cup over the past few weeks gave me a new appreciation for soccer/football/futbol. Imagine passing, catching, shooting a ball with NO HANDS.
The goal that Ghana scored in overtime (sorry, "extra" time) to knock out the USA was, sadly, prettier than anything that Tom Brady or Jerry Rice could do with an American football.
So my national pride took a hit as the US was eliminated — fortunately it got a boost in an unexpected way on a trip to a client's event later that week. I spent the day at Panduit Corp.'s new company headquarters outside of Chicago, speaking to their executives and customers on my favorite topic: the role that IT leaders and IT organizations can play as enablers and catalysts of corporate sustainability initiatives.
In the course of Panduit's headquarters-opening event, I got a chance to visit with three companies with a lot in common: privately-held, headquartered a long way from Silicon Valley or Route 128, and family- or founder-led. Not the usual characteristics of innovative, high-tech firms. And yet all three are at the front edge of technologies being used to make buildings and data centers more efficient and less environmentally impactful:
• Lutron of Coopersburg, Pa., founded in 1961 by the inventor of the rotary dimmer switch. A supplier of leading-edge lighting systems for green buildings. The lighting in the building's conference rooms and public areas was calm, cool, and extremely energy-efficient.
So why is PC power management important to IBM customers?
While IBM already offers its customers energy-efficient servers and their “Tivoli Monitoring for Energy Management” software for the data center, bigger opportunities for savings exist across distributed IT assets, like PCs, monitors, phones, and printers. In fact, Forrester finds that distributed IT assets consume 55% of IT’s total energy footprint versus only 45% in the data center. And the extent of these savings can add up. For example, BigFix cites a large US public school district with 80,000 PCs saving $2.1 million in annual energy costs (or $26 per PC per year) using BigFix’s Power Management software.
To quote Forrester’s CEO and Founder, George Colony, during his keynote at Forrester’s IT Forum EMEA event: “CEOs only care about two things: revenue growth and profitability.” How should we interpret this? CEOs do care about green if it is able to drive revenues, reduce costs and mitigate risks — all of which are essential ingredients in delivering long-term profits and shareholder value.
Evidence is mounting around CEOs' rising interest in corporate sustainability initiatives. For example, the United Nations Global Compact-Accenture CEO Survey 2010 published in June finds that 54% of CEOs globally view sustainability as “very important” to the future success of their businesses. And the Economist Intelligence Unit backs this up by finding that companies that rated their green efforts most highly over the past three years "saw annual average profit increases of 16% and share price growth of 45%, whereas those that ranked themselves worst reported growth of 7% and 12% respectively."
So does your CEO care about green IT?
Not without some convincing. And here’s why: While your CEO might care about green, they may not necessarily care about IT. As an indicator of this, Forrester found that only 16% of the world’s largest companies mention green IT in their annual reports. And as a result, CEOs are most likely unaware of IT’s role in enabling their company's green ambitions. The good news, however, is that IT is playing an increasingly central role in planning and executing companywide green strategies which will lead to C-level visibility.
[Scroll down to view Forrester’s "The Evolution Of Green IT" video… don’t worry, it’s only ~6 minutes.]
As a quick recap, part one of this video series walked through how corporations and governments are using green strategies to achieve their financial and political ends. From there, I gave a handful of examples around how green IT is helping leading organizations — like Sprint, AT&T, and Tesco — save $20m, $12m, and achieve a 17% reduction in fuel consumption, respectively.
So what can you expect in part two? In ~6:00 minutes, part two of this video series will discuss green IT's quickly expanding scope and approach. What do I mean by this? In short, green IT's scope is evolving beyond the data center into distributed IT and broader business operations. Forrester calls this the green IT 1.0 ("green for IT") and 2.0 ("IT for green") transition. Likewise, the approach to green IT is expanding beyond procuring more energy efficient equipment to also include software, services, people, and process. And the savings from these new approaches are impressive:
I’m delighted to return to Forrester and its Customer Experience team after eight years of running my own business and technology strategy consulting practice.
I’m returning to the same group in which I worked before with Harley Manning and his team. It was in that group that I helped develop and implement Forrester’s Web Site Usability methodology, wrote reports like “Must Search Stink?” and “Smart Personalization,” promoted the use of customer data intelligence and CRM systems to drive proactive interactions that I called “Tier Zero Customer Service,” and reported on the uses of early community-based tools for customer service (today it's "social CRM").
A frequent question that I've been asked in the scores of phone calls over the past several weeks since my return has been: What are you going to cover? The short term answer is primarily four topic areas:
This year SAPPHIRE officially changed its name and became SAPPHIRE NOW. Why? Different answers from different people. Those that should know said: "The new name stresses the urgency." Urgency for whom, SAP? And will the next SAPPHIRE be named SAPPHIRE THEN? Never change a successful brand.
Another premiere for SAPPHIRE was the simultaneous show in Orlando, US and Frankfurt, Germany. With 5,000 attendees in Frankfurt, 10,500 in Orlando and 35,000 online participants, this was the biggest SAPPHIRE event ever. I must admit I was concerned going to Frankfurt while everyone in Walldorf desperately tried to escape to Orlando. Who wants to attend a second-hand event? But now I’m a believer. SAP managed to balance the important parts of the show between Orlando and Frankfurt. Keynotes were held simultaneously in both locations via virtual video connection and speakers in both cities. In general I never had the feeling I would miss anything important in Frankfurt simply because it was the smaller event overall. It didn’t make a difference if I couldn’t attend another 400 presentations in Frankfurt or 800 in Orlando from the total of 1,200+ presentations – I had a packed agenda and got all that I expected and needed, including 1:1 meetings with SAP executives like Jim Snabe. The simultaneous, virtual set-up not only helped to save a lot of cost, it created a sense of a bigger virtual community and underlined SAP’s ambitions for more sustainability. To all that traveled intercontinental: Shame on you, next year stay in your home region!
Like every show SAPPHIRE 2010 had its stars as well:
[Scroll down to view Forrester’s “The Evolution Of Green IT” video… don’t worry, it’s only 3:30 minutes.]
At Forrester, we’re always exploring new ways to connect with our clients and fit into their busy schedules. And as an analyst on Forrester’s IT Infrastructure & Operations (I&O) research team, I’m well aware of how time-pressed our clients can be. The I&O professional is oftentimes characterized as the “fire fighter” of the IT organization, dropping everything at any hour of the day to ensure their business’s critical IT infrastructure – from servers to PCs to mobile devices – is running without a hitch… and on-time and on-budget.
With that said, I’m particularly interested in “testing” out video to supplement my published research and my blogs on the Forrester.com website. To that end, below is part one of a two part video series on “The Evolution Of Green IT” – a topic I am increasingly receiving client inquiries on as organizations try to determine their green IT maturity and future trajectory.