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Realizing the Environmental and Financial Value of Green IT: 3 Strategies to Generate Genuine Results

by Rebecca Newell | SAPinsider

October 1, 2010

Going green is not only beneficial to the environment, but also to a company’s coffers. And one facet of green IT that can bring quick cost savings is green data and document management. In this article, you’ll learn how sustainable IT practices can add value to your organization and go through three strategies that focus on making document and data management processes greener, either through automation or by digitalizing part of the process.
 

At its core, the drive to make IT “greener” reflects companies’ need to reduce costs. But there’s much more to it than that:

  • Around the world, governmental bodies are proposing and enacting new energy regulations, many of which restrict CO2 emissions for businesses. These regulations, which may require companies to buy or trade emissions permits and pay fines for exceeding emissions limits, will inhibit business growth for any company that fails to get its energy dependence under control.
  • At the same time, companies face ever-growing pressure from nongovernmental organizations, investors, and consumers to run a sustainable business — or else put their brand at risk.

Yet, in executives’ minds, “green IT” — or proactively managing IT resource consumption across the enterprise — simply comes down to saving money.

Accordingly, companies must look at the financial value of green IT: Not only does it help companies reduce their ongoing operating expenses, it can also increase capital efficiency by optimizing asset use, improving system availability, and reducing physical space requirements across the business.

What’s more, research shows that, more often than not, the money companies save through green IT initiatives will stay within IT. This budget can then be invested in more innovative and strategic projects that can optimally position an IT organization going forward. But how should you start your green IT efforts?

Promoting Green IT Through Better Document and Data Management

Many companies begin their green IT projects by focusing on making their data and document management processes more sustainable. Why? Consider the following:

By optimizing document processing and management, companies can eliminate many direct and indirect costs. For example, eliminating single-sided printing alone can dramatically cut carbon and energy costs (see Figure 1). Printing important information directly on a customer’s bill can also cut paper volume and its associated production, handling, and delivery costs, while increasing efficiency and reducing resource demand.

Figure 1 Consider these key facts about how offices contribute to carbon emissions — consider, too, just how much this amount of paper might cost your company

Minimizing storage requirements and infrastructures (like the ones that support document storage processes, for instance) helps companies overcome rising equipment and energy costs (see Figure 2).

 

 Monetary benefits   

 Value source

 Baseline

 Improvement%

 Benefit

 Reduce system cost by decommissioning legacy systems (1)  $750,000  100%  $0.75M 
 Reduce document printing and copying costs (2)  $1,625,000  50% - 80%  $0.8M - $1.3M
 Reduce paper filing and storage costs (3)  $270,000  50% - 80%  $0.1M - $0.2M
 Reduce data storage costs (4)  6,000 GB  60% - 70%  $0.6M - $0.7M
 Total annual impact      $2.25M - $2.95M

 Environmental benefits   

 Carbon Source

 Bas eline

 Improvement%

 Benefit

 Legacy servers: electricity consumption, data center power, cooling (5)  170,160 lbs CO2    100%  170,160 lbs CO2
 Document printing and copying: paper (6)  390,000 lbs CO2  50%  195,000 lbs CO2
 Paper filing and storage: office space (7)  41,850 lbs CO2  50%  20,925 lbs CO2
 Data storage: data center power, cooling (8)  10,932 lbs CO2  64%  7,024 lbs CO2
 Total Annual Impact      393,109 lbs CO2, 390 trees
*Assumptions for value sources and carbon sources   
Figure 2 The cost savings and environmental benefits associated with greener IT practices

Even in this electronic age, companies still spend lots of money on office space — some of which is occupied by document-filled file cabinets — and its associated lighting, heating, and cooling costs. Improving content management processes, including content storage, can help lower these costs (again, see Figure 2).

These three strategies focus on making document and data management processes greener, either through automation or by digitalizing part of the process. To help, companies can look to SAP’s solution extensions, several of which are designed to help companies support all three of these strategies (see sidebar).

For example, SAP Interactive Forms software by Adobe helps companies reduce paper consumption while also increasing data accuracy. Both internal and external parties can readily engage in automated business processes by electronically completing forms, such as purchase requisitions, expense reimbursement requests, and online recruiting documents. The forms software builds a direct bridge between the transactional data stored within enterprise applications and the document-based information and processes that exist outside of those applications.

The SAP Document Presentment application by StreamServe archives the essential data associated with a document and then, when needed, reconstructs the full document on the fly. This reduces paper consumption and the amount of storage needed, requiring fewer resources and reducing energy costs. SAP Document Presentment also cuts document processing costs, enabling companies to automatically create and dynamically present adjustable documents to customers, partners, suppliers, and employees in the formats and through the delivery channels they desire.                           

SAP Document Presentment uses a master template to individually assemble documents, such as customer bills. Even at very high volumes, each bill can carry personally relevant offers or suggestions. So, for example, marketing campaigns to influence behavior — perhaps to encourage less air-conditioning use or offer water conservation suggestions — can be personalized based on each customer’s usage history.

With the SAP Extended Enterprise Content Management (SAP Extended ECM) application by Open Text, versions of documents are controlled, collaboration is streamlined, and content is archived and destroyed. This, in essence, reduces document printing, copying, and storage costs. The solution gives SAP users 360-degree visibility into all content associated with transactions, and it gives non-SAP users access to content associated with an SAP transaction.1

Goodwill Means Good Business

Green IT is in the public mind today more than ever before. Companies that demonstrate genuine cost savings and eco-conscious results enjoy greater customer loyalty, as well as respect among peers, regulatory bodies, and others in their extended community (see sidebar for a list of benefits). Though not easily measured, this goodwill is essential to your business’s sustainability.

Rebecca Newell (rebecca.newell@sap.com) has held executive-level marketing and business management positions for more than 20 years. Rebecca began her career in the world of technology at Intel, continuing on to Novell and 3Com before joining SAP. At SAP, she has developed comprehensive go-to-market strategies to drive success for the solution extension applications portfolio worldwide.

 1 For more on SAP Extended ECM, see Bil Khan’s article, “What’s the Weakest Link in Your Company’s Operations? The Surprising Answer That Will Improve the Reliability of Your Assets and Reduce Maintenance Outages”. [back]

Figure 2 assumptions:

1. Assumes 10 systems retired with average operational cost of $75,000 per system (hardware, software, maintenance, administration, environment, etc.).

2. Assumes 2,500 employees, each printing/copying 50 pages per week @ $0.25 per page. The benefit illustrates reduction in printing cost due to improvement in document management process.

3. Assumes 1,500 square feet of office space @$15/sq.ft. are reduced by eliminating file cabinets due to expanded use of electronic documents in all business processes.

4. Assumes 1,500 GB Tier 1 SAP Database; 4,500 Tier 2; 15% /yr. growth; 40% initial archiving; 10% ongoing archiving; 75% reduction in Tier 2 storage; 80% archive data compression; $173/gb average cost of storage.

5. Assumes average server uses 10,635 kWh/yr electricity (including data center load) and 1.6 lbs/kWh average CO2 emissions for local U.S. power sources.  Sources: Koomey, Jonathan. 2007. Estimating total power consumption by servers in the U.S. and the world. Oakland, CA: Analytics Press. February 15. (http://enterprise.amd.com/us-en/AMD-Business/Technology-Home/Power-Management.aspx); eGRID year 2005 Summary Tables (http://www.epa.gov/cleanenergy/documents/egridzips/eGRID2007V1_1_year05_SummaryTables.pdf)

6. Assumes 2,500 employees, each consuming 50 pages per week; 100 pages per pound; 6.0 lbs CO2 per pound of paper; and 24 trees per ton of paper. Sources: U.S. EPA, 2009. Solid Waste Management and Greenhouse Gases: Waste Reduction Model (http://www.epa.gov/climatechange/wycd/waste/calculators/Warm_home.html); http://www.conservatree.com/learn/EnviroIssues/TreeStats.shtml.

7. Assumes 27.9 lbs CO2 equivalents/sq.ft. of office space for power, lighting, heating, and cooling. Source: 2003 EIA Commercial Building Energy Consumption Survey (CBECS). (http://www.eia.doe.gov/emeu/cbecs/)

8. Assumes .00013 kWh electricity per gigabyte for storage server electrical consumption and data center power, lights, heating, and cooling. Source: Tape and Disk Costs – What It Really Costs to Power the Devices; Analyst: Dianne McAdam; Yankee Group Report #TCG2006046; June 2006. [back]

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