In-house green IT feature: Living the dream

Green IT, in the form of more efficient PCs, printers, building designs, remote working practices, chips, and so forth, can save you money by increasing efficiency and improve the image of your firm, so what’s not to like? Vivienne Rosch looks at whether the reality is living up to the dream, highlighting case studies from Barclays, NAG and Newcastle Building Society amongst others

Is green IT a valid term is it really just so much ‘greenwash’? We have had time now to assess the claims and observe the effects on businesses. And there is a very good argument to be made that green technology, as well as sustainable business practices, are really business optimisation by another name; just good practice. Nothing demonstrates this more clearly than the cost savings they can generate. It is this that is driving the adoption of green IT, not the good PR it provides which is essentially an added bonus.

Financial institutions looking for savings should review their operations asking themselves just how ‘green’ (i.e. efficient) each area is, starting with data centres, still a prime site of energy consumption in the sector. Vast amounts of energy are traditionally required here for cooling, and a lot of energy lost. Forward-looking financial firms are investing in technology that will lessen their load on the environment, making them more efficiently run businesses. This is especially topical since the government’s carbon tax, the CRC Energy Efficiency Scheme (formerly know as the Carbon Reduction Commitment) came into being in April.

Greening the hothouse
A high proportion of the energy consumed in data centres is for cooling. Barclays Global Retail Bank (BGRB) has an extensive and ongoing programme of green initiatives, with a strong emphasis on greening its data centres and branches, plus also on improving the building design of its premises and the efficiency of its IT generally. It is putting innovative cooling technologies in its UK data centres including free air, ice store-linked and enclosed cold aisle cooling. Its Gloucester data centre has already reduced carbon emissions by 10,750 tonnes of CO2 annually. BGRB’s target for its data centres in 2010 is a 10 per cent reduction in both CO2 and energy consumption, ensuring that the majority of data centre equipment is certified as Energy Star/80+ compliant.

“We believe we have a responsibility to put issues such as sustainability at the heart of our business agenda. We’re focused on minimising our direct environmental impacts, and IT has an important role to play in meeting our global targets,” says Gemma Walmsley, associate director, media relations, for Barclays Group Corporate Affairs. “However, all investment decisions are made based on a compelling business case, which includes a review of the benefits, and these projects were all implemented because they made good business sense across a range of measures. They were aligned with our IT and business strategies, enhance our system management capabilities and reduce emissions. In addition, the financials (expenditure and return on investment) stacked up.”

Another area worth looking at for green savings are uninterruptible power supplies (UPSs), essential equipment to bridge temporary troughs in mains electricity supply, which leak on average 10 per cent or more of their electricity. Chloride claims its new generation of UPSs can cut this percentage to two per cent, reducing unnecessary emissions and saving electricity. The vendor’s technical support manager, Rob Tanzer, has already seen customers save £60,000 to £70,000 a year, with RoI in five years, by going down this route.

Changing working practices
Replacing kit is only part of the green story. “A few years ago a lot of the discussion around green IT was about replacing equipment. That doesn’t encompass everything that green IT should be looking at though,” says Stephen Nunn, global green IT lead at the consultants Accenture. “Green IT should include sustainability, raw materials, the way we utilise assets throughout their whole lifecycle, and the implications of all this on your business.”

Accenture’s approach to green IT focuses initially on working practices and if mobile devices, homeworking, or the like could help. “We advanced this view last year when we worked together with the World Economic Forum on working practices, and how IT can actually improve the way that you work, directly impacting your ability to save on your carbon footprint,” explains Nunn. “A classic example is providing a regional sales manager with the tools to become more profitable by becoming mobile, thereby not requiring him to travel to the office unnecessarily to pick up paperwork that can be sent via a mobile device. The same goes for inter-office working. Instead of moving people between offices to attend internal meetings, implement telepresence, increasing productivity and reducing carbon footprints.”

One example of using IT to change working practices that had a huge impact on costs and operational efficiency involves the Spanish Confederation of Savings Banks’ (CECA), who entered into the FST Awards 2010 a project that digitalises all client signatures taken in the 25,000 branches of CECA’s 45 member institutions. CECA’s members make up more than 50 per cent of Spain’s financial sector. The largest is 1,000 times bigger than the smallest. Their IT environments differ vastly. Aiming to digitalise a billion signatures a year, on documents from simple receipts to complex investment contracts, German solutions provider Softpro’s signature pads SignPad eSignio record the biometric signal profiles generated during signing, as well as a signature’s image.

“The project has attracted a lot of attention, mainly because we have demonstrated that it saves money,” says Santiago Uriel Arias, CECA’s vice president for technology. “That was the primary driver of the project.” CECA’s initial conservative calculation of 3 (Euro) cents per document only took account of savings relating to paper, still a substantial saving of 30 million Euros per year. CECA soon realised that underlying savings due to changes in back-office processes, which save resources and processing time, put the real current annual savings figure closer to 300 million Euros, even before the solution is fully implemented. Currently 10 million documents are being digitally signed a month, due to increase to 100 million documents by year end.

Greening offices: Barclays & NAG
The office environment can also benefit from green IT or optimised efficient IT; call it what you will. “You can do an awful lot just by looking at your working patterns, to see how you can drive energy efficiencies and consumption efficiency in terms of the office supplies that you use,” points out Accenture’s Nunn. An example is ensuring PCs go dormant at the end of the working day. National Australia Group (NAG), which consists of the Clydesdale and Yorkshire Banks in the UK, implemented a number of changes to its British office environment last year, introducing a managed print service and a desktop power management solution called Night Watchman, with wakeup tool SMSWakeUp. Barclays (BGRB) is also rolling out NightWatchman and expects just this one change to reduce its CO2 emissions by 6,758 tonnes across its branch and office estate, as well as saving it electricity. NAG also changed its procedures for disposing of desktops, ensuring safe disposal at end-of-life, but including all those suitable in the pool to be re-used in response to new requests; truly a sustainable process here.

NAG reduced its carbon emissions in 2009 by over 14,380 tonnes of CO2 across the group. Previously it had re-housed its UK contingency data centre in a newly commissioned building, a project for which it won the FST Award for data centre excellence last year. NAG sees its green initiatives as part of its strategic aim to be carbon neutral by the end of 2010, and says the drive benefits both the company, in terms of reducing costs, and the wider environment. The savings speak for themselves: £1.2 million on the managed print contract; £0.5 million from re-using desktop equipment; £60,000 from desk top disposal; £86,000 from better management of desktop power consumption, as well as annual power savings from that alone of 814,829 KwH.

Apart from virtualising servers and storage, a further green improvement to the office environment can be thin clients, reckons Accenture’s Nunn. “Instead of having fat client PCs on the desktop, you have a small browser-enabled device that is actually much more efficient, and you move the desktop back into the data centre, where it can be better controlled and managed.” (see FST’s VDI feature for more).

Barclays plans to cut its energy consumption further too, by replacing standard desktops with thin client terminals connected virtually to a remotely located server. BGRB is also virtualising a lot of its servers, 550 in its Gloucester data centre alone, allowing it to make further significant energy savings.

Streamlined printing
Newcastle Building Society (NBS) also saved money, while becoming considerably greener last year, by introducing a managed print service solution in its head office and its 35 branches, to simplify print operations, make them more efficient and reduce wastage. It was shortlisted for this in the FST Awards 2010 environmental initiative of the year. Ikon Office Solutions was awarded a contract to provide a managed print service. This reduced the overall number of devices from over 250 to 170, introducing energy-efficient multi-functional devices (MFDs) wherever suitable, that could print, photocopy, etc. At head office, the number of machines sank from 160 devices to just 85 (37 MFDs, supplemented by 48 laser desktop printers). The new hardware is networked and centrally controlled by NBS’ IT Services department, using software that fully integrates NBS’ printing and photocopying activities into its existing network, audits print, and remotely monitors each device, maximising uptime and routing print to the most cost effective device.

NBS’ support services manager, IT services, Simon Gent, explains the rationale behind the project: “We used to have 70 to 80 different types of toner in stock. Now we only have ten or twelve, and the volume has gone right down. It’s all automated, from our point of view there’s very little input.” Staff had to adjust to the new way of working, releasing print jobs with a card and PIN. This makes all printing secure and necessary, cutting waste. Gent recalls how it was before the change: “At the end of the day there’d be wedges of uncollected paper on top of every printer.” The change has benefitted call centre staff too, who can release and collect all prints on their breaks from manning the phones. The additional capabilities of the MFDs, including a scan to network/email function, has greatly reduced fax traffic.

Gent explains NBS’ motivation: “Being a mutual, we’re a big believer in corporate social responsibility (CSR), and I think there’s a big responsibility throughout the IT industry to look at ways of reducing our carbon footprint, as long as it meets the businesses’ requirements, because at the end of the day we’re here to serve the business.” There have been substantial cost savings, estimated by NBS at over 50 per cent on the cost per page of both colour and black and white prints, attributable to fewer, more energy-efficient devices, less waste, fewer consumables, and channeling the print workflow to the most cost-effective device. IT staff time has also been freed up. Gent: “We estimate it’s probably saved about a quarter of the IT time we used to spend dealing with our printers.”

Gain without pain
All the financial institutions FST talked to for this article made changes based upon sound business sense and are genuinely committed to sustainability targets. There is no conflict. “Prior to the economic crisis,” says Accenture’s Nunn, looking back, “most financial institutions were already beginning to focus on their desktop environments and looking at best practice such as virtualisation and energy efficient data centres. Over the past 18 months, this has not been front of mind. However, over the next three to six months I anticipate attention returning to this area, linked to the current optimisational initiatives, but articulating them in a more sustainable and green way.”

Nunn also advises looking beyond the business itself, to its relationships with suppliers and shareholders. He sees procurement as a powerful tool to
green the business internally and exert influence beyond it. He advocates that financial institutions select suppliers also based on their green credentials - for example, their recycling and re-use policies - and insist they reduce or re-use packaging. The consideration of shareholder value is also increasingly helping to implant green IT. “We’ve surveyed CEOs, and they have the notion of reputational risk, that other companies may not want to do business with you if you’re not forward-thinking and balancing the green or sustainability agenda with other business imperatives.”

Which parts of your business may benefit from becoming more sustainable will depend on the state of their ‘green maturity’. With climate change and sustainability issues increasingly on shareholders, customers and legislators’ agendas (just look at the CRC), there are strong motives for taking on the challenge to go as green as quickly as you reasonably can. And if it saves costs, and optimises your business processes at the same
time, who will disagree? There has never been a better time to green your IT; start living the dream.

CASE STUDY: Helping green markets grow
It’s not green IT as such but I also wanted to highlight another initiative that falls under the same arena – namely, green emissions trading. With the EU’s Emissions Trading Scheme (ETS) and the UK government’s CRC, these ‘cap and trade’ initiatives will be increasingly important and act as a further driver for the adoption of green IT across all aspects of a financial institution’s activities. In order to operate the market in carbon credits though investors need reliable data, confirming who has a permit for what, which is where the Markit Environmental Registry (MER) comes in. Winner of the FST Awards 2010 trophy for best environmental initiative, this project has brought state-of-the art technology together with a financial market approach to the market in voluntary carbon credits. The initially buoyant new market has suffered a downturn recently due to the economic crisis and uncertainly surrounding climate policy post-crunch, especially in the US. Markit’s spokesperson Michael Gormley is confident the emissions trading market will recover and take off in a big way eventually though: “The carbon market is nascent, comparable to high frequency trading in the equity markets five years ago. Not only is it a viable business for those who are in it, it’s now an important part of any company’s longer-term strategy, from a sustainability perspective. MER’s infrastructure will support that growth.”

MER is the largest voluntary carbon registry in the world outside the
Chicago Climate Exchange, providing transparency and online traceability of the carbon credits it lists 24/7. Those wishing to trade in these permits can have the confidence that every credit has been verified by one or more of eight of the ten major voluntary carbon standards. Uniquely among carbon trading registries, MER’s platform allows its account-holders to trade in more than one credit type. Additionally, it delivers operational connections to the financial markets, to trading, clearing and settlement platforms, “Our business model is completely different to that of other registries,” opines Markit’s Jane Lloyd, vice president, MER, “and that’s really with a view to the future of the market. We have links into the financial markets, increasing liquidity, cost effectiveness and ease of transactions. MER is a foundational piece of infrastructure for this market.” This is already borne out by the requests MER has received to provide the infrastructure for other registries.

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