Recently I caught up with Graeme Philipson - founder of Connection Research to discuss research he had conducted for Fujitsu on the present and future of Green IT - what is the Global Benchmark?
GREEN IT: THE GLOBAL BENCHMARK
THIS RESEARCH HAS BEEN CONDUCTED BY CONNECTION RESEARCH - TO DISCUSS ANALYSIS OF YOUR BUSINESS CONTACT US
A REPORT ON SUSTAINABLE IT IN THE USA, UK, AUSTRALIA AND INDIA
This paper contains the findings of the first ever multi-country benchmark to determine the maturity of Green IT practices and technologies in end user organizations. It uses a unique methodology to quantify Green IT implementation across the many different components of Green IT, and across many industry sectors. Green IT is a large and complex subject, and increasingly important as more people understand the role of IT can take in enabling sustainable business practices.
© 2010 Connection Research Services Pty Ltd (ABN 47 092 657 513)
All rights reserved. The content of this report represents our interpretation and analysis of information gathered from various sources, but is not guaranteed as to accuracy or completeness. Reproduction or disclosure in whole or in part to other parties, by any means whatsoever, shall be made only upon the written and express consent of Connection Research Services Pty Ltd.
EXECUTIVE
SUMMARY
This report examines the Green IT maturity of large IT-using organizations in the USA, the United Kingdom, Australia and India. It based on a detailed survey of over 600 CIOs and senior IT managers across those four countries. The research methodology allows Green IT implementation to be quantified and compared, between countries and between industry sectors.
Greenhouse gas emissions from the IT sector as a proportion of global total emissions are forecast to increase from 2% in 2009 to 6% by 2020. Over the same period the number of personal computers is expected to more than treble, from 1.2 billion to 4 billion. The IT industry has an important leadership role to play – both in mitigating its own impacts and in exploiting its technology to enable emissions reductions in many other industrial and business processes.
The idea of intergenerational responsibility and balancing the three key elements of sustainability (economic, social and environmental) presents both challenges and opportunities to the way we live today. With rapid population growth and the increasing impact of climate change, we need to act now. IT is a key technology to enable us to do so.
The subject of Green IT has been discussed for years, but this report shows that developments have been disappointing, There has been some action, but the data shows there is much more to be done. Even in the United Kingdom, the best performing country in the survey and where environmental awareness is the highest, there is vast room for improvement. In all countries there is very poor performance in the metrics that enable Green IT to be properly measured and monitored, and environmentally unsound IT procurement and disposal practices remain widespread. Even the data center, where the level of IT sophistication is the greatest and where higher energy costs are increasingly forcing changes to operational practices, there remains significant areas of opportunity.
Green IT is not a fad. Making the IT function more sustainable, and leveraging it to make the organization more sustainable, will be increasingly important trends in the years to come. This report shows that a start has been made, but it also shows we have a long way to go.
METHODOLOGY
This report uses the methodology developed by Connection Research and RMIT University to develop a standardized Green IT Readiness Index. The results of the survey have allowed the development of an overall index for IT-using organizations in any industry or country.
The methodology allows separate indices to be calculated for each of five key areas of Green ICT:
- · Green IT Lifecycle (Procurement and Disposal)
- · End User IT Efficiencies
- · Enterprise and Data Center IT Efficiencies
- · Usage of IT as a Low-Carbon Enabler
- · Green IT Measurement and Monitoring
These areas are outlined in detail in The Green IT Framework on page 8 of this report. The data was gathered through an online survey of organizations in most industry sectors across four countries, which asked respondents at CIO and IT Manager level over 80 questions about their Green IT policies, behavior and technologies in each area. Surveys were conducted in April 2010 (Australia), May 2010 (India), and July-August 2010 (United Kingdom and USA).
Most questions in the online survey were asked on a 0-5 scale corresponding to a modified version of the Capability Maturity Model (CMM), where 0 = no action and 5 = best practice. This methodology ensures quantitative comparisons between respondents (see page 9). The result is what we believe to be the most comprehensive analysis ever undertaken of the relative maturity of Green IT in a number of important global markets.
The results in each area of Green IT, and overall, are compared between each country surveyed and by industry sector in each country. A total of 638 organizations responded across the four countries. The breakdown of respondent numbers by country and industry sector is shown in the table below.
Respondents by Country and Industry Sector
Note that the Indian survey excluded government organizations, and was limited to large companies in the Mumbai area, representative of Indian companies who operate globally and who have IT operations similar to those in more advanced economies.
KEY
FINDINGS
The survey provides a number of valuable insights into the comparative Green IT performance of organizations in each of the four countries, and between industry sectors within countries. The most significant finding is the relative lack of maturity of Green IT policies, practices and technologies – in every industry sector in every country. While some industries and some countries do better than others, the overall performance is not high – a bare pass mark in most cases.
Key Finding 1: Globally, overall Green IT Maturity is comparatively low
The overall picture illustrated in this report is one of comparatively low Green IT maturity. The overall index across all industries in all countries is 56.4 (out of 100). In some components of the index in some countries it drops into the low 40s, indicating a profound lack of awareness of many of the basic precepts of Green IT.
The other side of that coin, of course, is that there is substantial room for improvement. The findings show that Green IT practices and technologies in most organizations are often quite rudimentary. It is possible to improve them substantially with comparatively little effort.
There are many different components to Green IT. This report examines each component, indicating the strengths and weaknesses of each. There is great variability between components (see Key Finding 4), indicating a lack of coherence or coordination in most organizations’ Green IT strategy.
Key Finding 2: The United Kingdom does best, India worst
The best performing country of the four surveyed is the United Kingdom, with on overall Green IT Index of 61.0 (see next section for an explanation of the indexing methodology). The United Kingdom has the most stringent carbon reduction and carbon reporting regimen of any of the countries, and awareness of Green IT is higher than it is in the other countries. Despite this, the Government sector does relatively poorly in the UK.
The USA comes second, a function of the relative sophistication of IT usage in that country. Lowest are Australia (let down by its poor metrics) and India (where end user Green IT is not widely implemented.).
Key Finding 3: IT/Comms/Media is the best performing industry sector, Wholesale/Retail/Logistics the worst
The chart shows the relative performance of each industry sector, and compares them to the overall Green IT Index across all industries in all countries. The best performing industry sector is IT/Comms/Media and the worst Wholesale/Retail/Logistics. There are significant differences by industry sector.
The relativities between industry sectors remain remarkably consistent across different countries – the same industries tend to do better or worse in all countries. An exception is Government, which is above average in Australia but below average in all other countries. This indicates that Green IT performance is at least as much a function of industry sector as it is of country – a bank in the USA, for example, is more likely to be similar to a bank in India than it is to a manufacturing company in the USA.
Key Finding 4: Operational Green IT does best, Metrics by far the worst
The chart shows the overall Green IT Index and its five constituent components. The two operational components do best: End User (61.0) and Enterprise (60.1). These are the components under the control of the IT department, where the techniques and technologies of Green IT are best known and most noticeable and most advanced.
By far the worst component is Metrics – few organizations are good at measuring the effectiveness of Green IT, and of monitoring improvements in it. In Australia, for example, more than two thirds of organizations do not know IT’s power consumption. The situation is little better in other countries.
Enablement – the use of IT to improve performance and reduce the carbon footprint outside of the IT function – also fares poorly. This is particularly disappointing, given the immense benefits IT can bring to this important area. The low rating is an indication of the inward focus of many Green IT initiatives – most organizations need to work harder on harnessing IT for wider sustainability activities.
MEASURING AND COMPARING
GREEN IT
What is Green IT? Why is it important to sustainability? The answers, while not widely known or appreciated, are not hard to find. There are two aspects to Green IT – the energy consumption and carbon footprint of the IT function, and the use of IT to reduce the energy consumption and carbon footprint of the whole organization, and of the planet.
IT is a significant user of electricity, and is responsible for more than 2% of the world’s carbon footprint – on a par with the airline industry. More importantly, it is responsible for 5-10% of total electricity consumption. In some organizations that rely heavily on IT, such as banks and in many other white-collar industries, IT is often responsible for well over half of all electricity consumption.
That means that reducing or mitigating IT’s power consumption can have a direct and positive influence the organization’s bottom line. Consider the cost of data center power. Power consumption is soaring as new server technologies pack more and more processors, which consume more and more power, into less and less space. Technologies like server virtualization are slowing the growth rate , but rarely are they actually reducing power consumption. And at the same time the cost of that power continues to rise. Furthermore, reporting requirements are becoming increasingly stringent and there is an increased awareness across business and society of the unsustainability of many current consumption patterns.
In the 1990s IT consultancy Gartner introduced the concept of Total Cost of Ownership (TCO) for IT. TCO, as its name suggests, is based on the full cost of equipment over its entire life, not just the purchase price. It takes into account running costs, maintenance, upgrades, etc. For PCs, Gartner has computed that the TCO over the life of a PC could exceed the original purchase price by a factor of three or more.
Until recently many TCO computations have not taken into account the costs of the power to run the IT equipment. That is because power costs have been comparatively low, and because IT departments and users are rarely billed separately for the electricity they consume and have no visibility of it. However, TCO-based calculations are now more important as we consider the costs associated with equipment in terms of the carbon it generates. These changing TCO calculations incorporate electricity costs that can be more easily be measured and budgeted as metering capabilities improve.
Power consumption, in the data center and elsewhere, will become an increasingly significant component of the TCO of enterprise IT in the next few years. This rise in both power bills and power usage means that the power consumption of the IT process is becoming much more noticeable. Even if organizations are unable to directly measure their IT power consumption, they are often aware that it is too high and should be lowered if possible. And even where it cannot be easily measured, it can usually be calculated with a fair degree of accuracy.
IT as a Low Carbon Enabler
There are many well-documented ways of reducing IT’s power consumption, such as server and storage virtualization and consolidation, PC power management, thin clients, etc. The disciplines, technologies and methodologies are reasonably well known, but not so widely discussed is IT’s enabling effect – its ability to reduce an organization’s carbon footprint by facilitating more efficient and less carbon-intensive work practices – teleconferencing instead of flying or commuting, improved supply chain management, the use of IT systems to replace carbon-intensive applications, IT-enabled energy reduction systems, smart metering, and the like.
This aspect of IT as a low-carbon enabler is an important component of Green IT. It is not enough simply to reduce IT’s carbon footprint – to make a real difference, IT must be harnessed to greater purposes. There are various estimates of the proportion of the world’s carbon footprint caused by IT, ranging between 1.5% and 5%. A figure of 2% is often used, and some people talk of “the other 98%” – i.e. the large majority of the world’s carbon emissions NOT caused by IT.
It is in addressing this area that IT has the greatest potential for benefit. While ever Green IT focuses solely on reducing the energy consumption of the IT function, it will be a marginal activity.
The Green IT Framework
Green IT means different things to different people. There are too many definitions, and not enough definition. This lack of clarity has made it difficult to measure the effectiveness or the extent of an organization’s implementation of Green IT. As the old saying goes, “you can’t manage what you can’t measure”. And you can’t measure what you can’t define.
Connection Research uses a Green IT Framework as a way of defining Green IT and understanding its many components. This Framework was developed in conjunction with RMIT University in Melbourne. It defines four general areas, or “pillars”, of Green IT: Lifecycle, End User, Enterprise, and Enablement. It then breaks each of these down further. Lifecycle, for example, comprise the three components of Procurement, Recycle and Reuse, and Disposal. Across these four pillars are five “actions”: Attitude, Policy, Practice, Technology and Metrics.
Once Green IT is broken into its constituent components, as the Framework does, it becomes possible to measure each component. This is done using the Capability Maturity Model (CMM), a standardized way of quantifying the maturity of a business process. The concept of the CMM is often used in the IT industry to describe the level of implementation of various systems. First developed by Watts Humphrey at Carnegie Mellon University, a CMM defines five levels of maturity in the use of any system or technology.
The Capability Maturity Model
The survey asked questions about every aspect of Green IT, as defined by the Framework, and quantified the responses according to the Capability Maturity Model. Applying the five-level CMM across each of the five aspects of Green ICT provides a useful methodology for determining the maturity of an organisation’s Green ICT strategy. Connection Research uses a common adaptation of the CMM which adds an extra level – zero – to indicate no activity at all.
Each question in the survey was constructed to rate the response on a CMM scale from 0 to 5. All relevant questions in each of the four pillars were then aggregated and weighted to deliver a score (out of 100) for that pillar. A similar process was followed for all the metrics questions, with metrics then being treated, for the purposes of analysis, as a fifth pillar. This methodology delivers five index components, which were then combined to determine the overall Green IT Index.
WHO IS RESPONSIBLE
FOR GREEN IT?
Green IT needs a champion. There needs to be someone in the organization responsible for Green IT technologies and policies to achieve truly sustainable outcomes. Despite this, in none of the countries surveyed have more than half of respondents appointed a specific leader to the Green IT role. In the USA and the UK, the figure is almost half (45.0% and 44.1% respectively), while in Australia it is a little lower 37.8%) and in India it is less than one third (31.7%).
Most often that person is the CIO or someone else in the IT department. Only in Australia is someone outside of IT often responsible for Green IT, and even there it is in only 13.1% of cases. Non-IT oversight of Green IT is important, because it provides a broader perspective and is more likely to consider IT’s important role as a low carbon enabler.
Green IT needs coordination, because so many different areas of the organization are involved. In organizations lacking an individual with responsibility for Green IT, it is simply not possible to achieve the necessary level of cooperation between these disparate groups.
Has your organization appointed someone to be specifically responsible for Green IT initiatives?
MEASURING THE POWER
CONSUMPTION OF IT
In most countries surveyed, IT’s power bill is only rarely included in the IT department’s operational budget. Even in the USA, the country with the highest IT power consumption visibility, only around half of the respondents even know how much power IT is consuming. More than two thirds of Australian respondents have no idea how much power their IT function consumes.
In all countries nearly half have attempted to measure or calculate IT’s power consumption, usually with a measure such us PUE (Power Usage Effectiveness) or its close relative DCiE (Data Center Infrastructure Efficiency). Those who have used “other measures” usually perform rough calculations based on the power bill.
Given that “you can’t manage what you can’t measure”, this indicates that many organizations still have a long way to go to even begin to seriously address the issue of Green IT. Too many organizations have not started to think about the issues involved or, if they have, have not done much about it.
IT’s Power Bill
Measured or Calculated IT’s Power Consumption
GREEN IT INDICES
BY COUNTRY AND INDEX COMPONENT
The survey was conducted across four countries: the USA, the United Kingdom, Australia, and India (see “Methodology”). Note that the Indian component had a smaller respondent base than the other countries, and surveyed only non-government organizations in the Mumbai area.
The country with the highest Green IT Index is the United Kingdom (61.0) and the lowest is India (52.0). The charts below show the overall Index for each country, and the five index components for each country. The United Kingdom does well because it rates highest rating in four of the five indices: Lifecycle (63.3 – tied with the USA), End User (68.2), Enterprise (62.6) and Enablement (60.6). The USA leads in Lifecycle (63.3 – tied with the UK) and Metrics (51.8), and is second overall (58.6).
Australia is let down by its low ratings in Enablement (51.5) and a very poor showing in Metrics (40.6). India does worst in Lifecycle (53.8) and is a distant last in End User (50.3).
The results indicate different results in the four different countries surveyed, but the spread is in most cases comparatively small. Each has strengths and weaknesses, but as the spider chart clearly shows, their overall Green IT performance is broadly similar. This indicates there is substantial room for improvement in all areas. The next few pages examine the individual index components by country.
Overall Country Comparisons
Lifecycle
The USA and the United Kingdom are equal in the Lifecycle Index, with Australia third and India last. The USA is ahead of the UK in green disposal practices, and the UK is ahead of the US in green procurement practices. Australia and India do not fare well in either area, with India performing particularly poorly in green IT procurement.
End User
The United Kingdom is the clear leader in the End User Index. It is home to the world’s leading PC power management vendor (1E), and end user Green IT has a high profile in that country. The USA does a little better than Australia, and India’s rating is very low, indicating a low degree of sophistication in end user computing generally, and in Green IT in particular.
Enterprise
There is very little variation in the Enterprise Index by country, reflecting the reality that the issues facing data centers are much the same the world over. In the last 12 months in particular, there has been a lot of publicity and increased awareness of data center energy efficiency metrics such as PUE (Power Usage Effectiveness). The United Kingdom does a little better than the other three countries, but not significantly so.
Enablement
The United Kingdom does best in the important Enablement Index – the usage of IT to reduce energy consumption and the carbon footprint outside of the IT function. It has the most advanced carbon reduction legislation of any of the countries surveyed – its CRC (Carbon Reduction Commitment) is a world leader. The USA comes second, with Australia and India trailing significantly.
Metrics
In each country, the Metrics Index is the lowest of any of the Green IT indices measured. No country does well, though Australia does particularly poorly (this is the country where more than two thirds of IT departments don’t know their power bill). The Australian Metrics Index is the lowest for any country in any component of the overall Green IT Index. The USA does best, because of the relatively advanced state of data center metrics in that country, but it is still a disappointing result.
The comparisons by country are quite revealing. The End User and Enterprise indices are highest overall, indicating that IT departments are starting to understand Green IT from an operational viewpoint. But the two areas with the lowest indices are arguably the most important. Metrics is essential to effective Green IT, and IT’s important role in low carbon Enablement is too often overlooked by IT departments and professionals who concentrate only on the internal IT function.
The following pages examine the differences between industry sectors across the four countries surveyed.
GREEN IT INDICES
BY INDUSTRY
All responses to the survey were cross-tabulated by the industry sector of the respondent organization, allowing for comparison between industries, and between the same industries in each of the countries surveyed. The table below shows the responses by industry and by country for four major industry sectors: Manufacturing, IT/Comms/Media, Government, and Finance/Business Services, and the following pages shows detailed comparisons.
There are significant differences between industry sectors. In most cases these differences are similar in each country – an organization’s Green IT maturity is as much a function of its industry sector than its country. A bank in the USA, for example, is more likely to be similar to a bank in Australia than it is to a manufacturing company in the USA.
Industry Comparisons by Country (Major Industries)
Manufacturing
The chart above shows all five index components for Manufacturing, and Manufacturing’s overall Green IT Index for each country. The chart below shows Manufacturing’s overall Green IT Index for each country compared to the overall (all industries) Green IT Index for each country.
Manufacturing’s overall Green IT Index (58.1) is slightly higher than the overall Green IT Index for all industries across all countries (56.4). It does much better than average in the USA and India, and is marginally higher in the United Kingdom. In Australia it is very poor (47.6), with all Australian index components are substantially below the Manufacturing average in every component of the index except End User, and even there it is still the lowest.
Comms/Media
The chart above shows all five index components for IT/Comms/Media, and IT/Comms/Media’s overall Green IT Index for each country. The chart below shows IT/Comms/Media’s overall Green IT Index for each country compared to the overall (all industries) Green IT Index for each country.
IT/Comms/Media’s overall Green IT Index (62.6) is the highest of any industry, and is significantly higher than the overall Green IT Index for all industries across all countries (56.4). It does better than average in all countries, though not by a large margin in Australia. The results indicate the higher level of IT sophistication of organizations in this industry sector, which is reflected in the greater maturity of their Green IT.
Government
The chart above shows all five index components for Government, and Government’s overall Green IT Index for each country. The chart below shows Government’s overall Green IT Index for each country compared to the overall (all industries) Green IT Index for each country. Note that India is excluded – the survey did not include any India government organizations.
Government’s overall Green IT Index (54.2) is slightly lower than the overall Green IT Index for all industries across all countries (56.4). It does better than average only in Australia, where it is highest overall and much higher than the average across all Australian industry sectors. It is substantially below the average for all industries in the United Kingdom, where various Green IT initiatives in Government have been confused and piecemeal. The result in the USA is also disappointing – Government has an opportunity to set an example with its Green IT.
Finance / Business Services
The chart above shows all five index components for Finance/Business Services, and Finance/Business Services’ overall Green IT Index for each country. The chart below shows Finance/Business Services’ overall Green IT Index for each country compared to the overall (all industries) Green IT Index for each country.
Finance/Business Services’ overall Green IT Index (57.3) is only marginally higher than the overall Green IT Index for all industries across all countries (56.4). It is very close to the average in all countries, though a little higher in the USA and the United Kingdom. The data indicates that the Finance/Business Services sector is no better or worse than other sectors, but this is disappointing overall given the key role played by IT in these organizations.
CONCLUSION
A lot of people are talking about Green IT, and a lot of people believe it is necessary, but these words are rarely translated into significant action. The survey results clearly show that, for every industry in every country, and for every aspect of Green IT, the average level of maturity is comparatively low. There is much room for improvement.
This report attempts to define Green IT by examining its separate components, and to quantify its implementation by applying metrics to performance in each of those components. This methodology illustrates the variable and patchy nature of Green IT implementation – an organization, or industry sector, or country may do well in one area but poorly in another.
This highlights one of the key issues in Green IT – responsibility. Green IT is such a large topic that it extends far beyond the data center or the IT department. It also affects, and is the responsibility of, end users and lines of business within the organization, the procurement function, and middle and senior management.
Sustainability, in all its aspects, is a key business driver in the 21st century. There is an increased realization across society that business practices and individual behavior needs to change. IT has a major role to play. As a major contributor to global carbon emissions its needs to get its own house in order, but more importantly the IT function needs to be more significantly involved in enabling the transition to a true low carbon economy.
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ABOUTCONNECTIONRESEARCH
Connection Research is a market research and consultancy company specialising in the analysis of sustainability issues. Services are provided in Consumer and Community Sustainability, Green IT, Building Industry and Trades and Carbon and Compliance. Connection Research undertakes primary research (surveys of users, trades people, suppliers, practitioners), conducts market modeling analyses (combining our primary data with other sources) and consultancy in these fields.
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