What Do Green IT, The Economic Crisis, And Best Selling Author, Thomas Friedman, All Have In Common? Poor Accounting.
Posted by Doug Washburn on June 25, 2009
Consider the following questions posed by Thomas Friedman, New York Times columnist and author of The World Is Flat: A Brief History of the Twenty-First Century, and more recently, Hot, Flat And Crowded: Why We Need a Green Revolution - And How it Can Renew America:
“Was it an accident that Citibank, Iceland’s banks, and the ice banks of Antarctica all melted at the same time?”
“Was it an accident that Bear Sterns and the polar bears both faced extinction at the same time?”
In Friedman’s eyes, no, the recent economic and environmental woes are not accidental or coincidental. He explains that what the “great recession represents, if that what we can call this economic moment, is that both the market and Mother Nature hit wall at same time.” How? Because, according to Friedman, we’ve been using the same accounting system in both worlds that has massively under-priced risk, privatized gains, and socialized losses:
- In the financial world, credit default swaps were sold without having adequate collateral behind them, gains were privatized to the financial institutions that sold them, and losses were socialized onto tax payers when the credits actually defaulted.
- In nature, we’ve under-priced the risk of rising CO2 emissions in the atmosphere, privatized the gains from emitting carbon to the institutions that emitted them, and socialized the losses by “charging them all on our kids Visa cards” (i.e. negatively impacting the world for generations to come).
Check out Friedman’s recent interview on his upcoming revision to “Hot, Flat And Crowded” with environmental news and commentary hub, Grist.org:
What should IT leadership takeaway from this?
In short, connect Friedman’s notion of a poor accounting system — that has caused financial and environment woes — to how you account for your own IT.
In a time when wringing out every unnecessary cost counts more than ever, the majority of us are still guilty of not accounting for IT’s true cost of ownership. According to Forrester’s findings, only 4% of North American and European firms pay for the energy-related operating expenses of IT, not to mention the energy-related carbon emissions. And as a result, opportunities for cost- and carbon-thrifty behavior are being overlooked. While the financial benefits might flow to someone else’s bottom-line (e.g. facilities, real estate), your overall organization will profit.
Viewing your IT through a “green” lens can help expose many of these hidden costs — financial and environment — that IT incurs but are paid for by someone else. IT leadership should take advantage of the challenging economic environment to employ guerrilla-style cost-savings tactics today that will lay the groundwork for a culture of responsibility to eliminate unnecessary spend into the future.
To help IT leadership get off on the right foot, my recent research — No Capex, No Problem: Eight "Guerrilla" Tactics To Reduce Facilities Costs Without Capital Investment — highlights a number of low-cost tactics to reduce the financial and environmental impacts of operating IT. Here is a sampling of a few of these tactics:
- Power down idle but energy-drawing PCs and monitors. The problem: In short, idle computing wastes money. This is when PCs and monitors are drawing energy but no useful work is being performed, such as nights, weekends, holidays, and workday breaks. Assuming a 9 a.m. to 5 p.m. workday, five days a week, an unmanaged PC will spend just more than 75% of its time in this idle, energy-wasting state. And the energy costs add up. Consider an organization with 2,500 desktop PCs, each drawing 89 watts, and 2,500 monitors, each drawing 30 watts. With zero power management, Forrester estimates that this will cost approximately $246,537 per year. But by instituting PC power management policies, such as putting monitors into standby after 15 minutes and PCs into hibernate after 45 minutes, this organization can save $177,357 per year. Washington Mutual, General Electric, and Dell boast savings of $3 million, $2.5 million, and $1.8 million per year, respectively, by simply turning off their PCs when not in use.
- Enforce duplex printing. The associated costs of printing — including equipment, ink, copying, printing, faxing, postage, storage, disposal, and recycling — have been estimated to be as high as 31 times the cost of the paper itself. And despite the introduction of technologies to encourage the "paperless" office, demand for office copy and printing paper has increased. For example, it's estimated that the introduction of email into the office environment has increased paper consumption by 40%.
- Optimize temperature and humidity in the data center. According to the industry consortium The Green Grid, only 30% of a typical data center's energy consumption goes to powering its IT equipment, with the lion's share going to chillers (33%), computer room air conditioners (CRAC) (9%), and humidifiers (3%). And in many cases, these environmental systems are not optimized. Cooling is a prime example, with most data centers being too cold — operating cold aisles at 65° to 68°F (18° to 20°C) — even though manufacturers of IT equipment have set the allowable high-end temperature at 80.6°F (27°C).
Search Forrester's Blogs
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