Why Going Green is Helping to Keep Financial Institutions’ IT Organisations Out of the Red

Phil Brooke, Principal Consultant, Financial Services Practice

‘Going green’ is a key component of most financial institutions’ corporate social responsibility policies, but there is increasing recognition that it has the potential to deliver much wider business benefits including bottom line cost savings and investment avoidance.

The financial services sector has been slower than many other industries, such as retail and utilities, in embracing green strategies and policies. However, there are exceptions, including high profile initiatives such as biodegradable credit cards, carbon neutral bank accounts (where the carbon footprint can be offset) and a raft of green investment funds.

The credit crunch, and the recession that has followed, has forced green IT down the agenda of CIOs and CPOs as they grapple with cost cutting, re-aligning capacity and demand, address regulatory change and preparing for the upturn, to name just a few other priorities.  BUT should it drop down the agenda given these priorities?

If there was an initiative that could drive down capital expenditure and operating expenses, particularly in a data centre (potentially by double-digit percentage points), for minimal investment and early return, AND have a positive impact on the wider business, you’d want to hear more. Well, that’s what a green IT strategy can do.

The key lever for green IT is doing more for less – greater efficiency. While cost reduction initiatives can have negative connotations, lead to resistance and a protective mentality from staff, green IT initiatives are more likely to have positive connotations, such as the elimination of waste and striving for greater efficiency. In reality, the approach to these are often very different, the former striving to do the same for less money, while the latter asks more fundamental questions such as, do we need to do this at all? The difference between, ‘can we buy our power cheaper’ and ‘do we need to use as much power’ represents an important and empowering shift in mindset.

Green IT can have a big impact on the bottom line in terms of both;

  • Operating Expenses – reducing electricity bills (one of the biggest ‘run’ costs), water bills, maintenance, and support costs.
  • Capital Expenditure – by the more efficient utilisation of assets, and capital avoidance by increasing Cooling and UPS capacity, and even in delaying Data Centre moves.

It also needs to be remembered that IT has a much wider role to play in an environmentally friendly organisation. It can be an effective enabler, allowing staff to work at home and remotely so reducing the need for large energy-hungry offices and pollution from staff travel, as well as driving business efficiency through automation and in turn reducing staff requirements and the associated environmental impact.

However, green IT initiatives aren’t all about big data centre investment, and reducing PUE (Power Unit Effectiveness) measures. Indeed far from it, many are simple, common sense activities which represent IT best practice. For example, according to the Uptime Institute, 15-30% of all servers in a data centre are typically redundant (running applications no longer needed or no applications at all). Simply identifying these and switching them off provides instant tangible benefits;  it delivers an operating expense reduction through lowering electricity consumption and it results in capital expenditure avoidance by making assets available to meet future increases in demand. So should you need a further incentive for creating a greener IT organisation, then keep in mind that the first steps that you can take can be implemented quickly, at a low cost, and deliver a significant upside.

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